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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR
15(d) OF THESECURITIES EXCHANGE ACT OF 1934

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

[   ]TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:000-28025

GLOBAL ENERGY INC.(Exact Name of Registrant as Specified in its
Charter)

|Nevada                                   | 86-0951473         
|---------------------------------------- | -------------------
|(State or Other Jurisdiction of          | (IRS Employer      
|Incorporation or Organization)           | Identification No.)
|                                         |                    
|415 Madison Avenue, 15th Floor,          | 10017              
|New York, NY                             | (Zip Code)         
|(Address of Principal Executive Offices) |                    

+1 (646) 673-8435(Registrants Telephone
Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the
Act**:** **None**

Securities registered pursuant to Section 12(g) of the Act:
**Common Stock, $0.001 par value**

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

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act: Yes [ 
 ]   No [X]

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company:

Large accelerated filer [ 
 ]      Accelerated filer [  
]      Non-accelerated filer 
 [   ]      Smaller reporting company
[X]

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

The aggregate market value of the common stock held by
non-affiliates of the registrant as of June 29, 2007, the last business day
of the registrants most recently completed second fiscal quarter, was
approximately $42 million (based on the average bid and asked price for the
registrants common stock on June 29, 2007 on the OTC Bulletin Board of
$2.00 per share).

At March 14, 2008, 63,187,764 shares of the registrants common
stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: **None**

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TABLE OF CONTENTS

|              |                                                                                                                     |       
|------------- | ------------------------------------------------------------------------------------------------------------------- | ------
|PART I        | **1**                                                                                                              
|              |                                                                                                                     |       
|Item 1.       | Business                                                                                                            | **1** 
|Item 1A.      | Risk Factors                                                                                                        | **6** 
|Item 1B.      | Unresolved Staff Comments                                                                                           | **12**
|Item 2.       | Properties                                                                                                          | **12**
|Item 3.       | Legal Proceedings                                                                                                   | **13**
|Item 4.       | Submission of Matters to a Vote of Security Holders                                                                 | **13**
|              |                                                                                                                     |       
|PART II       | **13**                                                                                                             
|              |                                                                                                                     |       
|Item 5.       | Market for Registrant's Common Equity, Related Stockholder
      Matters and Issuers Purchases of Equity Securities | **13**
|Item 6.       | Selected Consolidated Financial Data                                                                                | **14**
|Item 7.       | Managements Discussion and Analysis of Financial
      Condition and Results of Operations                         | **14**
|Item 7A.      | Quantitative and Qualitative Disclosures About Market
      Risk                                                    | **19**
|Item 8.       | Financial Statements and Supplementary Data                                                                         | **19**
|Item 9.       | Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure                          | **20**
|Item 9A(T).   | Controls and Procedures                                                                                             | **20**
|Item 9B.      | Other Information                                                                                                   | **20**
|              |                                                                                                                     |       
|PART III      | **21**                                                                                                             
|              |                                                                                                                     |       
|Item 10.      | Directors, Executive Officers and Corporate Governance                                                              | **21**
|Item 11.      | Executive Compensation                                                                                              | **23**
|Item 12.      | Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters                | **25**
|Item 13.      | Certain Relationships and Related Transactions, and
      Director Independence                                     | **26**
|Item 14.      | Principal Accountant Fees and Services                                                                              | **27**
|              |                                                                                                                     |       
|PART IV       | **27**                                                                                                             
|              |                                                                                                                     |       
|Item 15.      | Exhibits and Financial Statements                                                                                   | **27**
|              |                                                                                                                     |       
|SIGNATURES    | **28**                                                                                                             
|EXHIBIT INDEX | **29**                                                                                                             

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PART I

Item 1.Business

Certain statements in this Annual Report on Form 10-K are forward-looking
statements. These statements involve a number of risks, uncertainties and other
factors that could cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by these forward-looking statements. Factors which could
materially affect such forward-looking statements can be found in the section
entitled Risk Factors in Item 1A.of this Annual Report on Form 10-K. Investors
are urged to consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are only made as of the
date hereof and we will undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.

References
in this Annual Report on Form 10-K to Global Energy, the Company, we, us
or our are to Global Energy Inc., a Nevada corporation, and its subsidiaries.

Corporate Overview

Our
company was organized on February 16, 1999, under the laws of the State of
Nevada as Global Smartcards Inc. On April 28, 2003, we changed our name to
Global Energy Inc. Our business address is 415 Madison Avenue, 15th Floor, New
York, New York.Our telephone number is +1 (646) 673-8435. Our registered
agent is Rite, Inc., 1905 South Eastern Ave., Las Vegas, NV 89104.

Effective
July 1, 2005, we sold all of our oil and gas assets for the sum of $50,000. The
sale of these oil and gas assets was completed on July 6, 2005.

Our Current Business

Our
mission is to produce and supply alternative fuels, based on alternative energy
producing technologies, which utilize renewable sources for creating viable
energy sources while contributing to severe environmental conservation issues.

Our
strategy is to operate a growing number of owned industrial scale production
facilities in several international locations and emerge as a leading supplier
of mineral diesel, selling to industrial and governmental customers on every
level of the supply chain.

On
May 2, 2007, we entered into a letter of intent with AlphaKat, pursuant to which
we agreed, subject to certain conditions, to purchase the AlphaKats KDV 500
turbine technology and assist with the marketing and development of the
technology. In connection with the development of the KDV technology and the
construction of the plants, we agreed to: (i) provide financial support for the
project, (ii) create a joint venture company for the marketing and development
of the technology; (iii) purchase three KDV 500 turbines for implementation in
Poland, the United States and Israel; (iv) start a regulatory process, including
filing of permit applications at a cost of Euro €100,000; commence monthly
payments of Euro €10,000 to Dr. Christian Koch, the owner of AlphaKat, after due
diligence on the KDV 500 turbine is completed; and (v) enter into a definitive
agreement for the KDV 500 turbine. We are currently working on receiving permits
in the United States and Israel, while in Poland and Germany we achieved basic
permits from the authorities for the implementation of the KDV 500 turbine. As
of the date of this report, we have not ordered any of the KDV 500 turbines
other than placing an advanced payment for one unit.

In
May, 2007, we established two subsidiaries in Israel: Global Fuel Israel Ltd.,
or Fuel, and Global N.R.G. Pacific Ltd., or Pacific. Fuel will render services
to us, however the nature and the scope of the services is not yet defined.

On
July 9, 2007, we entered into a shareholder agreement to form a joint venture
with Yanai Man Projects Ltd., or Yanai, pursuant to which we hold 50.1% of
Pacific and Yanai holds 49.9% of Pacific. Pacific's purpose is the procurement
of agricultural knowledge and the growth of vegetation for the purpose of
producing crude castor oil to aid in the process of manufacturing bio-diesel
fuel. The first project is to work with an Ethiopian entity to farm castor seeds
for castor oil in Ethiopia.

On
  July 10, 2007, we entered into an agreement with AlphaKat based on the letter
  of intent executed by the parties on May 2, 2007, to produce mineral diesel
  from municipality solid waste using the KDV process, originally developed by
  AlphaKat and its owner Dr. Christian Koch, over a 30 year period. The process
  is applicable to biomass waste and any waste containing organic materials (hydrocarbons),
  including plastic, textile, rubber, leather, wood, paper, animal and agriculture
  waste. The KDV depolymerization technology is an alternative-energy source.
  It provides a patent-protected solution for the simultaneous creation of clean
  energy and the disposal of waste. The process uses a high speed turbine and
  a proprietary catalyst to convert and distillate waste into diesel oil. The
  result is a sulphate free diesel oil that meets the requirements of the EN590
  standard for diesel oil and is intended for use in trucks and heavy equipment,
  as well as by major petroleum companies.

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Pursuant
to the agreement with AlphaKat, we incorporated and operate a company named
AlphaKat-Global Energy GmbH. We and AlphaKat each hold 50% of the shares of
AGEI. The goal of AGEI is to provide worldwide marketing and sales of technology
which converts hydrocarbon waste into diesel oil. AGEI has the exclusive rights
to sell certain technology of Alphakat in the United States and China and has
non-exclusive rights for certain other parts of the world.

On
October 5, 2007, our majority owned subsidiary, Global Energy Ethiopia PLC, or
Global Ethiopia, entered into lease agreements with the Southern Nations
Nationalities People's Regional State, Ethiopia, or SNRS, for a 50 year lease of
20,000 hectares of rural land located in the Gamo Gofa zone in the SNRS for the
purpose of cultivating castor seeds and 15 hectares of land located in the Gamu
Gofa zone, Kucha Woreda, in the SNRS for the purpose of operating an oil
crushing plant through an existing facility on the property.

On
October 20, 2007, we entered into an agreement for consulting services with
Trianon Partners, or Trianon, and as of October 24, 2007, we entered into a
joint development agreement with Trianon. In consideration of the consulting
services to be provided by Trianon, we agreed to pay Trianon a fixed fee of
$250,000 which was to be paid in equal monthly installments of $10,000 once we
decided to commence the construction of the plant, with the balance to be paid
upon mechanical completion of the plant. The agreement for consulting services
was terminated by mutual consent on February 6, 2008. In consideration of the
joint development agreement, we agreed to grant an exclusive license to Trianon,
throughout the States of Texas, New York and New Jersey to be formed with
AlphaKat, to market systems that use a proprietary bio-diesel technology for the
conversion of waste to bio-diesel.

On
February 6, 2008, we entered into a business and royalty agreement with Covanta
Energy Corporation, under which we granted to Covanta certain rights, both
exclusive and non-exclusive, for the use, practice, and improvement of the KDV
technology for the purpose of converting waste materials containing hydrocarbons
into diesel oil in countries including the US, the UK, China and the Republic of
Ireland. We did so in exchange for the retention by us of certain rights to
pursue specified small scale projects using the technology, which Covanta will
have the option to invest in, as well as our retention of the right to invest
10% - 35% of the equity in projects initiated by Covanta. Covanta agreed to pay
us a royalty equal to 10% of the gross revenues derived from the sale of diesel
oil from each project for a period of 20 years from the date the applicable
project achieves commercial operation. Under the agreement, Covanta shall also
be responsible for financing 100% of the costs of erection of a demonstration
plant, which it may disassemble and make available for pick up by us, at no cost
to us, upon Covanta terminating its rights to the technology.

On
the same day, we entered into a license agreement with Covanta under which we
granted it a right to sell systems based on the technology to governmental
organizations subject to certain pre-conditions regarding the purchase of a
minimum number of systems based on the technology. Covanta's rights under both
the license agreement and the business and royalty agreement shall be
non-exclusive until it has (i) issued a purchase order for a demonstration
plant, and (ii) placed purchase orders for five additional systems.
AlphaKat-Global Energy GmbH will receive a 10% commission from the sale of all
systems, part of which shall be payable to American Renewable Diesel, LLC,
subject to the business and development agreement described below.

On
February 6, 2008, we executed a business and development agreement with
Renewable Diesel, LLC, an affiliate of Trianon Partners and of American
Renewable Diesel, LLC, under which both Renewable and our company shall have the
right to identify and develop certain projects to convert feedstock to diesel
using the KDV technology in New York, California and Texas, as well as Florida
and New Jersey under certain conditions. If we identify a project, Renewable
shall be entitled to invest up to 25% of the total required equity. If Renewable
identifies a project, we shall be entitled to invest up to 51% and Covanta will
be entitled to invest up to 24% of the total required equity. In all projects,
Renewable shall manage the projects and shall be entitled to development fees in
the amount of $100,000, up to a total of $2,000,000, for each KDV 500 system
included in the project.

In
connection with the business and development agreement described above,
AlphaKat-Global Energy GmbH executed a license agreement with American Renewable
Diesel, LLC, an affiliate of Trianon Partners and of Renewable, which granted
American certain exclusive rights to market and sell systems based on the
technology in the territory of California, New York and Texas, as well as New
Jersey and Florida, subject to the satisfaction of minimum sales requirements.
The territory may be reduced and/or exclusive rights may become non-exclusive
rights, depending on whether minimum sale requirements are satisfied. American
is to receive a commission on all sales in the territory. Systems sold to
Covanta shall be credited to American, regardless of whether such systems are
for use inside or outside the territory.

In
  March 2008 we entered into a Memorandum of Understand with ShenMu SanJiang Coal
  Chemical Company Ltd. (Shaanxi) located in the Peoples Republic
  of China. Under the terms of the MOU, we and Shaanxi, pending completion of
  due diligence of the KDV technology in Germany, plan to jointly own a new entity.
  We would own 51% of the new entity, unless Sinopec Beijing Governmental Energy
  Company becomes a substantial equity partner, in which case our interest would
  be 26%. The new entity would initially build, own and operate an AlphaKat system
  expected to produce ten thousand (10,000) liters of diesel per hour from tar
  oil. Shaanxi is a producer of blue coal, where significant quantities of tar
  oil are produced as a residual of the production process.

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Shaanxi would provide the new company with tar oil at a discount
  to the published market price for conversion into high quality diesel. The MOU
  provides for the extension and growth capabilities of the system
  after successful conversion of tar oil to diesel. We would be entitled, under
  the terms of the MOU, to royalties from the sale of diesel produced by the AlphaKat
  KDV Technology. Completion of the transaction is subject to due diligence and
  negotiation of final documentation.

Private Placement in 2007

On
July 6, 2007, we entered into a securities purchase agreement with YA Global
Investments, L.P. (formerly Cornell Capital Partners, L.P.). Pursuant to the
agreement, as amended on March 20, 2008, we agreed to sell and issue up to
$4,000,000 of secured debentures convertible into shares of our common stock. As
of the date of this annual report, we have issued $3,500,000 of secured
convertible debentures, warrants to acquire up to 600,000 additional shares of
common stock at a price per share of $1.25. The exercise price and the number of
shares issuable upon exercise of the warrants and the conversion price and the
number of shares issuable upon conversion of the secured convertible debentures
are subject to anti-dilution adjustments and customary adjustments in the event
of distributions, reorganizations or fundamental transactions. Additional funds
will be advanced to us by YS Global under the securities purchase agreement upon
the registration statement, registering the resale of the shares under the
debentures, being declared effective.

The
10% secured convertible debentures, which mature on October 31, 2010, are
convertible by the debenture holder into shares of common stock at a fixed
conversion price of $1.25 per share, as may be adjusted. The debentures are
secured against all of our assets.

Amortizing
payments of the outstanding principal amount of the debentures will commence on
the first business day on or after July 31, 2008, and will continue on the first
business day of each successive calendar month thereafter until the principal
amount has been repaid in full. Assuming the issuance of $4,000,000 of
debentures, we will be required, commencing on the first business day on or
after July 31, 2008, to pay the holder of the debentures the principal amount of
$300,000 every month until the principal amount has been repaid in full. In
addition, payments of accrued interest will commence on the first business day
on or after July 31, 2008, and will continue on the first business day of each
successive quarter. These payments may be made at our option by cash or by the
issuance of our common stock at the lower of (i) $1.25, as may be adjusted, or
(ii) 95% of the lowest volume weighted average trading price per share of our
common stock during the fifteen (15) consecutive trading days immediately
preceding the conversion date, as quoted on the OTCBB.

There
are limitations on the number of shares that can be issued by us in payment of
principal and interest that are tied to the volume of common stock traded on our
principal trading market. If we fail to deliver stock certificates upon the
conversion of these debentures at the specified time and in the specified
manner, we will be required to make substantial payments to the holders of the
debentures.

Holders
of the debentures may require that we redeem any or all of the outstanding
debentures upon the occurrence of any one or more events of default specified in
the debentures.

The
warrants are exercisable at any time until their expiration date. Holders of the
warrants are entitled to exercise their warrants on a cashless basis following
the first anniversary of issuance if the registration statement of which this
prospectus is a part is not in effect at the time of exercise. Holders of
debentures are subject to certain limitations on their rights to convert the
debentures. The principal limitation is that the holder may not convert into a
number of shares that would, together with other shares held by the holder,
exceed 4.99% of the then outstanding shares of our common stock after such
conversion, unless such limitation is waived by the holder upon not less than 65
days prior notice. The exercise of the warrants is subject to a similar
limitation.

If
we fail to deliver stock upon a conversion and YA Global Investments, L.P.
purchases stock to satisfy a sale by YA Global of common stock issuable upon
such conversion that YA Global anticipated receiving from us, we can be liable,
at YA Globals option, for either (i) the total cost of the stock it purchased,
including brokerage costs or other out of pocket expenses, if any, or (ii) to
deliver share certificates representing the common stock and pay the excess of
YA Globals costs for the shares over the product of such number of shares of
common stock times the price per share in the last reported trade of the common
stock on the OTCBB on the conversion date.

Description of the KDV Technology

The
KDV process utilizes proprietary technologies developed by a German company,
Alphakat, and its owner Dr. Christian Koch, a scientist who has spent over 30
years in senior positions at Siemens.

The
KDV process can be applied to municipal solid waste including plastic, rubber,
paper and cardboard waste, all of which can be converted to mineral diesel.

In addition, the technology can be applied to:

- Refinery residuals - such as petcock, tar and paraffin which cannot be
  used today and the disposal of which harms the environment and is very
  expensive to neutralize;

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- Used oil from engines, organic wastes, sewerage sludge and animal manures;
- All types of waste biomass, including such items as the body plant of the
  corn when extracting oil from the seeds, sunflowers and any other crop where
  significant amounts of biomass remain in the field after harvesting the food
  parts; and
- Glycerine  bio-diesel plants produce glycerin, 30% of which can be
  converted to saleable mineral diesel.
- The product is a high-quality diesel fuel suitable for use in any of
  today's engines. It has Cetane of over 60, as compared to normal diesel oil
  (52) and super diesel (56), giving the engine greater power and a quieter
  operation.
- As a mineral, the diesel does not require certification from car and engine
  manufacturers, provided it fulfills European Union standards. The KDV process
  produces a renewable diesel and therefore is eligible for tax benefits in
  certain countries.

Manufacturing

Currently,
we do not own any diesel production facilities. While we are exploring possible
acquisitions of suitable facilities for such purposes, we have not yet entered
into any definitive agreement for a facility.

Acquisition
or construction of plant facilities may take several forms, including the
leasing of plant facilities, joint ventures with third parties, including
manufacturers of ethanol and bio-diesel or consumers of bio-diesel such as
trucking and transportation companies, or direct ownership.

The
acquisition of manufacturing plants will require us to (i) identify suitable
facilities that can be cost-effectively modified for our needs, (ii) conduct due
diligence with respect to such facilities, including investigation of
environmental risks and permitting, (iii) negotiate acceptable purchase or lease
agreements and (iv) finance any such acquisitions and capital improvements. The
construction of new facilities would require us to identify appropriate sites to
locate plants. In either case, production facilities will need to be engineered
and constructed or, in the case of existing plants, appropriate modifications
completed. Also, we would have to establish relationships with engineering
firms, construction companies and other service providers, as well as supplier
relationships to obtain sources of the components of the renewable -fuel.

Plant
development, whether acquired or constructed, will necessitate governmental
permitting and various regulatory approvals (including environmental, zoning and
construction permits), which will likely vary from location to location and may
cause delays and add significant costs. Moreover, given our limited operating
history, relatively untested technology, experience, management and financial
resources, there is no assurance that we will be able successfully to complete
any plant acquisition or construction or that any such plants can be operated
profitably.

Competition

The
market for the manufacture, marketing and sale of bio-diesel, heating and other
alternative fuels is highly competitive. According to the National Biodiesel
Board (NBB), as of January 31, 2007, there were at least 105 companies that are
engaged in the development, manufacture and marketing of bio-diesel fuel, with
current production capacity estimated at 864 million gallons per year. The NBB
further estimates that another 1.7 billion gallons of annual plant capacity are
under development (the preceding data reflect capacity, not actual production
levels or demand). Such competition could be intense, thus driving up the costs
of feedstock, plant construction, attracting and retaining qualified engineers,
chemists and other key employees, as well as other operating expenses. Moreover,
if production capacity in the industry increases faster than demand for
bio-diesel and other alternative fuels, sale prices could be depressed. Falling
oil prices would also negatively affect demand and the competitive position of
bio fuel. We will also compete with petroleum fuels.

Competition
from other alternative fuels will likely increase if prices of energy on the
commodities markets, including oil and bio-diesel, rise as they have in recent
years. Additionally, new companies are constantly entering the market, thus
increasing the competition. This could also have a negative impact on us or our
sublicensees ability to obtain additional capital from investors. Larger
foreign owned and domestic companies which have been engaged in this business
for substantially longer periods of time may have access to greater financial
and other resources. These companies may have greater success in the recruitment
and retention of qualified employees, as well as in conducting their own fuel
manufacturing and marketing operations, which may give them a competitive
advantage. In addition, actual or potential competitors may be strengthened
through the acquisition of additional assets and interests. If we or our
sublicensees are unable to compete effectively or adequately respond to
competitive pressures, this may materially adversely affect our results of
operations and financial condition. On the other hand, if petroleum prices fall,
competition from such fuels will intensify.

Intellectual Property

We do not have any intellectual property.

4

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Governmental Regulations

Our
business will be conducted in various countries, which have varying degrees of
regulation. The following is a discussion of some U.S. regulations which may or
may not apply to our operations.

There
are no readily apparent U.S. Environmental Protection Agency, or EPA, regulatory
fuel certification requirements applicable to using the renewable diesel in a
stationary source, such as industrial applications or home heating fuel, or in
certain marine applications. There may, however, be requirements applicable to
emissions from individual furnaces, boilers, etc. As a practical matter, market
acceptance of the bio-fuel may be limited until we can demonstrate that (i) the
renewable diesel is comparable to conventional fuels, from an energy content and
emissions perspective, as well as handling and storage perspectives, and (ii)
that the renewable diesel is compatible with existing heating systems or power
generation systems and other combustion systems. To date, we have not
demonstrated any of the foregoing in such commercially available systems. In
addition, initial testing done on the renewable-diesel in a laboratory indicated
that the renewable diesel is high quality fuel.

We
have evaluated whether the renewable diesel can be formulated to comply with the
standards of the EPA to be classified as diesel. EPA standards mandate that
the diesel comply with the specifications of the American Society for Testing
and Materials (ASTM) requires that the fuel be comprised of. However, we are
currently evaluating whether the ASTM standard can be broadened to include our
fuel.

In
order to be legally marketable as a fuel for on-road motor applications, the
bio-fuel must be registered with the EPA and comply with the EPAs health
effects regulations. Under these regulations, a company registering a fuel must
either complete a literature review and possibly health effects testing, or
submit an application with a group of other companies manufacturing similar
fuels. The NBB has completed the required health effects testing on behalf of
the bio-diesel industry, and provides the testing data to companies seeking to
register their bio-diesel with the EPA. To fit under the NBB umbrella, and be
considered bio-diesel for marketing purposes, the bio-fuel must meet the ATSM
6751 specifications for bio-diesel described above. European countries use
similar standards. ASTM 6751 compliant bio-diesel is already registered with the
EPA and also meets the clean diesel standards established by the California Air
Resources Board (CARB) and certain other states. As of the date of this report,
the current formulation of the bio-fuel does not comply with ASTM 6751. Because
water is a component used in the manufacture of our bio-fuel, it is unlikely
that we will be able to reformulate our fuel to meet this ASTM standard;
accordingly, we would need to seek EPA approval as described above for our fuel
to be used on on-road motor vehicle applications.

We
are evaluating the regulatory requirements for using our fuel in motor vehicle
applications in our territory outside the United States.

Environmental
permitting of renewable diesel manufacturing facilities varies with the
characteristics of individual plants. Our renewable diesel is manufactured using
a process that is believed to yield little, if any wastes, emissions or
discharges, although there may be some air emissions that could require us to
obtain air emission permits to construct and operate any plants we may build or
acquire.

Being
a mineral, the diesel does not require certification from car and engine
manufacturers, provided it fulfills the EU standards. The KDV process produces a
bio-diesel and therefore is eligible for tax benefits in certain countries.

Employees

As
of December 31, 2007, we had five full time employees. We believe our
relationships with our employees are good.

5

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Item 1A.Risk Factors

Certain
statements in this Annual Report on Form 10-K are forward-looking statements,
these statements involve a number of risks, uncertainties and other factors that
could cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by these forward-looking statements. Factors which could materially
affect such forward-looking statements can be found in the section entitled
Risk Factors in this Item 1A. in this Annual Report on Form 10-K. Investors
are urged to consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are only made as of the
date hereof and we will undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or
circumstances.

References
in this Annual Report on Form 10-K to Global Energy the Company, we, us
or our are to Global Energy Inc., a Nevada corporation, and its
subsidiaries.

Risks Related to Our Business

We are a development stage company with a limited
operating history, which makes us a speculative investment.

We
are a development stage company that seeks to take advantage of the rights to
the KDV technology to manufacture renewable diesel that is intended to be
marketed as a new class of renewable-diesel, bio-mass or fuel additive. There
can be no assurance that the renewable diesel will gain market acceptance,
either from distributors or consumers.

We
have been engaged in organizational activities including developing a strategic
operating plan and entering into contracts. We currently only have five
employees. Other than limited testing activities with respect to our bio-fuel,
we have not conducted any operations. We have not generated any revenues.
Accordingly, we have limited relevant operating history upon which an evaluation
of our performance and prospects can be made. Our prospects must be considered
in light of inherent risks, expenses and difficulties encountered by companies
in the early stages of development, particularly companies in new and evolving
markets. Such risks include, but are not limited to, risks of unforeseen capital
requirements, unforeseen technical problems, failure of market acceptance,
failure to establish business relationships and competitive disadvantages
against larger and more established companies.

We are unlikely to be able to continue as a going concern
in the event we are unable to obtain additional financing.

We
have incurred a net accumulated deficit of $1,837,000 since inception. As of
December 31, 2007, we had $1,470,000 of available cash. We have financed our
operations to date primarily through the sale of debentures, our common stock
and warrants in privately-negotiated transactions with accredited investors. We
are unlikely to be able to continue as a going concern unless we are able to
obtain additional financing. Future capital requirements could vary
significantly and will depend on certain factors, many of which are not within
our control. These include the ongoing development and testing of our
technology, the nature and timing of licensing and sublicensing activities,
plant construction, commencement of sales, hiring qualified management and
employees, responding to competitive pressures, regulatory requirements, and the
availability of financing. The expansion of our business will require us to
commit significant capital resources in amounts substantially in excess of our
current financial resources. Any needed financing may not be available on
acceptable terms. In addition, future equity financings, if any, could be
dilutive to then existing stockholders. In the event we do not raise sufficient
capital to meet our obligations, we are likely to be unable to continue as a
going concern unless we obtain additional financing. If such additional
financing is not available our stockholders may lose their entire investment in
our company.

We may not be able to achieve the objectives set forth in
our new business plan.

The
focus of our activities will be building and operating a series of energy
processing facilities to produce diesel from municipal solid waste, oil
residuals, refinery wastes and biomass. We will work with local partners, which
will include companies with the ability to supply large quantities of the
required waste.

We
will initially set up three to four demo plants in countries where strategic
partners able to supply the required waste have already been identified. These
countries so far include the United States, Israel, Poland and Germany.

We
intend to develop, build and operate a significant number of energy processing
plants, each capable of producing 10,000 liters of mineral diesel oil per hour
and all based on the environmentally friendly KDV technology.

There
can be no assurance that we will be able to execute the above mentioned
objectives. Additionally, we have not commenced the design, engineering,
development or construction of any bio-fuel manufacturing plants.

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Our business depends on proprietary technology that we
may not be able to protect and may infringe on the intellectual property rights
of others.

Our
success will depend, in part, on the viability for commercialization of the KDV
technology and on the strength of the intellectual property rights relating to
the KDV technology. The KDV technology is patented by Dr. Koch and Alphakat only
in Germany, the USA and certain other countries. Patents sometimes are difficult
to defend and others could independently develop substantially equivalent
technology or otherwise gain access to trade secrets relating to the KDV
technology, including through analysis or reverse engineering of the bio-fuel
made with the KDV technology. Accordingly, we may not be able to protect the
rights to our patented technology or we may work in countries where the patent
has not been filed. In addition, any agreements with our employees, consultants,
advisors, sublicensees and strategic partners restricting the disclosure and use
of trade secrets, inventions and confidential information relating to the KDV
technology may not provide meaningful protection in the event of unauthorized
use or disclosure.

Third
parties may assert that the KDV technology, or the products we or our
sub-licensees commercialize using the KDV technology, infringe upon their
proprietary rights. We have yet to complete an infringement analysis and even if
such an analysis were available at the current time, it is virtually impossible
for us to be certain that no infringement exists, particularly in our case as
our products have not yet been fully developed. Furthermore, because we have
licensed the KDV technology from Alphakat and Dr. Koch there are additional
inherent uncertainties about the origin and ownership of the intellectual
property that could contribute to our infringement exposure.

We
could incur substantial costs in defending ourselves in suits brought against us
for alleged infringement of another partys intellectual property rights as well
as in enforcing our rights against others. If we are found to infringe, the
manufacture, sale and use of our or our sub-licensees products could be
enjoined. Any claims against us, with or without merit, would likely be
time-consuming, requiring our management team to dedicate substantial time to
addressing the issues presented. Furthermore, many of the parties bringing
claims may have greater resources than we do.

We may not be able to generate revenues.

We
have not generated any revenues and we do not expect to generate any material
revenues until after we have successfully operated bio-fuel manufacturing plants
and commenced commercial sales. We do not currently anticipate any of this to
occur at least until the third quarter of 2008. Any start-up delays due to
problems with the physical plant, staffing, permitting or other operational
issues would negatively impact us. Any planned manufacturing plants may not
achieve projected capacity. Companies to which we grant sublicenses or work with
in a joint venture may not be able to produce, market and sell enough bio-diesel
to pay us any amounts, or we or they may default on payments and lose rights to
the technology. We may not be able to achieve profitable operations from the
development of the KDV technology and/or the production of bio-fuel.

Unanticipated problems in our engineering and
construction operations may harm our business.

Our
cash flow will depend on our ability and the ability of our joint venture
partners to timely design, construct and complete bio-fuel manufacturing plants.
If engineering and construction operations are disrupted and/or the economic
integrity of these projects is threatened for unexpected reasons (including, but
not limited to, technical difficulties, poor weather conditions, and business
interruptions due to terrorism or otherwise) our business may experience a
substantial setback. As a development stage company, we are particularly
vulnerable to events such as these.

We may lose our rights to the KDV technology.

If
we do not fulfill our obligations set out in our agreement with Alphakat, we may
lose the rights to develop, commercialize and market the KDV technology, leaving
us without any business.

Our ability to produce and distribute commercial
quantities of renewable diesel is unproven, which could have a detrimental
effect on our ability to generate or sustain revenues.

While
  production of bio-fuel from solid waste is a relatively mature technology, the
  technologies being pursued by us for bio-fuel production have never been utilized
  on a commercial basis. The renewable diesel we produce using our KDV technology,
  while intended as a new class of bio-fuel or fuel additive for power generation,
  heavy equipment, marine use and as a heating fuel, is in fact a new bio-fuel
  that may never achieve technical or commercial viability. All of the tests conducted
  to date by us with respect to the KDV technology have been performed in a limited
  scale environment and the same or similar results may not be obtainable at competitive
  costs on a large-scale commercial basis. We have never utilized the KDV technology
  under the conditions or in the volumes that will be required for us to be profitable
  and cannot predict all of the difficulties that may arise. The KDV technology,
  when used, may require further research, development, regulatory approvals,
  environmental permits, design and testing prior to commercialization. Accordingly,
  the KDV technology or the bio-fuel may not perform successfully on a commercial
  basis and they may never generate any revenues or be profitable.

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The strategic relationships upon which we may rely are subject
  to change.

Our
  ability to successfully sublicense our technology to third parties, to develop
  and operate manufacturing plants, and to identify and enter into commercial
  arrangements with customers will depend on developing and maintaining close
  working relationships with industry participants. Our success in this area will
  also depend on our ability to select and evaluate suitable projects, as well
  as to consummate transactions. These realities may impair our ability to grow.

To
develop our business, we will use our management team's (including those of any
future management we retain) business relationships and those of our
sublicensees in order to form strategic relationships. These relationships may
take the form of joint ventures with other private parties or local government
bodies or contractual arrangements with other bio-diesel and alternative fuel
companies. There can be no assurances that we will be able to establish these
strategic relationships, or, if established, that these relationships will be
maintained, particularly if members of our management team leave. In addition,
the dynamics of our relationships with strategic partners may require us to
incur expenses or undertake activities we would not otherwise be inclined to
incur or undertake in order to fulfill our obligations to these partners or
maintain these relationships. If we do not successfully establish or maintain
strategic relationships, our business may be negatively impacted.

Moreover,
reliance upon strategic partners to manufacture and sell bio-fuel using our KDV
technology subjects us to additional risks, including a limited ability to
control the quality of such fuel stemming from the failure of such partners to
perform in accordance with the terms of agreements that they may enter into with
us. Arrangements we enter into with such partners may compete with any bio-fuel
that we may manufacture at our own plants and therefore may limit our organic
growth.

Our business may suffer if we are unable to attract
and/or retain talented personnel.

We
currently have five employees. Our success will depend in large measure on the
abilities, expertise, judgment, discretion, integrity, and good faith of our
management, and on other personnel we may hire. The loss of a key individual by
us or our inability to attract suitably qualified replacements or additional
staff could adversely impact our business. Our success depends on the ability of
our management and employees to interpret market and technical data correctly,
as well as to respond to economic, market, and other conditions and to manage
effectively the production, marketing and sale of bio-fuel fuel using our KDV
technology. Furthermore, no assurance can be given that our key personnel will
continue their employment with us, or that replacement personnel with comparable
skills will be found. If we are unable to attract and retain key personnel, our
business may be adversely affected.

Competition may impair our success.

The
market for the manufacture, marketing and sale of renewable diesel (such as
renewable diesel) and other alternative fuels is believed to be highly
competitive. According to the National Bio-diesel Board (NBB), as of January 31,
2007, there are at least 105 companies that are engaged in the development,
manufacture and marketing of bio-diesel fuel, with current production capacity
estimated at 864 million gallons per year. The NBB further estimates that
another 1.7 billion gallons of annual plant capacity are under development. Such
competition could be intense, thus driving up the costs of feedstock, plant
construction, attracting and retaining qualified engineers, chemists and other
key employees, as well as other operating expenses. Moreover, if production
capacity in the industry increases faster than demand for bio-fuels (including
bio-diesel), sale prices could be depressed. Falling oil prices would also
negatively affect demand for and the competitive position of alternative fuels
such as our bio-fuel. We will also compete with petroleum fuels.

Competition
from alternative fuels will likely increase with the rise of energy prices on
the commodities market, including of oil and bio-diesel, as has been occurring
in recent years. Additionally, new companies are constantly entering the market,
thus increasing the competition. This could also have a negative impact on us or
our sublicensees ability to obtain additional capital from investors. Larger
foreign owned and domestic companies which have been engaged in this business
for substantially longer periods of time may have access to greater financial
and other resources. These companies may have greater success in the recruitment
and retention of qualified employees, as well as in conducting their own fuel
manufacturing and marketing operations, which may give them a competitive
advantage. In addition, actual or potential competitors may be strengthened
through the acquisition of additional assets and interests. If we or our
sublicensees are unable to compete effectively or adequately respond to
competitive pressures, this may materially adversely affect our results of
operation and financial condition.

Our management has identified a material weakness in
internal control over financial reporting and we can provide no assurance that
additional material weaknesses will not be identified in the future. The
Companys failure to implement and maintain effective internal control over
financial reporting could result in material misstatements in the financial
statements.

Our management has identified a material weakness in our internal control over
  financial reporting as of December 31, 2007. See Item 9A(T). Controls
  and Procedures. We can provide no assurance that additional material weaknesses
  in our internal control over financial reporting will not be identified in the
  future. Any failure to maintain required controls, or any difficulties that
  may be encountered in the implementation of new or improved controls, could
  result in additional material weaknesses, cause the Company to fail to meet
  its periodic reporting obligations or result in material misstatements in the
  Companys financial statements. The existence of a material weakness could
  result in errors in the Companys financial statements that could result
  in a restatement of financial statements.

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We may not effectively manage future growth.

If
we achieve rapid growth, it will place a significant strain on our financial,
managerial, and operational resources. To achieve and manage growth effectively,
we must continue to improve and expand our operational and financial management
capabilities. Moreover, we will need to increase staffing and effectively train,
motivate and manage our employees. Failure to manage growth effectively could
harm our business, financial condition or results of operations.

We or our sublicensees may not be able to build or
acquire and operate manufacturing plants on an economically viable basis.

Any
manufacturing plants that we or our sublicensees build or acquire may not be
capable of production levels that are sufficient for commercial viability. On a
long-term basis, we or our sublicensees will be dependent upon the ability to
acquire solid waste, oil waste and agricultural products at reasonable prices,
and to develop viable outlets for the sale of renewable diesel production. Our
future will depend on our or our sublicensees ability to engineer, construct
and operate future manufacturing plants, and successfully sell the fuel produced
from these manufacturing plants.

Completion
of manufacturing plants does not assure a profit on the investment or recovery
of construction costs and/or operating costs. Also, environmental damage may
greatly increase the cost of operations, and various other field operating
conditions may adversely affect the construction of bio-fuel manufacturing
plants. These conditions include, but are not limited to, delays in obtaining
governmental approvals or consents, shut-downs of operations and plant
infrastructure resulting from extreme weather conditions, problems in storage,
distribution of fuel, attracting and retaining qualified employees, labor
relations and adverse geological and mechanical conditions. Therefore, these
uncertainties are likely to have some adverse effect on our revenue and cash
flow levels to varying degrees, and may result in the impairment of our
business.

Prices and markets for renewable diesel (such as
renewable diesel fuel) are unpredictable and tend to fluctuate
significantly.

The
price of renewable diesel is determined based on world demand, supply and other
factors that impact renewable diesel (including renewable diesel) as well as
conventional and other alternative fuels, all of which are beyond our control.
World prices for bio-diesel fuel have fluctuated widely in recent years and we
expect that prices will continue to fluctuate. Price fluctuations will have a
significant impact upon our revenue, results of operations and on our general
financial condition. Price fluctuations for renewable diesel and other fuel may
also impact the investment market, and our ability to raise investor capital.
Future decreases in the price of bio-diesel and competing fuels may have a
material adverse effect on our financial condition and future results of
operations. In addition, in the United States, demand for bio-fuels is affected
by certain federal and state tax benefits. The applicability, reduction or
repeal of such tax benefits could adversely affect our business. Moreover, the
bio-fuel may not be eligible for tax incentives provided to the bio-diesel
industry.

Engineering, constructing and operating the bio-fuel
manufacturing plants is risky.

Engineering,
constructing and operating the renewable diesel manufacturing plants involve a
high degree of risk particularly when new technology such as ours is involved.
These risks are more acute in the earlier stages of development. Our
expenditures in developing manufacturing plants may not result in commercially
viable projects. We cannot project the costs of constructing and operating
manufacturing plants due to the inherent uncertainties of future feedstock
prices and the future pricing of oil, diesel fuel, bio-diesel fuel, heating
fuel, fuel additives and other alternative fuels, the costs associated with
encountering unknown obstacles, and changes in market demands. If construction
costs exceed our or our sublicensees estimates or if our or our sublicensees
efforts do not produce results which meet our expectations, our business may not
be commercially successful, which would have a material adverse effect on our
results of operations and financial condition.

Our technology may become ineffective or obsolete.

To
be competitive in the bio-fuel industry, we may be required to continually
enhance and update our KDV technology. The costs of doing so may be substantial,
and may be higher than the costs that we anticipate for technology maintenance
and development. If we are unable to maintain the efficacy of our KDV
technology, our ability to manage our business and to compete may be negatively
impaired. The impact of technical shortcomings could have a material adverse
effect on our prospects, business, financial condition, and results of
operations.

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As of December 31, 2007 we had approximately $3,000,000
in principal amount of debt, which, if we cannot repay when due, will permit the
holders of this debt to seek renegotiation or bankruptcy alternatives, the
result of which could terminate implementation of our business plan.

As
of December 31, 2007 we have convertible into shares in the principal amount of
$3,000,000 plus approximately $58,000 in interest, we have pledged all of our
assets as security to YA Global Investments, L.P., the holder thereof. From time
to time, we may also have trade debt and equipment financing outstanding. If we
are unable to repay any of our obligations when due, our creditors could force
our company into bankruptcy or force renegotiation of the terms of our
outstanding debt on terms that may be substantially less favorable to us. In
either event, our ability to pursue our business plan will be significantly
impaired and the equity of our company may become worthless.

We may not be able to satisfy our debt obligations due to
fluctuations in the market price of our common stock.

We
may satisfy our convertible debt obligations to the selling stockholder through
the issuance of common stock or cash payments. If the price of our common stock
drops considerably, and we cannot satisfy the repayment obligations through the
issuance of common stock due to contractual limitations on issuance of
securities included in the debentures, we currently do not have sufficient cash
to satisfy these debt obligations. Defaulting under our companys debt
obligations may result in the lender exercising its rights under the terms of
its security interest to force our company into bankruptcy or otherwise
renegotiate the terms of our outstanding debt on terms that may be substantially
less favorable to us. If these events occur, our ability to pursue our business
plan will be significantly impaired and the equity of our company may become
worthless.

Our business may be adversely affected by regulatory and
environmental risks.

Our
business is subject to environmental risks and hazards and we are subject to
environmental regulation implemented and/or imposed by a variety of
international conventions as well as federal, state, provincial, and municipal
laws and regulations. Environmental laws restrict and prohibit spills,
discharges and emissions of various substances produced in association with our
bio-fuel manufacturing operations. Environmental laws also require that
manufacturing plants be operated, maintained and closed in such a way that
satisfies applicable regulatory authorities.

Compliance
with environmental laws can require significant expenditures and a violation may
result in the imposition of fines and penalties, some of which may be material.
Environmental legislation is evolving in a manner we expect may result in
stricter standards and enforcement, larger fines and liability, and potentially
increased capital expenditures and operating costs. Compliance with
environmental laws may cause us to limit our production, significantly increase
the costs of our operations and activities, or otherwise adversely affect our
financial condition, results of operations, and/or prospects.

Insurance may be inadequate to cover our liabilities.

Our
manufacturing plant operations, if any, may cause us to have liability for
pollution, property damage, personal injury, or other hazards. Even if we obtain
insurance to address such risks, insurance policies have limitations on
liability that may not be sufficient to cover the full extent of our
liabilities. Also some of our risks may not be insurable. If we suffer a
significant event or occurrence that is not fully covered by insurance, or if
the insurer of such event is not solvent, this could result in a material
adverse effect on our results of operations or financial condition.

Our business is subject to local legal, political, and
economic factors.

We
expect to operate our business in Europe, Israel, North America, China and
Africa. Not all of these areas have stable legal, political and economic
conditions. For the areas that do have stable legal, political and economic
conditions, there is the risk that these conditions will change. These risks
include, but are not limited to, terrorism, military repression, interference
with private contract rights, currency fluctuations, inflation, exchange
controls and other laws or policies affecting environmental issues (including
land use and water use), workplace safety, foreign investment, foreign trade,
investment or taxation, restrictions imposed on the alternative fuel industry
(such as restrictions on production) and price and export controls. Any changes
in alternative fuel, financial incentives, investment regulations, policies or a
shift in political attitudes within our operating area are beyond our control
and may adversely affect our business and future financial results.

Because our officers and directors are located in
non-U.S. jurisdictions, our shareholders may have no effective recourse against
the management for misconduct and may not be able to enforce judgment and civil
liabilities against our officers, directors, experts and agents.

All
  of our directors and officers are nationals and/or residents of countries other
  than the United States, and all or a substantial portion of their assets are
  located outside the United States. As a result, it may be difficult for investors
  to enforce within the United States any judgments obtained against our officers
  or directors, including judgments predicated upon the civil liability provisions
  of the securities laws of the United States or any U.S. state.

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Risks Related to our Common Stock

Shares of our common stock may continue to be subject to
  price fluctuations and illiquidity because our shares may continue to be thinly
  traded.

Although a trading market for our common stock exists, the trading volume has
  historically been insignificant, and an active trading market for our common
  stock may never develop. There is currently no analyst coverage of our business,
  and the number of shares in our public float is limited. As a result
  of the thin trading market for our common stock, and the lack of analyst coverage,
  the market price for our shares may continue to fluctuate significantly, and
  will likely fluctuate more than the stock market as a whole. There may be a
  limited demand for shares of our common stock due to the reluctance or inability
  of certain investors to buy stocks quoted for trading on the OTCBB, lack of
  analyst coverage of our common stock, and a negative perception by investors
  of stocks traded on the OTCBB. As a result, even if prices appear favorable,
  there may not be sufficient demand to complete a stockholders sell order.

Without
an active public trading market or broader public ownership, shares of our
common stock are likely to be less liquid than the stock of most public
companies, and any of our stockholders who attempt to sell their shares in any
significant volume may not be able to do so at all, or without depressing the
publicly quoted bid prices for their shares.

The market price of our common stock is likely to be
volatile.

The
market price of our common stock is likely to be volatile as a result of many
factors including, but not limited to:

- the announcement of new products or product enhancements by us or our
  competitors;
- changes in the market for alternative fuels and generally in the capital
  markets;
- changes in the social, political and economic climate in the regions in
  which we operate;
- a lack of public awareness about availability of alternative fuels;
- announcements of technological innovations or new products available to
  the alternative fuel industry;
- developments concerning intellectual property rights and regulatory
  approvals;
- fluctuations in interest rates, exchange rates and the availability of
  capital in the capital markets; and
- the impact of sales and trading activity with respect to our common stock
  in the market.

These
and other factors are largely beyond our control, and the impact of these risks,
singly or in the aggregate, may result in material adverse changes to the market
price of our common stock and/or our results of operation and financial
condition.

Future sales of common stock or warrants, or the prospect
of future sales, may depress our stock price.

Sales
of a substantial number of shares of our common stock or warrants, or the
perception that sales could occur, including by the selling stockholder, could
adversely affect the market price of our common stock.

We may not be able to attract the attention of brokerage
firms for research and support.

Additional
risks may exist due to the fact that we are an OTCBB company that became public
without an underwritten offering. Securities analysts of brokerage firms may not
provide us with coverage because there is no incentive to brokerage firms to
recommend the purchase of our common stock. We cannot assure you that brokerage
firms will want to conduct any secondary offerings on our behalf in the future.

If we issue additional shares in the future, it will
result in the dilution of our existing shareholders.

Our
certificate of incorporation authorizes the issuance of up to 250,000,000 shares
of common stock with a par value of $0.001. Our board of directors may choose to
issue some or all of such shares to acquire one or more businesses or to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of the
Company.

Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our stock.

The
  Securities and Exchange Commission (the "Commission") has adopted regulations
  which generally define "penny stock" to be any equity security that has a market
  price (as defined) less than $5.00 per share or an exercise price of less than
  $5.00 per share, subject to certain exceptions. Our securities are covered by
  the penny stock rules, which impose additional sales practice requirements on
  broker-dealers who sell to persons other than established customers and "accredited
  investors". The term "accredited investor" refers generally to institutions
  with assets in excess of $5,000,000 or individuals with a net worth in excess
  of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their
  spouse. The penny stock rules require a broker-dealer, prior to a transaction
  in a penny stock not otherwise exempt from the rules, to deliver a standardized
  risk disclosure document in a form prepared by the Commission, which provides
  information about penny stocks and the nature and level of risks in the penny
  stock market. The broker-dealer also must provide the customer with current
  bid and offer quotations for the penny stock, the compensation of the broker-dealer
  and its salesperson in the transaction and monthly account statements showing
  the market value of each penny stock held in the customer's account. The bid
  and offer quotations, and the broker-dealer and salesperson compensation information,
  must be given to the customer orally or in writing prior to effecting the transaction
  and must be given to the customer in writing before or with the customer's confirmation.

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In addition, the penny stock rules require that prior to a transaction
  in a penny stock not otherwise exempt from these rules, the broker-dealer must
  make a special written determination that the penny stock is a suitable investment
  for the purchaser and receive the purchaser's written agreement to the transaction.
  These disclosure requirements may have the effect of reducing the level of trading
  activity in the secondary market for the stock that is subject to these penny
  stock rules. Consequently, these penny stock rules may affect the ability of
  broker-dealers to trade our securities. We believe that the penny stock rules
  discourage investor interest in and limit the marketability of our common stock.

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

In
addition to the "penny stock" rules described above, the Financial Industry
Regulatory Authority, or FINRA, has adopted rules that require that in
recommending an investment to a customer, a broker-dealer 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, the 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 that their customers buy our common
stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Investors should not anticipate receiving cash dividends
on our common stock.

We
have never declared or paid any cash dividends or distributions on our capital
stock. We currently intend to retain our future earnings, if any, to support
operations and to finance expansion and therefore we do not anticipate paying
any cash dividends on our common stock in the foreseeable future. Investors
seeking dividend income or liquidity should not invest in our common stock.

Carrigain Investment Ltd., or Carrigain, owns a
significant portion of our common stock and may delay, defer or prevent us from
taking actions that would be beneficial to our other stockholders.

As
of March 14, 2008, Carrigain owned approximately 66.50% of our outstanding
common stock. Accordingly, Carrigain will be able to exercise significant
influence over the outcome of substantially all matters required to be submitted
to our stockholders for approval, including decisions relating to the election
of our Board of Directors. In addition, Carrigain would be able to exercise
significant influence over the outcome of any proposed merger or consolidation
of our company. Carrigains ownership interest in our company may discourage
third parties from seeking to acquire control of our company which may adversely
affect the market price of our common stock.

Item 1B.Unresolved Staff Comments

Not Applicable.

Item 2.Properties

On
October 5, 2007, our majority owned subsidiary Global Ethiopia, entered into
lease agreements with the Southern Nations Nationalities People's Regional
State, Ethiopia, or SNRS, for a 50 year lease of 20,000 hectares of rural land
located in the Gamo Gofa zone in the SNRS for the purpose of cultivating castor
seeds and 15 hectares of land located in the Gamu Gofa zone, Kucha Woreda, in
the SNRS for the purpose of operating an oil crushing plant through an existing
facility on the property.

The
agreements are subject to, among other things, the following conditions: (i)
Global Ethiopia must pay SNRS a rental fee of Birr 47 (approximately US$5) or
Birr 78 (approximately US$8.50) per hectare per year, depending on whether the
leased land is defined as second or first class land, respectively; (ii) Global
Ethiopia must completely develop the 20,000 hectares leased to it within eight
years of the execution date of the agreement, including planting and maintaining
trees or other oil producing crops. If no development process is carried out
within a period of four (4) years from the date of execution of the agreement,
then the undeveloped land may be repossessed by SNRS by giving six (6) months
advance written notice to abandon the land; (iii) Global Ethiopia must
completely develop the 15 hectares leased to it within three years of the
execution date of the agreement; (iv) Global Ethiopia must perform a survey on
the 20,000 hectares within 24 months of the execution date of the agreement; (v)
Global Ethiopia has an option to lease additional farmland from the SNRS during
the term of the lease agreement (up to an additional 100,000 hectares of
farmland) on the same terms as the lease agreement for the 20,000 hectares; and
(vi) Global Ethiopia is not required to make any rental payments on its 20,000
hectare lease agreement until the fourth year of the agreement.

During
the term of the lease agreements, SNRS may cancel the lease due to failure of
Global Ethiopia to discharge its material obligations under the lease
agreements, provided, however, that Global Ethiopia is given one year prior
notice and fails to cure such failure within such one year period. Global
Ethiopia is a 99.9% owned subsidiary of Pacific, a 50.1% owned subsidiary of our
company that was formed as a joint venture with Yanai Man Projects Ltd. for the
purpose of producing crude castor oil to aid in the manufacture of bio-diesel
fuels.

12

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Our
facilities located in Israel occupy approximately 150 square meters. Our current
lease commitment relating to our facility in Israel expires at the end of August
2009.

Item 3.Legal Proceedings

We are currently not a party to any legal proceedings.

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

No
matters were submitted to a vote of our security holders through a solicitation
of proxies or otherwise during the quarterly period ended December 31, 2007.

PART II

Item 5.Market for Registrant's Common Equity,
Related Stockholder Matters and Issuers Purchases of Equity Securities

Market for Common Equity

Our
common stock is quoted on the OTC Bulletin Board under the symbol GEYI.
Trading in our common stock has occurred on a relatively inconsistent basis and
the volume of shares traded has been limited.

The
  following table shows the quarterly high and low reported bid prices per share
  for our common stock over the fiscal quarters for the last two fiscal years
  as quoted on the OTC Bulletin Board. The bid prices represent quotations by
  dealers without adjustments for retail mark-ups, mark-downs or commissions and
  may not represent actual transactions. Investors should not rely on historical
  prices of our common stock as an indication of its future price performance.
  The last sale price of our common stock on March 26, 2008, was $0.65 per share.

|               | Low   | High 
|-------------- | ----- | -----
|2006           |       |      
|First Quarter  | $0.01 | $0.01
|Second Quarter | $0.01 | $0.01
|Third Quarter  | $0.01 | $0.01
|Fourth Quarter | $0.01 | $0.01
|               |       |      
|               |       |      
|2007           |       |      
|First Quarter  | $0.01 | $0.01
|Second Quarter | $0.01 | $2.05
|Third Quarter  | $0.25 | $1.75
|Fourth Quarter | $0.25 | $0.99

Holders

As
of March 14, 2008, there were 63,187,764 shares of our common stock outstanding
held by 48 stockholders of record.

Dividends

We
have not paid any cash dividends on our common stock and do not anticipate
paying any cash dividends in the foreseeable future. We currently intend to
retain future earnings, if any, to fund the development and growth of our
business. Any future determination to pay cash dividends will be at the
discretion of our board of directors and will be dependent upon our financial
condition, operating results, capital requirements, applicable contractual
restrictions and other factors as the board of directors deems relevant.

Recent Sales of Unregistered Securities

During the 2007 fiscal year, we have sold and issued the following unregistered
securities:

On
February 7, 2007, we issued a total of 17,031,000 shares of common stock at a
price per share of US$0.01 to 21 investors for an aggregate consideration of
$170,310 of which $40,910 was paid in cash and $129,400 was paid by the issuance
of a note with maturities ranging from 90 days to one year. We issued the
securities to the investors who are non-U.S. persons (as that term is defined in
Regulation S of the Securities Act) in an offshore transaction relying on
Regulation S and/or Section 4(2) of the Securities Act.

On
  April 30, 2007, we issued 40,175,000 shares of common stock to 12 investors
  at a purchase price per share of US$0.01 for an aggregate consideration of $401,750
  of which approximately $47,000 was paid in cash, approximately $28,000 was by
  redemption of promissory notes and approximately $327,000 was paid by the issuance
  of notes receivables having maturities up to one year. As of December 31, 2007,
  an amount of $150,000 has not been collected yet.

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We issued the securities to investors who are non-U.S. persons
  (as that term is defined in Regulation S of the Securities Act) in an offshore
  transaction relying on Regulation S and/or Section 4(2) of the Securities Act.

On
April 30, 2007, we granted 5,055,021 stock options exercisable for five years at
an exercise price of $0.01 per share to Asi Shalgi, the new President of the
Company. Effective January 31, 2008, the expiration date of the options was
extended to April 30, 2017 and such options will begin to vest at a rate of 25%
per year beginning April 30, 2008. We issued the stock options to non-U.S.
persons (as that term is defined in Regulation S of the Securities Act) in an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act.

On
May 1, 2007, pursuant to the terms of an employment agreement, we granted
options to purchase 400,000 shares of common stock exercisable for five years at
an exercise price of $0.01 per share to Dr. Irit Arbel, who was hired to be the
Investor Relations and Marketing Advisor of the Company. Dr. Arbels employment
agreement was terminated as of January 1, 2008 and 50,000 options were forfeited
upon the termination. We issued the stock options to non-U.S. persons (as that
term is defined in Regulation S of the Securities Act) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act.

On
July 10, 2007, we issued a 10% secured convertible debenture, for gross proceeds
of $500,000, as a part of a private placement of up to $4,000,000 in value of
debentures to the same investor. In conjunction with this financing, we issued
warrants to purchase 300,000 shares of common stock exercisable for five years
at an exercise price of $2.35 and warrants to purchase additional 300,000 shares
of common stock exercisable for five years at an exercise price of $2.50. We
paid a cash commission of $35,000 and a structuring fee of $20,000 to Yorkville
Advisors, LLC in connection with this issuance.

The
10% secured convertible debentures, which, as amended, mature on October 31,
2010, are convertible by the debenture holder into common shares at a fixed
conversion price of $2.20 per share. The debentures are secured against all our
assets.

On
October 23, 2007, we issued an additional 10% secured convertible debenture for
an aggregate consideration of $1,500,000. The debenture matures on October 31,
2010 and is convertible by the debenture holder into common shares at a fixed
conversion price of $2.20 per share subject to further adjustment as further set
out in the debenture. The debenture is secured against all our assets. We paid a
commission of $105,000 and a due diligence fee of $30,000 to Yorkville Advisors,
LLC in connection with this issuance.

The
debenture was issued pursuant to the exemption from registration under the
Securities Act provided by Section 4(2), Section 4(6) and/or Rule 506 of
Regulation D promulgated under the Securities Act to the investors and brokers
who are accredited investors within the respective meanings ascribed to that
term in Rule 501(a) under the Securities Act.

On
December 5, 2007 we issued a 10% secured convertible debenture for gross
proceeds of $1,000,000. The debenture matures on October 31, 2010 and is
convertible by the debenture holder into common shares at a fixed conversion
price of $2.20 per share subject to further adjustment as further set out in the
debenture. The debenture is secured against all our assets. We paid a commission
of $70,000 to Yorkville Advisors, LLC in connection with this issuance.

The
debenture was issued pursuant to the exemption from registration under the
Securities Act provided by Section 4(2), Section 4(6) and/or Rule 506 of
Regulation D promulgated under the Securities Act to the investors and brokers
who are accredited investors within the respective meanings ascribed to that
term in Rule 501(a) under the Securities Act.

Throughout
fiscal year 2007, we authorized the issuance of options to our directors and
officers to acquire in the aggregate 2,200,000 shares of our common stock. We
granted these options on January 31, 2008. For more information, see "Item 11.
Executive Compensation".

Use of Proceeds from Registered Securities

None.

Issuer Purchases of Equity Securities

None.

Item 6.Selected Consolidated Financial
Data

Not applicable.

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

You should read the following discussion in conjunction with
  our consolidated financial statements and related notes thereto. In addition
  to historical information, this discussion contains forward-looking statements
  that involve risks, uncertainties and assumptions that could cause actual results
  to differ materially from managements expectations. Factors that could
  cause such differences include those described in Risk Factors in
  Item 1A in this Annual Report on Form 10-K.

14

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Overview

Our
company was organized on February 16, 1999, under the laws of the State of
Nevada as Global Smartcards Inc. On April 28, 2003, we changed our name to
Global Energy Inc. Our business address is 415 Madison Avenue, 15th Floor, New
York, New York. Our telephone number is +1 (646) 673-8435. Our registered agent
is Rite, Inc., 1905 South Eastern Ave., Las Vegas, NV 89104.

Effective
July 1, 2005, we sold all of our oil and gas assets for the sum of $50,000. The
sale of these oil and gas assets was completed on July 6, 2005.

Our Current Business

Our
mission is to produce and supply alternative fuels, based on alternative energy
producing technologies, which utilize renewable sources for creating viable
energy sources while contributing to severe environmental conservation issues.

Our
strategy is to operate a growing number of owned industrial scale production
facilities in several international locations and emerge as a leading supplier
of mineral diesel, selling to industrial and governmental customers on every
level of the supply chain.

On
May 2, 2007, we entered into a letter of intent with AlphaKat, pursuant to which
we agreed, subject to certain conditions, to purchase the AlphaKats KDV 500
turbine technology and assist with the marketing and development of the
technology. In connection with the development of the KDV technology and the
construction of the plants, we agreed to: (i) provide financial support for the
project, (ii) create a joint venture company for the marketing and development
of the technology; (iii) purchase three KDV 500 turbines for implementation in
Poland, the United States and Israel; (iv) start a regulatory process, including
filing of permit applications at a cost of Euro €100,000; commence monthly
payments of Euro €10,000 to Dr. Christian Koch, the owner of AlphaKat, after due
diligence on the KDV 500 turbine is completed; and (v) enter into a definitive
agreement for the KDV 500 turbine. We are currently working on receiving permits
in the United States and Israel, while in Poland and Germany we achieved basic
permits from the authorities for the implementation of the KDV 500 turbine. As
of the date of this report, we have not ordered any of the KDV 500 turbines
other than placing an advanced payment for one unit.

In
May, 2007, we established two subsidiaries in Israel: Global Fuel Israel Ltd.,
or Fuel, and Global N.R.G. Pacific Ltd., or Pacific. Fuel will render services
to us, however the nature and the scope of the services is not yet defined.

On
July 9, 2007, we entered into a shareholder agreement to form a joint venture
with Yanai Man Projects Ltd., or Yanai, pursuant to which we hold 50.1% of
Pacific and Yanai holds 49.9% of Pacific. Pacific's purpose is the procurement
of agricultural knowledge and the growth of vegetation for the purpose of
producing crude castor oil to aid in the process of manufacturing bio-diesel
fuel. The first project is to work with an Ethiopian entity to farm castor seeds
for castor oil in Ethiopia.

On
July 10, 2007, we entered into an agreement with AlphaKat based on the letter of
intent executed by the parties on May 2, 2007, to produce mineral diesel from
municipality solid waste using the KDV process, originally developed by AlphaKat
and its owner Dr. Christian Koch, over a 30 year period. The process is
applicable to biomass waste and any waste containing organic materials
(hydrocarbons), including plastic, textile, rubber, leather, wood, paper, animal
and agriculture waste. The KDV depolymerization technology is an
alternative-energy source. It provides a patent-protected solution for the
simultaneous creation of clean energy and the disposal of waste. The process
uses a high speed turbine and a proprietary catalyst to convert and distillate
waste into diesel oil. The result is a sulphate free diesel oil that meets the
requirements of the EN590 standard for diesel oil and is intended for use in
trucks and heavy equipment, as well as by major petroleum companies.

Pursuant
to the agreement with AlphaKat, we incorporated and operate a company named
AlphaKat-Global Energy GmbH. We and AlphaKat each hold 50% of the shares of
AGEI. The goal of AGEI is to provide worldwide marketing and sales of technology
which converts hydrocarbon waste into diesel oil. AGEI has the exclusive rights
to sell certain technology of Alphakat in the United States and China and has
non-exclusive rights for certain other parts of the world.

On
October 5, 2007, our majority owned subsidiary, Global Energy Ethiopia PLC, or
Global Ethiopia, entered into lease agreements with the Southern Nations
Nationalities People's Regional State, Ethiopia, or SNRS, for a 50 year lease of
20,000 hectares of rural land located in the Gamo Gofa zone in the SNRS for the
purpose of cultivating castor seeds and 15 hectares of land located in the Gamu
Gofa zone, Kucha Woreda, in the SNRS for the purpose of operating an oil
crushing plant through an existing facility on the property.

On October 20, 2007, we entered into an agreement for consulting services with
  Trianon Partners, or Trianon, and as of October 24, 2007, we entered into a
  joint development agreement with Trianon. In consideration of the consulting
  services to be provided by Trianon, we agreed to pay Trianon a fixed fee of
  $250,000 which was to be paid in equal monthly installments of $10,000 once
  we decided to commence the construction of the plant, with the balance to be
  paid upon mechanical completion of the plant.

15

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The agreement for consulting services was terminated by mutual
  consent on February 6, 2008. In consideration of the joint development agreement,
  we agreed to grant an exclusive license to Trianon, throughout the States of
  Texas, New York and New Jersey to be formed with AlphaKat, to market systems
  that use a proprietary bio-diesel technology for the conversion of waste to
  bio-diesel.

On
February 6, 2008, we entered into a business and royalty agreement with Covanta
Energy Corporation, under which we granted to Covanta certain rights, both
exclusive and non-exclusive, for the use, practice, and improvement of the KDV
technology for the purpose of converting waste materials containing hydrocarbons
into diesel oil in countries including the US, the UK, China and the Republic of
Ireland. We did so in exchange for the retention by us of certain rights to
pursue specified small scale projects using the technology, which Covanta will
have the option to invest in, as well as our retention of the right to invest
10% - 35% of the equity in projects initiated by Covanta. Covanta agreed to pay
us a royalty equal to 10% of the gross revenues derived from the sale of diesel
oil from each project for a period of 20 years from the date the applicable
project achieves commercial operation. Under the agreement, Covanta shall also
be responsible for financing 100% of the costs of erection of a demonstration
plant, which it may disassemble and make available for pick up by us, at no cost
to us, upon Covanta terminating its rights to the technology.

On
the same day, we entered into a license agreement with Covanta under which we
granted it a right to sell systems based on the technology to governmental
organizations subject to certain pre-conditions regarding the purchase of a
minimum number of systems based on the technology. Covanta's rights under both
the license agreement and the business and royalty agreement shall be
non-exclusive until it has (i) issued a purchase order for a demonstration
plant, and (ii) placed purchase orders for five additional systems.
AlphaKat-Global Energy GmbH will receive a 10% commission from the sale of all
systems, part of which shall be payable to American Renewable Diesel, LLC,
subject to the business and development agreement described below.

On
February 6, 2008, we executed a business and development agreement with
Renewable Diesel, LLC, an affiliate of Trianon Partners and of American
Renewable Diesel, LLC, under which both Renewable and our company shall have the
right to identify and develop certain projects to convert feedstock to diesel
using the KDV technology in New York, California and Texas, as well as Florida
and New Jersey under certain conditions. If we identify a project, Renewable
shall be entitled to invest up to 25% of the total required equity. If Renewable
identifies a project, we shall be entitled to invest up to 51% and Covanta will
be entitled to invest up to 24% of the total required equity. In all projects,
Renewable shall manage the projects and shall be entitled to development fees in
the amount of $100,000, up to a total of $2,000,000, for each KDV 500 system
included in the project.

In connection with the business and development agreement described above,
AlphaKat-Global Energy GmbH executed a license agreement with American Renewable
Diesel, LLC, an affiliate of Trianon Partners and of Renewable, which granted
American certain exclusive rights to market and sell systems based on the
technology in the territory of California, New York and Texas, as well as New
Jersey and Florida, subject to the satisfaction of minimum sales requirements.
The territory may be reduced and/or exclusive rights may become non-exclusive
rights, depending on whether minimum sale requirements are satisfied. American
is to receive a commission on all sales in the territory. Systems sold to
Covanta shall be credited to American, regardless of whether such systems are
for use inside or outside the territory.

In
March 2008 we entered into a Memorandum of Understand with ShenMu SanJiang Coal
Chemical Company Ltd. (Shaanxi) located in the Peoples Republic of China.
Under the terms of the MOU, we and Shaanxi, pending completion of due diligence
of the KDV technology in Germany, plan to jointly own a new entity. We would own
51% of the new entity, unless Sinopec Beijing Governmental Energy Company
becomes a substantial equity partner, in which case our interest would be 26%.
The new entity would initially build, own and operate an AlphaKat system
expected to produce ten thousand (10,000) liters of diesel per hour from tar
oil. Shaanxi is a producer of blue coal, where significant quantities of tar oil
are produced as a residual of the production process. Shaanxi would provide the
new company with tar oil at a discount to the published market price for
conversion into high quality diesel. The MOU provides for the extension and
growth capabilities of the system after successful conversion of tar oil to
diesel. We would be entitled, under the terms of the MOU, to royalties from the
sale of diesel produced by the AlphaKat KDV Technology. Completion of the
transaction is subject to due diligence and negotiation of final documentation.

Critical Accounting Policies

A. Going concern considerations

As of December 31, 2007, the Company had negative working capital of $1,479
  thousands and an accumulated deficit of approximately $1,837 thousands. The
  Company's ability to continue to operate as a going concern is dependent on
  its ability to generate sufficient cash flows to meet its obligations on a timely
  basis, to obtain additional financing and to ultimately attain profitability.
  The Company has no revenues and has incurred losses and an accumulated deficit
  resulting from the companys activity as a development stage company and
  has a negative cash flow from operating activities. In the event the Company
  is unable to successfully raise capital and generate revenues, it is unlikely
  that the Company will have sufficient cash flows and liquidity to finance its
  business operations as currently contemplated.

16

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There can be no assurance that additional funds will be available
  on terms acceptable to the Company, or at all. These conditions raise substantial
  doubt about the Company's ability to continue to operate as a going concern.
  The financial statements contained in this annual report do not include any
  adjustments to reflect the possible future effect on the recoverability and
  classification of assets or the amounts and classification of liabilities that
  may result from the outcome of this uncertainty.

B. Derivative financial instruments (derivatives)

The
Company has adopted FAS 133, as amended, which establishes accounting and
reporting standards for derivatives, including certain derivatives embedded in
other contracts, and for hedging activities. Under FAS 133, all derivatives are
recognized on the balance sheet at their fair value. On the date that the
Company enters into a derivative contract, it designates the derivative, for
accounting purposes, as: (1) hedging instrument, or (2) non-hedging instrument.
Any changes in fair value are to be reflected as current gains or losses or
other comprehensive gains or losses, depending upon whether the derivative is
designated as a hedge and what type of hedging relationship exists. Changes in
fair value of non-hedging instruments are carried to financial expenses-net on
a current basis. To date, the Company did not have any contracts that qualify
for hedge accounting under FAS 133.

Results of Operations  Fiscal Year Ended December 31,
2007

We
initiated our activities during the last six month of 2007, focusing our effort
in building an infrastructure that will support our future activities in the
alternative energy areas. We did not generate any revenue in the year ended
December 31, 2007 and have incurred a loss of $1,665,000.

Liquidity and Capital Resources

Our
cash equivalents were $1,470,000 as of December 31, 2007, compared to $11,000 as
of December 31, 2006. This increase in cash equivalents is attributed to an
issuance of convertible debenture which took place during the last four month of
2007. The Company raised an amount to $2,790,000 by an issuance of convertible
debenture. As of December 31, 2007, the Company has received three installments
amounting to $3,000,000 ($2,790,000 net of issuance cost). The Company needs to
finance its future activities from its cash equivalents. At December 31, 2007,
we had a negative working capital of $1,479,000; we are expecting to continue to
consume cash in our activities through payments of salaries, payments for
services and other costs. We also plan to continue financing our operations
through a combination of private placement, stock issuances, debt issuances,
mutual development with possible milestone license payments and research and
development programs. There are no assurances, however, that we will be
successful in obtaining an adequate level of financing required for the
long-term development and commercialization of our planned products.

Off-Balance Sheet Arrangements

We do not currently have off-balance sheet arrangements.

Going Concern Considerations

As
of December 31, 2007, the Company had negative working capital of $1, 479
thousands and a capital deficiency of $936 thousands. The Company's ability to
continue to operate as a going concern is dependent on its ability to generate
sufficient cash flows to meet its obligations on a timely basis, to obtain
additional financing and to ultimately attain profitability. The Company has no
revenues and has incurred recurring operating losses and an accumulated deficit
and has a negative cash flow from operating activities.

In the event the Company is unable to successfully raise capital and generate
revenues, it is unlikely that the Company will have sufficient cash flows and
liquidity to finance its business operations as currently contemplated.
Accordingly, the Company will likely reduce general and administrative expenses
and cease or delay development projects until it is able to obtain sufficient
financing. There can be no assurance that additional funds will be available on
terms acceptable to the Company, or at all.

These
conditions raise substantial doubt about the Company's ability to continue to
operate as a going concern. The accompanying financial statements do not include
any adjustments to reflect the possible future effect on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result from the outcome of this uncertainly.

Risk Factors

The
fuel produced using our KDV technology has never achieve technical or commercial
viability yet. The Company has never utilized the KDV technology under the
conditions or in the volumes that will be required for us to be profitable and
cannot predict all of the difficulties that may arise. The KDV technology, when
used, may require further research, development, regulatory approvals,
environmental permits, design and testing prior to commercialization.
Accordingly, the KDV technology to manufacture fuel may not perform successfully
on a commercial basis and they may never generate. For discussion of further
risks related to our business and operations see Risk Factors in Item 1A in
this Annual Report on Form 10-K.

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Employees

Currently
we have five employees: Asaf Shalgi our President, Chief Executive Officer and a
director; Yossi Raz, our Chief Technology Officer; Alex Werber, our Chief
Financial Officer and Treasurer; Yanai Man who manages our Bio-diesel
activities, and a Company secretary who serves as our office manager in Israel.

Competition

The
market for the manufacture, marketing and sale of bio-diesel, heating and other
alternative fuels is highly competitive. According to the National Biodiesel
Board (NBB), as of January 31, 2007, there were at least 105 companies that are
engaged in the development, manufacture and marketing of bio-diesel fuel, with
current production capacity estimated at 864 million gallons per year. The NBB
further estimates that another 1.7 billion gallons of annual plant capacity are
under development (the preceding data reflect capacity, not actual production
levels or demand). Such competition could be intense, thus driving up the costs
of feedstock, plant construction, attracting and retaining qualified engineers,
chemists and other key employees, as well as other operating expenses. Moreover,
if production capacity in the industry increases faster than demand for
bio-diesel and other alternative fuels, sale prices could be depressed. Falling
oil prices would also negatively affect demand and the competitive position of
bio fuel. We will also compete with petroleum fuels.

Competition
from other alternative fuels will likely increase if prices of energy on the
commodities markets, including oil and bio-diesel, rise as they have in recent
years. Additionally, new companies are constantly entering the market, thus
increasing the competition. This could also have a negative impact on us or our
sublicensees ability to obtain additional capital from investors. Larger
foreign owned and domestic companies which have been engaged in this business
for substantially longer periods of time may have access to greater financial
and other resources. These companies may have greater success in the recruitment
and retention of qualified employees, as well as in conducting their own fuel
manufacturing and marketing operations, which may give them a competitive
advantage. In addition, actual or potential competitors may be strengthened
through the acquisition of additional assets and interests. If we or our
sublicensees are unable to compete effectively or adequately respond to
competitive pressures, this may materially adversely affect our results of
operations and financial condition. On the other hand, if petroleum prices fall,
competition from such fuels will intensify.

Plan of Operations

During
  the next twelve months we will continue to concentrate on our two main activities,
  the first dealing with the development of plants for the production of diesel
  out of domestic waste (industrial activities) and the second focusing on our
  project in Ethiopia for the cultivation of castor plant for biodiesel production
  (agricultural activities).

In
  the industrial activity we will continue to initiate joint ventures to use the
  technology of diesel oil production out of domestic and organic waste and to
  establish partnerships in order to set up plants for diesel production out of
  waste.

We
  will continue our agricultural project started in the last quarter of 2007 in
  Ethiopia for the growing and cultivation of the castor plant. In the frame of
  this project we expect cultivate between 6,000  12,000 hectares base on
  our agreements with farmers and local states in south of Ethiopia. Nowadays
  we are in a process of establishment of the logistics and administrative layout
  in the project area and we are starting to sow the castor seeds. The cultivation
  will be carried out by rural farmers in the region. We undertook to employ the
  farmers by providing input and agronomic support. In addition, we will continue
  to develop 20,000 hectares leased from Southern Nations Nationalities People's
  Regional State, Ethiopia ("SNRS").

Capital Resource Requirements

The
  scope of our activities rely upon our abilities to raise sufficient funds in
  order to finance our future plans. The minimum requirement for the next 12 months
  ending December 31, 2008, is approximately $27.4 million for our proposed business
  activities. This budget includes the funds required to finance our marketing
  activities, purchase of KDV machines, salaries of the employees, office and
  maintenance costs, cost of cultivation and among others, all of them necessary
  to execute our plan of operations. The following table provides a cost-breakdown
  of the upcoming year of operations.

|Estimated Funding Required During the Next 12 Months |   |            | 
|---------------------------------------------------- | - | ---------- | 
|G&A Salaries                                         | $ | 400,000    | 
|Other Operations                                     | $ | 750,000    | 
|Industrial Expenses                                  | $ | 16,250,000 | 
|Agriculture Expenses                                 | $ | 10,000,000 | 
|Total                                                | $ | 27,400,000 | 

Newly Issued Accounting Pronouncements

In
December 2007, the FASB issued Statement of Financial Accounting Standards No.
141 (revised 2007), "Business Combinations" ("SFAS 141(R)". SFAS 141(R) changes
the accounting for business combinations, including

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the measurement of acquirer shares issued in consideration for
a business combination, the recognition of contingent consideration, the
accounting for contingencies, the recognition of capitalized in-process research
and development, the accounting for acquisition-related restructuring cost
accruals, the treatment of acquisition related transaction costs and the
recognition of changes in the acquirers income tax valuation allowance and
income tax uncertainties. SFAS 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. Early
application is prohibited. The Company will be required to adopt SFAS 141(R) on
January 1, 2009.

In
December 2007, the FASB issued FAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - an amendment of Accounting Research Bulletin
No. 51 (FAS No. 160). FAS No. 160 establish accounting and reporting
standards for non-controlling interests in a subsidiary and deconsolidation of a
subsidiary. Early adoption is not permitted. As applicable to the Company, these
statements will be effective as of the year beginning January 1, 2009. The
Company is currently evaluating the potential impact, if any, the adoption of
FAS No. 160 would have on its consolidated financial statements.

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value,
establishes a framework and gives guidance regarding the methods used for
measuring fair value, and expands disclosures about fair value measurements.
SFAS 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal years (January
1, 2008, for the Company). The Company is currently assessing the impact that
SFAS 157 may have on its results of operations and financial position.

In
  February 2007, the FASB issued Statement of Financial Accounting Standards No.
  159, The Fair Value Option for Financial Assets and Financial Liabilities
  - Including an amendment of FASB Statement No. 115 (SFAS 159).
  SFAS 159 is expected to expand the use of fair value accounting but does not
  affect existing standards which require certain assets or liabilities to be
  carried at fair value. The objective of SFAS 159 is to improve financial reporting
  by providing companies with the opportunity to mitigate volatility in reported
  earnings caused by measuring related assets and liabilities differently without
  having to apply complex hedge accounting provisions. Under SFAS 159, a company
  may choose, at its initial application or at other specified election dates,
  to measure eligible items at fair value and report unrealized gains and losses
  on items for which the fair value option has been elected in earnings at each
  subsequent reporting date. SFAS 159 is effective for financial statements issued
  for fiscal years beginning after November 15, 2007, and interim periods within
  those fiscal years (January 1, 2008, for the Company). If the company is to
  elect the fair value option for its existing assets and liabilities, the effect
  as of the adoption date, shall be reported as a cumulative-effect adjustment
  to the opening balance of retained earnings. The Company is currently assessing
  the impact that SFAS 159 may have on its financial position.

In
December 2007, the FASB ratified EITF Issue No. 07-01, "Accounting for
Collaborative Arrangements" ("EITF 07-01"). EITF 07-01 defines collaborative
arrangements and establishes reporting requirements for transactions between
participants in a collaborative arrangement and between participants in the
arrangement and third parties. EITF 07-01 also establishes the appropriate
income statement presentation and classification for joint operating activities
and payments between participants, as well as the sufficiency of the disclosures
related to these arrangements. EITF 07-01 is effective for fiscal years
beginning after December 15, 2008 (January 1, 2009, for the Company). EITF 07-01
shall be applied using modified version of retrospective transition for those
arrangements in place at the effective date. An entity should report the effects
of applying this Issue as a change in accounting principle through retrospective
application to all prior periods presented for all arrangements existing as of
the effective date, unless it is impracticable to apply the effects the change
retrospectively. The Company is currently assessing the impact that EITF 07-01
may have on its results of operations and financial position.

Item 7A.Quantitative and Qualitative Disclosures
About Market Risk

Not applicable.

Item 8.Financial Statements and Supplementary Data

19

---





GLOBAL ENERGY INC. 
  (A development stage company)

CONSOLIDATED FINANCIAL STATEMENTS

2007 ANNUAL REPORT



F-1

---









GLOBAL ENERGY INC. 
  (A development stage company)

2007 ANNUAL REPORT

TABLE OF CONTENTS



|                                                                         | Page  
|------------------------------------------------------------------------ | ------
|                                                                         |       
|REPORTS OF INDEPENDENT
      REGISTERED PUBLIC ACCOUNTING FIRMS          | F-3   
|                                                                         |       
|CONSOLIDATED FINANCIAL STATEMENTS IN U.S.
      DOLLARS:                 |       
|Balance Sheets                                                           | F-5   
|Statements of operations                                                 | F-6   
|Statements of changes in shareholders' equity (capital
      deficiency) | F-7   
|Statements of cash flows                                                 | F-8   
|Notes to financial statements                                            | F-9-23

_____________________
  ____________________________________
  _____________________

F-2

---

| |                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Kesselman
      & KesselmanCertified Public Accountants 
      Trade Tower, 25 Hamered Street 
      Tel Aviv 68125 Israel 
      P.O Box 452 Tel Aviv 61003 
      Telephone +972-3-7954555 
      Facsimile +972-3-7954556

Report of Independent Registered Public Accounting Firm

To the shareholders of Global Energy Inc. (a development stage
  company):

We have audited the accompanying consolidated balance sheets
  of Global Energy Inc. and its subsidiaries (a development stage enterprise)
  as of December 31, 2007, and the related consolidated statement of operations,
  changes in shareholders' equity (capital deficiency) and cash flows for the
  year ended December 31, 2007 and, cumulatively, the period from January 1, 2007
  to December 31, 2007 (not separately presented herein). These financial statements
  are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.
  We did not audit the cumulative totals of the Company for the period from July
  5, 2005 (date of inception) to December 31, 2006, which totals reflect a deficit
  of $98,998 accumulated during the development stage. Those cumulative totals
  were audited by other auditors whose report, dated February 9, 2007, expressed
  an unqualified opinion on the cumulative amounts.

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. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the December 31, 2007 consolidated financial
  statements referred to above present fairly, in all material respects, the financial
  position of Global Energy Inc. and its subsidiaries (a development stage enterprise)
  at December 31, 2007, and the results of their operations and their cash flows
  for the year then ended and, cumulatively, for period from January 1, 2007 to
  December 31, 2007 (not separately presented herein), in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1c to
  the financial statements, the Company has suffered recurring losses from operations,
  has limited capital resources and has a net capital deficiency that raise substantial
  doubt about its ability to continue as a going concern. Management's plans in
  regard to these matters are also described in Note 1c. The financial statements
  do not include any adjustments that might result from the outcome of this uncertainty.

Kesselman & Kesselman 
  Tel Aviv, Israel 
  March 31, 2008

F-3

---

|Chang Lee LLP               
|----------------------------
|Chartered
      Accountants 
|505  815 Hornby Street     
|Vancouver, B.C, V6Z 2E6     
|Tel: 604-687-3776           
|Fax: 604-688-3373           
|E-mail: info@changleellp.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

GLOBAL ENERGY INC.
  (A development stage company)

We have audited the balance sheets of Global Energy Inc.(the Company) (a development stage company)as at December
  31, 2006 and 2005 and the related statements of operations, stockholders
  equity, and cash flows from July 7, 2005 (date of becoming a development stage
  company) to December 31, 2006 and statements of operations, stockholders
  equity, and cash flows for the years ended December 31, 2006 and 2005. These
  financial statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with the standards of
  the Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. An audit includes
  examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audit provides
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the financial position of the Company
  as at December 31, 2006 and 2005 and the results of their operations and their
  cash flows for the years ended December 31, 2006 and 2005 and for the period
  from July 7, 2005 (date of becoming a development stage company) to December
  31, 2006 in conformity with generally accepted accounting principles in the
  United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going concern. As discussed in Note 1, the
  Company has incurred operating losses. These factors, among others, raise substantial
  doubt about the Companys ability to continue as a going concern. Managements
  plans in regard to these matters are described in Note 1. The financial statements
  do not include any adjustments that might result from the outcome of this uncertainty.

|Vancouver, Canada |                      
|----------------- | ---------------------
|February 9, 2007  | Chartered Accountants



F-4

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GLOBAL ENERGY INC.(A development stage company) 
  CONSOLIDATED BALANCE SHEETS

|                                                               |   | December
      31 |  
|-------------------------------------------------------------- | - | ----------------- | -
|                                                               |   | 2007              |  
|                                                               |   | In thousands      |  
|Assets                                                         |   |                   |  
|                                                               |   |                   |  
|CURRENT ASSETS:                                                |   |                   |  
|Cash and cash equivalents                                      | $ | 1,470             |  
|Other accounts receivable                                      |   | 187               |  
|                                                               |   |                   |  
|Total current assets                                           |   | 1,657             |  
|LONG TERM DEPOSITS                                             |   | 18                |  
|ADVANCE TO MINORITY INTEREST SHAREHOLDER                       |   | 20                |  
|PROPERTY AND EQUIPMENT, net of accumulated depreciation        |   | 523               |  
|Total assets                                                   | $ | 2,218             |  
|                                                               |   |                   |  
|Liabilities net of capital deficiency                          |   |                   |  
|                                                               |   |                   |  
|CURRENT LIABILITIES:                                           |   |                   |  
|Accounts payables                                              | $ | 183               |  
|Accounts payable
      - other                                 |   | 317               |  
|Demand loans payable - related parties                         |   | 18                |  
|Promissory note
      payable                                  |   |                   |  
|Debentures convertible into shares                             |   | 2,618             |  
|                                                               |   |                   |  
|Total current liabilities                                      |   | 3,136             |  
|MINORITY INTEREST                                              |   | 18                |  
|CAPITAL DEFICIENCY:                                            |   |                   |  
|Share capital (Note
      9) -                                 |   |                   |  
|Common shares of
      $0.001 par value each:                  |   |                   |  
|Authorized: 250,000,000 shares and 25,000,000 at               |   |                   |  
|December
      31, 2007 and December 31, 2006, respectively;   |   |                   |  
|Issued and outstanding: 63,187,764 shares and 5,981,764 shares |   |                   |  
|at December
      31, 2007 and December 31, 2006, respectively |   | 63                |  
|Additional paid-in
      capital                               |   | 742               |  
|Warrants                                                       |   | 246               |  
|Share subscription
      received                              |   |                   |  
|Receivables in respect of shares
      issued                  |   | (150              | )
|Accumulated deficit
      during development stage             |   | (1,764            | )
|Accumulated deficit before development
      stage             |   | (73               | )
|Total capital deficiency                                       |   | (936              | )
|                                                               |   |                   |  
|Total liabilities net of capital deficiency                    | $ | 2,218             |  

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

F-5

---

GLOBAL ENERGY INC.(A development stage company) 
  CONSOLIDATED STATEMENTS OF OPERATIONS

|                                              |   |                                 |   |   |              |   |   |           |   |   | Cumulative   |  
|--------------------------------------------- | - | ------------------------------- | - | - | ------------ | - | - | --------- | - | - | ------------ | -
|                                              |   |                                 |   |   |              |   |   |           |   |   | from July 7, |  
|                                              |   |                                 |   |   |              |   |   |           |   |   | 2005 through |  
|                                              |   | Year
      ended December 31    |   |   | December 31, |  
|                                              |   | 2007                            |   |   | 2006         |   |   | 2005      |   |   | 2007         |  
|                                              |   | In thousands, except share data |   |   |              |  
|                                              |   |                                 |   |   |              |   |   |           |   |   |              |  
|OPERATING EXPENSES -                          |   |                                 |   |   |              |   |   |           |   |   |              |  
|General
      and administrative expenses (*) | $ | (1,589                          | ) | $ | (69          | ) | $ | (62       | ) | $ | (1,688       | )
|OPERATING LOSS                                |   | (1,589                          | ) |   | (69          | ) |   | (62       | ) |   | (1,688       | )
|                                              |   |                                 |   |   |              |   |   |           |   |   |              |  
|FINANCIAL EXPENSES - NET                      |   | (76                             | ) |   |              |   |   |           |   |   | (76          | )
|NET LOSS FROM CONTINUING                      |   |                                 |   |   |              |   |   |           |   |   |              |  
|OPERATIONS                                    |   | (1,665                          | ) |   | (69          | ) |   | (62       | ) |   | (1,764       | )
|                                              |   |                                 |   |   |              |   |   |           |   |   |              |  
|NET INCOME FROM DISCONTINUED                  |   |                                 |   |   |              |   |   |           |   |   |              |  
|OPERATION
      (NET OF TAX)                  |   |                                 |   |   |              |   |   | 68        |   |   |              |  
|NET INCOME (LOSS)                             | $ | (1,665                          | ) | $ | (69          | ) | $ | 6         |   | $ | (1,764       | )
|NET INCOME (LOSS)                             |   |                                 |   |   |              |   |   |           |   |   |              |  
|SHARE, BASIC AND
      DILUTED:               |   |                                 |   |   |              |   |   |           |   |   |              |  
|NET LOSS PER SHARE FROM                       |   |                                 |   |   |              |   |   |           |   |   |              |  
|CONTINUING OPERATIONS                         | $ | (0.03                           | ) | $ | (0.01        | ) | $ | (0.01     | ) |   |              |  
|NET INCOME PER SHARE FROM                     |   |                                 |   |   |              |   |   |           |   |   |              |  
|DISCONTINUING OPERATIONS                      |   |                                 |   |   |              |   | $ | 0.01      |   |   |              |  
|NET LOSS PER SHARE FOR                        |   |                                 |   |   |              |   |   |           |   |   |              |  
|THE YEAR                                      | $ | (0.03                           | ) | $ | (0.01        | ) |   | **        |   |   |              |  
|                                              |   |                                 |   |   |              |   |   |           |   |   |              |  
|WEIGHTED AVERAGE NUMBER OF                    |   |                                 |   |   |              |   |   |           |   |   |              |  
|SHARES
      USED IN COMPUTING                |   |                                 |   |   |              |   |   |           |   |   |              |  
|BASIC AND DILUTED
      NET LOSS              |   |                                 |   |   |              |   |   |           |   |   |              |  
|PER
      SHARE                               |   | 48,206,454                      |   |   | 4,901,758    |   |   | 4,650,000 |   |   |              |  

* In the year ended December 31, 2007
  - includes $110 share-based compensation. 
  ** Representing an amount less than $0.01

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

F-6

---

GLOBALENERGYINC.(A development stage company) 
  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)

|                                     |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   | Deficit     |   |   | Deficit     |   |   |        |  
|------------------------------------ | ------------------- |  | - | ------------------ |  | - | ---------- |  | - | ------------ |  | - | ------------- | - | - | ------------- | - | - | ----------- | - | - | ----------- | - | - | ------ | -
|                                     |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   | accumulated |   |   | accumulated |   |   |        |  
|                                     |                     |  |   |                    |  |   | Additional |  |   |              |  |   | Share         |   |   | Receivables   |   |   | during the  |   |   | before the  |   |   |        |  
|                                     | Share
      capital |  |   | paid-in            |  |   |            |  |   | Subscription |  |   | in respect of |   |   | development   |   |   | development |   |   |             |  
|                                     | Number              |  |   | Amount             |  |   | capital    |  |   | Warrants     |  |   | received      |   |   | shares issued |   |   | stage       |   |   | stage       |   |   | Total  |  
|                                     |                     |  |   | In
      thousands | 
|                                     |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|                                     |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|BALANCE AT JANUARY 1, 2005           | 4,650,000           |  | $ | 5                  |  | $ | 105        |  |   |              |  |   |               |   |   |               |   |   |             |   | $ | (109        | ) | $ | 1      |  
|CHANGES DURING THE YEAR,             |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|ENDED
      DECEMBER 31, 2005        |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|Net income (loss) for the
      year |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   | $ | (30         | ) |   | 36          |   |   | 6      |  
|BALANCE AT DECEMBER 31,              |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|2005                                 | 4,650,000           |  |   | 5                  |  |   | 105        |  |   |              |  |   |               |   |   |               |   |   | (30         | ) |   | (73         | ) |   | 7      |  
|CHANGES DURING THE YEAR,             |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|ENDED DECEMBER 31, 2006              |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|Issuance
      of shares             | 1,331,764           |  |   | 1                  |  |   | 12         |  |   |              |  | $ | 4             |   |   |               |   |   |             |   |   |             |   |   | 17     |  
|Net loss for the year                |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   | (69         | ) |   |             |   |   | (69    | )
|BALANCE AT DECEMBER 31,              |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|31, 2006                             | 5,981,764           |  |   | 6                  |  |   | 117        |  |   |              |  |   | 4             |   |   |               |   |   | (99         | ) |   | (73         | ) |   | (45    | )
|CHANGES DURING THE YEAR              |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|ENDED DECEMBER 31,                   |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|2007:                                |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|net of                               |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|Issuance
      of warrants           |                     |  |   |                    |  |   |            |  | $ | 246          |  |   |               |   |   |               |   |   |             |   |   |             |   |   | 246    |  
|Issuance of shares                   | 57,206,000          |  |   | 57                 |  |   | 515        |  |   |              |  |   | (4            | ) |   | (150          | ) |   |             |   |   |             |   |   | 418    |  
|Net loss
      for the year          |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   | (1,665      | ) |   |             |   |   | (1,665 | )
|Share based compensation             |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|expenses                             |                     |  |   |                    |  |   | 110        |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   | 110    |  
|BALANCE AT DECEMBER 31,              |                     |  |   |                    |  |   |            |  |   |              |  |   |               |   |   |               |   |   |             |   |   |             |   |   |        |  
|2007                                 | 63,187,764          |  | $ | 63                 |  | $ | 742        |  | $ | 246          |  | $ | -             |   | $ | (150          | ) | $ | (1,764      | ) | $ | (73         | ) | $ | (936   | )

Theaccompanyingnotes are anintegralpart of theconsolidatedfinancialstatements.

F-7

---

GLOBAL ENERGY INC.(A development stage company) 
  CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                              |   |                              |   |   |              |   |   |      |   |   | Cumulative   |  
|------------------------------------------------------------- | - | ---------------------------- | - | - | ------------ | - | - | ---- | - | - | ------------ | -
|                                                              |   |                              |   |   |              |   |   |      |   |   | from July 7, |  
|                                                              |   |                              |   |   |              |   |   |      |   |   | 2005 through |  
|                                                              |   | Year
      ended December 31 |   |   | December 31, |  
|                                                              |   | 2007                         |   |   | 2006         |   |   | 2005 |   |   | 2007         |  
|                                                              |   | In
      thousands           |  
|                                                              |   |                              |   |   |              |   |   |      |   |   |              |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                         |   |                              |   |   |              |   |   |      |   |   |              |  
|Net income (loss) for the period                              | $ | (1,665                       | ) | $ | (69          | ) | $ | 6    |   | $ | (1,764       | )
|Adjustments required to reconcile net
      income (loss)     |   |                              |   |   |              |   |   |      |   |   |              |  
|to net cash used in operating
      activities:               |   |                              |   |   |              |   |   |      |   |   |              |  
|Depreciation                                                  |   | 2                            |   |   |              |   |   | 1    |   |   | 2            |  
|Capital gain of disposal of property and equipment            |   |                              |   |   |              |   |   | (38  | ) |   |              |  
|Share based
      compensation expenses                       |   | 110                          |   |   |              |   |   |      |   |   | 110          |  
|Expenses in respect of the convertibles debentures            |   | 74                           |   |   |              |   |   |      |   |   | 74           |  
|Decrease (Increase)
      in other accounts receivable        |   | (187                         | ) |   |              |   |   | 16   |   |   | (187         | )
|Increase in balance with minority shareholder                 |   | (2                           | ) |   |              |   |   |      |   |   | (2           | )
|Increase in
      accounts payables                           |   | 173                          |   |   |              |   |   |      |   |   | 173          |  
|Increase (decrease) in other accounts payable-other           |   | 317                          |   |   | (8           | ) |   | (12  | ) |   | 296          |  
|                                                              |   |                              |   |   |              |   |   |      |   |   |              |  
|Net cash provided by (used
      in) operating activities     |   | (1,178                       | ) |   | (77          | ) |   | (27  | ) |   | (1,298       | )
|                                                              |   |                              |   |   |              |   |   |      |   |   |              |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                         |   |                              |   |   |              |   |   |      |   |   |              |  
|Net proceeds from sale of petroleum and
      natural         |   |                              |   |   |              |   |   | 50   |   |   |              |  
|gas resource properties                                       |   |                              |   |   |              |   |   |      |   |   |              |  
|Lease deposits                                                |   | (18                          | ) |   |              |   |   |      |   |   | (18          | )
|Payment for purchasing
      of property and equipment        |   | (525                         | ) |   |              |   |   |      |   |   | (525         | )
|Net cash used in investing activities                         |   | (543                         | ) |   |              |   |   | 50   |   |   | (543         | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                         |   |                              |   |   |              |   |   |      |   |   |              |  
|Issuance of shares                                            |   | 390                          |   |   | 17           |   |   |      |   |   | 407          |  
|Proceeds from debt issuance                                   |   |                              |   |   | 46           |   |   |      |   |   | 46           |  
|Proceeds from issuance of convertible
      debentures and    |   |                              |   |   |              |   |   |      |   |   |              |  
|warrants net of issuance expenses                             |   | 2,790                        |   |   |              |   |   |      |   |   | 2,790        |  
|Net cash provided by financing activities                     |   | 3,180                        |   |   | 63           |   |   |      |   |   | 3,243        |  
|INCREASE (DECREASE) IN CASH AND CASH                          |   |                              |   |   |              |   |   |      |   |   |              |  
|EQUIVALENTS                                                   |   | 1,459                        |   |   | (14          | ) |   | 23   |   |   | 1,402        |  
|CASH AND CASH EQUIVALENTS AT                                  |   |                              |   |   |              |   |   |      |   |   |              |  
|BEGINNING OF PERIOD                                           |   | 11                           |   |   | 25           |   |   | 2    |   |   | 68           |  
|CASH AND CASH EQUIVALENTS AT END OF                           |   |                              |   |   |              |   |   |      |   |   |              |  
|PERIOD                                                        |   | 1,470                        |   | $ | 11           |   | $ | 25   |   | $ | 1,470        |  
|                                                              |   |                              |   |   |              |   |   |      |   |   |              |  
|NON-CASH TRANSACTION -                                        |   |                              |   |   |              |   |   |      |   |   |              |  
|Conversion of promissory
      note into shares, see note 10a | $ | 28                           |   |   |              |   |   |      |   |   |              |  

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

F-8

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:

| | a. | General                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Global Energy Inc. ("the Company") was incorporated
        under the laws of the State of Nevada on February 16, 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In July 6, 2005, the Company completed the sale all
        of its oil and gas assets for the sum of $50,000. The sale of these oil
        and gas assets was completed on July 6, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Subsequent to the disposal of the Companys principal
        operation  petroleum and natural gas resource properties, the Company
        is considered as a development stage enterprise since July 7, 2005, as
        defined by Statement of Financial Accounting Standards (SFAS)
        No. 7 - Accounting and Reporting by Development Stage Enterprise.
        The accompanying financial statements have disclosed cumulative amounts
        in the statements of operations and cash flows since July 7, 2005, inception
        of becoming a development stage company, until December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | During May 2007 the Company established two subsidiaries
        in Israel: Global Fuel Israel Ltd (Fuel) a fully owned and
        Global N.R.G. Pacific Ltd. (Pacific) which the Company own
        50.1%. On October, 2007, Pacific established a subsidiary in Ethiopia
        named Global Energy Ethiopia PLC (Global Ethiopia). Pacific
        and its consolidated company are acting as the agriculture arm of the
        Company's activities in the Bio Diesel field.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | In May 2, 2007 the Company entered into an agreement
        with AlphaKat GmbH (AlphaKat) in order to cooperate in commercialization
        of AlphaKat's technology of producing mineral diesel oil from municipal
        waste using machines which converts hydrocarbon waste into diesel oil
        invented for that purpose by AlphaKat ("KDV machines"). As to commitments
        of the Company to Alphakat, see note 9b. In July 10, 2007 the Company
        entered into an agreement with AlphaKat to incorporate and operate a company,
        named AlphaKat - Global Energy GmbH (AGEI). Each party holds
        50% of the shares of AGEI. AGEI is to provide worldwide marketing and
        sales of KDV machines in consideration of 10% sale commission. The Company
        is responsible to finance AGEI, if such financing will be required AlphaKat
        has the right to object to any sale of KDV machines. The Company has consolidated
        AGEI in accordance with FIN 46R "Consolidation of Variable Interest Entities,
        an interpretation of ARB no. 51". See d, below. After the balance sheet
        date AGEI entered into its first agreement, see note 13a.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b. | Functional Currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The currency of the primary economic environment in
        which the operations of the Company are conducted is the U.S dollar ($
        or dollar).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | Most of the Companys expenses are incurred in
        dollars. A significant part of the Companys external financing is
        in dollars. The Company holds most of its cash and cash equivalents in
        dollars. Thus, the functional currency of the Company is the dollar.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-9

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

| |        | Since the dollar is the primary currency in the economic
        environment in which the Company operates, monetary accounts maintained
        in currencies other than the dollar are remeasured using the representative
        foreign exchange rate at the balance sheet date. Operational accounts
        and nonmonetary balance sheet account are measured and recorded at the
        rate in effect at the date of transaction. The effects of foreign currency
        remeasurement are reported in current operations (as financial EX-
        net) and have not been material to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | c.     | Going concern considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | As of December 31, 2007, the Company had negative working
        capital of $1,479 thousands and an accumulated deficit of approximately
        $1,837 thousands. The Company's ability to continue to operate as a going
        concern is dependent on its ability to generate sufficient cash flows
        to meet its obligations on a timely basis, to obtain additional financing
        and to ultimately attain profitability. The Company has no revenues and
        has incurred losses and an accumulated deficit resulting from the Companys
        activity as a development stage company and has a negative cash flow from
        operating activities. In the event the Company is unable to successfully
        raise capital and generate revenues, it is unlikely that the Company will
        have sufficient cash flows and liquidity to finance its business operations
        as currently contemplated. There can be no assurance that additional funds
        will be available on terms acceptable to the Company, or at all. These
        conditions raise substantial doubt about the Company's ability to continue
        to operate as a going concern. The accompanying financial statements do
        not include any adjustments to reflect the possible future effect on the
        recoverability and classification of assets or the amounts and classification
        of liabilities that may result from the outcome of this uncertainty.
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | **d.** | Principles of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | The consolidated financial statements include the accounts
        of the Company and its subsidiaries mentioned above, and the accounts
        of the 50% owned entity (AGEI) which according to FIN 46R is a variable
        interest entity and the Company is the primary beneficiary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | Intercompany balances and transactions have been eliminated
        upon consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | **e.** | Cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | Cash equivalents are short-term highly liquid investments
        which include short term bank deposit (up to three months from date of
        deposit), that are not restricted as to withdrawals or use that are readily
        convertible to cash with maturities of three months or less as of the
        date acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | **f.** | Property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | Property and equipment are stated at cost, less accumulated
        depreciation. Assets are depreciated using the straight-line method over
        their estimated useful lives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |        | The annual depreciation set as follows: leasehold improvements
        are amortized over the term of the lease which is shorter than the estimated
        useful life of the improvements. Computers, software and electronic equipment
        are depreciated over three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-10

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

| | g. | Impairment of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | The Company's long-lived assets are reviewed for impairment
        in accordance with Statement of Financial Accounting Standard No. 144,
        "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
        No. 144") whenever events or changes in circumstances indicate that the
        carrying amount of an asset may not be recoverable. Recoverability of
        assets to be held and used is measured by a comparison of the carrying
        amount of the assets to the future undiscounted cash flows expected to
        be generated by the assets. If such assets are considered to be impaired,
        the impairment to be recognized is measured by the amount by which the
        carrying amount of the assets exceeds their fair value. During the years
        ended December 31, 2007, 2006 and 2005, no impairment losses have been
        identified.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | h. | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | The preparation of financial statements in conformity
        with accounting principles generally accepted in the United States requires
        management to make estimates and assumptions that affect the reported
        amounts of assets and liabilities and disclosure of contingent assets
        and liabilities at the date of the financial statements and the reported
        amounts of income and expenses during the reporting period. Actual results
        could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                       

| | i. | Derivative financial instruments (derivatives)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company has adopted FAS 133, as amended, which establishes
        accounting and reporting standards for derivatives, including certain
        derivatives embedded in other contracts, and for hedging activities. Under
        FAS 133, all derivatives are recognized on the balance sheet at their
        fair value. On the date that the Company enters into a derivative contract,
        it designates the derivative, for accounting purposes, as: (1) hedging
        instrument, or (2) non-hedging instrument. Any changes in fair value are
        to be reflected as current gains or losses or other comprehensive gains
        or losses, depending upon whether the derivative is designated as a hedge
        and what type of hedging relationship exists. Changes in fair value of
        non-hedging instruments are carried to financial expenses-net
        on a current basis. To date, the Company did not have any contracts that
        qualify for hedge accounting under FAS 133.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company entered into convertible debentures agreement
        in which a derivative instrument is embedded. Embedded derivative
        is separated from the host contract and carried at fair value when (1)
        the embedded derivative possesses economic characteristics that are not
        clearly and closely related to the economic characteristics of the host
        contract and (2) a separate, stand-alone instrument with the same terms
        would qualify as a derivative instrument.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | As to embedded derivatives arising from the issuance
        of convertible debentures, see note 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-11

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

| | j. | Share-based payment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | The Company implements Statement of Financial Accounting
        Standards No. 123 (revised 2004) Share-based Payment (FAS
        123(R)). FAS 123(R) requires awards classified as equity awards
        be accounted for using the grant-date fair value method. The fair value
        of share-based payment transactions is recognized as expense over the
        requisite service period, net of estimated forfeitures. The Company recognizes
        compensation cost for an award with only service conditions that has a
        graded vesting schedule using the accelerated method based on multiple
        options awarded approach.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | The Company accounts for equity instruments issued to
        third party service providers (non- employees) in accordance with the
        fair value based on an option-pricing model, pursuant to the guidance
        in EITF 96-18 Accounting for Equity Instruments That Are Issued
        to Other Than Employees for Acquiring, or in Conjunction with Selling
        Goods or Services. The fair value of the options granted is revalued
        over the related service periods and recognized over the vesting period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | k. | Income loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Net income (loss) per share, basic and diluted, is computed
        on the basis of the net income (loss) for the period divided by the weighted
        average number of shares of common shares outstanding during the period.
        Diluted net loss per share is based upon the weighted average number of
        shares of common shares and of common shares equivalents outstanding when
        dilutive. Common shares equivalents include: (i) outstanding stock options
        under the Companys Long-Term Incentive Plan and warrants which are
        included under the treasury share method when dilutive, and (ii) Common
        shares to be issued under the assumed conversion of the Companys
        outstanding convertible Debentures, which are included under the if-converted
        method when dilutive. The computation of diluted net loss per share for
        the years ended December 31, 2007, 2006, and 2005 does not include common
        share equivalents, since such inclusion would be antidilutive. Disclosures
        required by SFAS 128, Earnings per Share, have been included in Note 11.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | l. | Deferred income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Deferred taxes are determined utilizing the asset and
        liability method based on the estimated future tax effects of differences
        between the financial accounting and tax basis of asset and liabilities
        under the applicable tax laws. Deferred tax balances are computed using
        the tax rates expected to be in effect when these differences are reversed.
        A full valuation allowances is provided for, since based upon the weight
        of available evidence, it is more likely than not that all of the deferred
        tax assets will not be realized. See note 10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-12

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

| | m. | Uncertainty in income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | As of January 1, 2007, the Company adopted
        FASB Interpretation No. 48, Accounting for Uncertainty in
        Income Taxes - an Interpretation of FASB Statement No. 109
        (FIN 48). FIN 48 specifies how tax benefits for
        uncertain tax positions are to be recognized, measured and derecognized
        in financial statements; requires certain disclosures of uncertain tax
        positions; specifies how reserves for uncertain tax positions should be
        classified on the balance sheet; and provides transition and interim-period
        guidance, among other provisions. On May 2, 2007, the FASB issued FASB
        Staff Position No. FIN 48-1, Definition of Settlement in FASB
        Interpretation No. 48-1 (FSP FIN 48-1).
        FSP FIN 48-1 provides guidance regarding how an entity should determine
        whether a tax position is effectively settled for the purpose of recognizing
        previously unrecognized tax benefits. The Company adopted FSP FIN 48-1
        as of January 1, 2007. The adoption of FIN 48 did not result in any adjustment
        to the Companys financial statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | n. | Comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The Company has no component of comprehensive
        income (loss) other than net income (loss).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | o. | Newly issued accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | 1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-13

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

| | 2) | In December 2007, the FASB issued FAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements - an amendment of Accounting
        Research Bulletin No. 51 (FAS No. 160). FAS No. 160
        establish accounting and reporting standards for non-controlling interests
        in a subsidiary and deconsolidation of a subsidiary. Early adoption is
        not permitted. As applicable to the Company, these statements will be
        effective as of the year beginning January 1, 2009. The Company is currently
        evaluating the potential impact, if any, the adoption of FAS No. 160 would
        have on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 3) | In September 2006, the FASB issued Statement of Financial
        Accounting Standards No. 157, Fair Value Measurements (SFAS
        157). SFAS 157 defines fair value, establishes a framework and gives
        guidance regarding the methods used for measuring fair value, and expands
        disclosures about fair value measurements. SFAS 157 is effective for financial
        statements issued for fiscal years beginning after November 15, 2007,
        and interim periods within those fiscal years (January 1, 2008, for the
        Company). The Company is currently assessing the impact that SFAS 157
        may have on its results of operations and financial position.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 4) | In February 2007, the FASB issued Statement of Financial
        Accounting Standards No. 159, The Fair Value Option for Financial
        Assets and Financial Liabilities Including an amendment of FASB
        Statement No. 115 (SFAS 159). SFAS 159 is expected to
        expand the use of fair value accounting but does not affect existing standards
        which require certain assets or liabilities to be carried at fair value.
        The objective of SFAS 159 is to improve financial reporting by providing
        companies with the opportunity to mitigate volatility in reported earnings
        caused by measuring related assets and liabilities differently without
        having to apply complex hedge accounting provisions. Under SFAS 159, a
        company may choose, at its initial application or at other specified election
        dates, to measure eligible items at fair value and report unrealized gains
        and losses on items for which the fair value option has been elected in
        earnings at each subsequent reporting date. SFAS 159 is effective for
        financial statements issued for fiscal years beginning after November
        15, 2007, and interim periods within those fiscal years (January 1, 2008,
        for the Company). If the Company is to elect the fair value option for
        its existing assets and liabilities, the effect as of the adoption date,
        shall be reported as a cumulative-effect adjustment to the opening balance
        of retained earnings. The Company is currently assessing the impact that
        SFAS 159 may have on its financial position.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | 5) | In December 2007, the FASB ratified EITF Issue No. 07-01,
        "Accounting for Collaborative Arrangements" ("EITF 07-01"). EITF 07-01
        defines collaborative arrangements and establishes reporting requirements
        for transactions between participants in a collaborative arrangement and
        between participants in the arrangement and third parties. EITF 07-01
        also establishes the appropriate income statement presentation and classification
        for joint operating activities and payments between participants, as well
        as the sufficiency of the disclosures related to these arrangements. EITF
        07-01 is effective for fiscal years beginning after December 15, 2008
        (January 1,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-14

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES(continued):

2009, for the Company). EITF 07-01 shall
  be applied using modified version of retrospective transition for those arrangements
  in place at the effective date. An entity should report the effects of applying
  this Issue as a change in accounting principle through retrospective application
  to all prior periods presented for all arrangements existing as of the effective
  date, unless it is impracticable to apply the effects the change retrospectively.
  The Company is currently assessing the impact that EITF 07-01 may have on its
  results of operations and financial position.

NOTE 2 - OTHER ACCOUNTS RECEIVABLE:

December 31,2007In thousandsOther receivable
      $
      120Governmental Institutions
      
      21Prepaid expenses
      
      46$
      187


NOTE 3 - PROPERTY AND EQUIPMENT:

December 31,2007In thousandsCost:Advances on account ofacquisition of Machinery
      $
      488Computer software and electronic
        equipment
      
      24Leasehold improvements
      
      13525Less, accumulated depreciation and amortization
      
      2$
      523


NOTE 4 - ACCOUNTS PAYABLE - OTHER:

December 31,2007In thousandsAccrued expenses
      $
      234Employees and payroll accruals
      
      80Government authorities
      
      3$
      317


F-15

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 5 - ADVANCE TO MINORITY SHAREHOLDER

In July 10, 2007 the Company entered
  into an agreement with AlphaKat to incorporate and operate AGEI see note 1a.
  According to the agreement the Company has provided a loan to the shareholders
  of the AlphaKat. The terms of the loan has not yet been set.

NOTE 6 - DEMAND LOAN PAYABLE - RELATED PARTIES

The Company borrowed $18,000 from four
  shareholders of the Company on May 4, 2006. The loans are unsecured, non-interest
  bearing and due on demand.

NOTE 7 - FINANCIAL EXPENSE (INCOME)

December 31,2007In thousandsInterest on convertible debentures (see note
        8)
      $
      160Income from evaluating the conversion optionfair value of the (see note
        8)
      
      (86
      )Other
      
      2$
      76


F-16

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 8 - CONVERTIBLE DEBENTURES AND WARRANTS

In July 2007, the Company entered into
  an agreement to issue in four different installments, as set in the agreement,
  $4 million aggregate principal amount of convertible debentures (Debentures)
  in a private placement. As of December 31, 2007 three installments in the sum
  of $3 million principal were issued for consideration of $2.8 million. The last
  installment is due after a registration statement for the underlying shares
  is declared effective by the SEC. The Debentures bear interest at 10% per annum,
  the payments of the principals and interest will commence on July 31, 2008 and
  continuing on each successive month thereafter until October 2010. The Debentures
  are convertible, at the option of the holder at any time, into shares of the
  Companys Common Stock at a conversion price of $2.2 per share. The Company
  has the right to redeem a portion or all amounts outstanding prior to maturity
  date, provided that (1) the closing Bid price is less than the conversion price,
  (2) the underlying shares registration statement is effective and (3) no event
  of default has occurred.

If any event of default occurred, the
  full unpaid Principal amount of this Debenture, together with interest shall
  become at the investor's election, immediately due and payable in cash. In conjunction
  with this financing, the Company issued to the private investor 300,000 warrants
  to purchase 300,000 common shares of the Company, exercisable for five years
  at an exercise price of $2.35 and 300,000 warrants to purchase 300,000 common
  shares of the Company, exercisable for five years at an exercise price of $2.50.
  The conversion of the debentures and the exercise of the warrants are subject
  to further adjustments and condition as further set out in the Debenture Agreement.
  The conversion option included within each of the Companys convertible
  debenture does not meet all the conditions of EITF 00-19 Accounting for
  Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's
  Own Stock related to equity classification and therefore should be bifurcated
  from the debt host contract. In addition the put option and call option are
  considered as embedded derivatives that require bifurcation, therefore these
  instruments are evaluated each reporting period and the difference in fair value
  is recorded as financial income or expense, see note 7 above. The Company measured
  the fair value of the embedded derivatives features on the issuance date at
  approximately $1,032 thousands. The amount attributed to the warrants was $246
  thousands, the remaining $1,425 thousands was allocated to the debentures.

As of December 31, 2007, none of the
  warrants were exercised and none of the debentures were converted into share.

Following are the details of the convertible
  debentures:

December 31,2007In thousandsPrincipal
      $
      1,426Accrued interest
      
      160Conversion option
      
      1,032Put option
      
      *Call option
      
      *$
      2,618


* Representing an amount less than $1,000

The notes are secured by a pledge on
  all of the Company's assets.

F-17

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 - COMMITMENTS AND CONTINGENCIES:

| | a. | Fuel currently leases office in Tel Aviv, Israel, under
        operating lease agreement, which expire at 2009. The monthly rent is approximately
        $3,800.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | b. | Under the agreement signed with Alphakat with regard
        to commercialization of AlphaKat technology of producing mineral diesel
        oil from municipal waste the Company agreed to: 1) Provide financial support
        for the project, 2) Purchase three KDV 500 turbines for implementation
        in Poland, the United States and Israel, 3) Start a regulatory process,
        including filing of permit applications and 4) Monthly payments Euro €10,000
        to AlphaKat for consulting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | c. | On October 5, 2007, Global Ethiopia, entered into lease
        agreements with the Southern Nations Nationalities People's Regional State,
        Ethiopia, or SNRS, for a 50 year lease of 20,000 hectares of rural land
        located in the Gamo Gofa zone in the SNRS for the purpose of cultivating
        castor seeds and 15 hectares of land located in the Gamu Gofa zone, Kucha
        Woreda, in the SNRS for the purpose of operating an oil crushing plant
        through an existing facility on the property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The agreements are subject to, among other things, the
        following conditions: (i) Global Ethiopia must pay SNRS a rental fee of
        Birr 47 (approximately US$5) or Birr 78 (approximately US$8.50) per hectare
        per year, depending on whether the leased land is defined as second or
        first class land, respectively; (ii) Global Ethiopia must completely develop
        the 20,000 hectares leased to it within eight years of the execution date
        of the agreement, including planting and maintaining trees or other oil
        producing crops. If no development process is carried out within a period
        of four (4) years from the date of execution of the agreement, then the
        undeveloped land may be repossessed by SNRS by giving six (6) months advance
        written notice to abandon the land; (iii) Global Ethiopia must completely
        develop the 15 hectares leased to it within three years of the execution
        date of the agreement; (iv) Global Ethiopia must perform a survey on the
        20,000 hectares within 24 months of the execution date of the agreement;
        Global Ethiopia has also an option to lease additional farmland from the
        SNRS during the term of the lease agreement (up to an additional 100,000
        hectares of farmland) on the same terms as the lease agreement for the
        20,000 hectares; and Global Ethiopia is not required to make any rental
        payments on its 20,000 hectare lease agreement until the fourth year of
        the agreement. During the term of the lease agreements, SNRS may cancel
        the lease due to failure of Global Ethiopia to discharge its material
        obligations under the lease agreements, provided, however, that Global
        Ethiopia is given one year prior notice and fails to cure such failure
        within such one year period.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | As of December 31, 2007, none of the conditions were
        met.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | d. | In October 20, 2007 the Company entered into an agreement
        for consulting services with Trianon Partners ("Trianon") and as of October
        24, 2007 the Company entered into a Joint Development Agreement with Trianon.
        In consideration of the consulting services to be provided by Trianon,
        the Company agreed to pay Trianon a fixed fee of $250 thousands which
        is to be paid in $10,000 monthly installments once the Company determines
        to commence the construction of the plant with the balance to be paid
        upon mechanical completion of the plant. In the consideration of the Joint
        Development the Company agreed to grant an exclusive license to Trianon,
        throughout the states of Texas, New York and New Jersey to be formed with
        AlphaKat, to market systems that use a proprietary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-18

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 9 - COMMITMENTS AND CONTINGENCIES (continued):

biodiesel technology for the conversion
  of waste to biodiesel. The aforementioned agreement was terminated in the Company
  executed a business and development agreement with ("Renewable"), an affiliate
  of Trianon and of American Renewable Diesel, LLC ("American"), see also note
  13a.

NOTE 10 - SHARE CAPITAL:

| | a. | Common shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Common stock confers on its holders the right to receive
        notice to participate and vote in general meetings of the Company, the
        right to a share in the excess of assets upon liquidation of the Company,
        and the right to receive dividends, if declared.                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In October 24, 2006, the Company issued 1,331,764 common
        shares at a price per share of $0.01 for an aggregate consideration of
        $13,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | On February 7, 2007, the Company issued 17,031,000 common
        shares at a price per share of $0.01 for consideration of approximately
        $170 thousands.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | On April 30, 2007, the Company issued a total of 40,175,000
        common shares at a price per share of $0.01 for consideration of approximately
        $402 thousands of which approximately $47,000 was paid in cash, $28,000
        was paid by conversion of $28,000 promissory note and approximately $327
        thousands was paid via the issuance of non interest notes receivables
        having maturities up to one year. As at December 31, 2007, $150 thousands
        have not been yet collected.                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | As to the issuance of warrants, see note 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | b. | Stock option plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In 2007, the Company established the 2007 share option
        plan, which provides for the issuance of up to 8,500,000 of the Company's
        common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In April 2007 the Company granted 5,055,021 stock options
        exercisable for ten years at an exercise price of $0.01 per share, to
        the CEO, the options vest in four equal batched over a period of four
        years from the date of the option, provided that the CEO is still the
        Company's employee. No option was vested as to year end. The Company estimates
        the fair value of stock options granted using the Black-Scholes option-pricing
        model. The option-pricing model requires a number of assumptions, of which
        the most significant are, expected stock price volatility, and the expected
        option term.

F-19

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 10 - SHARE CAPITAL(continued):

Expected volatility was based on the
  average of similar companies in the market due to insufficient trade volume.
  The expected option term represents the contractual period of the stock options
  as defined in the option agreement. The Company has historically not paid dividends
  and has no foreseeable plans to issue dividends. Risk-free interest rates, which
  are based on quoted H15 report of the Federal Reserve Board.

The fair value of the Company's stock
  options granted to the CEO was estimated using the following weighted average
  assumptions:

Risk free interest
      4.63%Dividend yields
      0Volatility
      250%Expected term (in years)
      10


The fair value of the options granted
  to the CEO using the Black&scholes model is $0.01 per option.

In May 7, 2007 the Company granted 400,000
  warrants to a service provider for Investor Relations and Marketing Advisor
  services. 200,000 warrants are exercisable immediately at an exercise price
  of $0.01 per share. 200,000 additional options were intended to vest effective
  May 1, 2008, on a pro rata basis in the event the employment agreement terminated
  before May 1, 2008. The agreement with the service provider was terminated as
  of January 1, 2008, and as of the December 31, 2007, 350,000 warrants were vested
  and exercisable at an exercise price of $0.01 per share, the market value of
  the share we used in the calculation of the fair value as of the year end was
  $0.6. The fair value of the abovementioned warrants calculated amounted to $92,000.
  This fair value was estimated using the following weighted average assumptions:

Risk free interest
      3.34%Dividend yields
      0Volatility
      250%Expected term (in years)
      Less than a year


As of December 31, 2007 no options or
  warrants were exercised.

As of December31, 2007, there were $33
  thousands of total unrecognized compensation expenses related to unvested share
  based compensation arrangement granted under the plan.

As to options granted after balance
  sheet date, see note 13b.

F-20

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 11 - INCOME TAXES

In 2007 and 2006 the Company incurred
  net operating loss for tax purposes and recognized a full tax valuation against
  deferred taxes. Accordingly, no provision or benefit for income taxes has been
  recorded in the accompanying financial statements.

The tax effect of net operating loss
  carry forward as of December 31, 2007 and 2006 was as follows:

2007
      
      
      2006Deferred tax assets:Net operating loss carry-forward
      $
      484
      
      $
      60Valuation allowance
      
      (484
      )
      
      (60
      )$
      0
      
      $
      0


The Company is primarily subject to
  U.S. federal income tax. For all years presented effective income tax rate is
  zero. The difference between the Companys effective income tax rate and
  the statutory rate of 35% is attributable to an increase in the deferred tax
  valuation allowance.

The Companys policy is to recognize
  interest and penalties related to income tax matters in income tax expense.
  As of January 1 and December 31, 2007, the Company had no accruals for interest
  or penalties related to income tax matters.

As of December 31, 2007, the Company
  had available for tax purposes unused net operating loss carry-forwards of $1,412.
  $1,101 will expire in various years from 2019 to 2027.

NOTE 12 - NET LOSS PER SHARE DATA

The Companys basic net loss per
  share amounts has been computed by dividing net loss by the weighted average
  number of Common outstanding. In 2007, 2006, and 2005, the Company reported
  net losses; therefore, no common stock equivalents were included in the computation
  of diluted net loss per share since such inclusion would have been antidilutive.
  The calculations of basic and diluted net loss per share are as follows:

| |                                                     |   | December
      31 | 
| | --------------------------------------------------- | - | ----------------- | 
| |                                                     |   | 2007              | 
| | Net loss, in thousands (Numerator)                  | $ | 1,665             | 
| | Weighted-average shares, in thousands (Denominator) |   | 48,206            | 
| | Basic and diluted net loss per share                | $ | 0.03              | 

F-21

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12 - NET LOSS PER SHARE DATA(continued):

The shares issuable upon the exercise
  of options, and conversion of convertible debentures and warrants, which have
  been excluded from the diluted per share amounts because their effect would
  have been antidilutive, include the following:

December 31,2007Options:Weighted average number, in thousands
      
      3,370Weighted average exercise price
      $
      0.01Warrants:Weighted average number, in thousands
      
      542Weighted average exercise price
      $
      0.81Convertible Debt:Weighted average number, in thousands
      
      263Conversion price
      $
      2.2


NOTE 13 - SUBSEQUENT EVENTS:

| | a. | In February 6, 2008, The Company entered into a business
        and royalty agreement with Covanta Energy Corporation ("Covanta"), under
        which the Company granted to Covanta certain rights, both exclusive and
        non-exclusive, for the use, practice, and improvement of the KDV technology
        for the purpose of converting waste materials containing hydrocarbons
        into diesel oil in countries including the US, the UK, China and the Republic
        of Ireland. The Company has certain rights to pursue specified small scale
        projects using the technology. Covanta will have the option to invest
        in, as well as the Company retention of the right to invest 10% - 35%
        of the equity in projects initiated by Covanta. Covanta agreed to pay
        the Company a royalty equal to 10% of the gross revenues derived from
        the sale of diesel oil from each project for a period of 20 years from
        the date the applicable project achieves commercial operation. Under the
        agreement, Covanta shall also be responsible for financing 100% of the
        costs of erection of a demonstration plant, which it may disassemble and
        make available for pick up by us, at no cost to us, upon Covanta terminating
        its rights to the technology.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | On the same day, the Company entered into a license
        agreement with Covanta under which the Company granted it a right to sell
        systems based on the technology to governmental organizations subject
        to certain pre-conditions regarding the purchase of a minimum number of
        systems based on the technology. Covanta's rights under both the license
        agreement and the business and royalty agreement shall be non-exclusive
        until it has (i) issued a purchase order for a demonstration plant, and
        (ii) placed purchase orders for five additional systems. AlphaKat- Global
        Energy GmbH will receive a 10% commission from the sale of all systems,
        part of which shall be payable to American, subject to the business and
        development agreement described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | In February 6, 2008, the Company executed a business
        and development agreement with Renewable, an affiliate of Trianon and
        of American, under which both Renewable and the Company shall have the
        right to identify and develop certain projects to convert feedstock to
        diesel using the KDV technology in New York,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-22

---

GLOBAL ENERGY INC.(A development stage company) 
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 13 - SUBSEQUENT EVENTS(continued):

| |    | California and Texas, as well as Florida and
        New Jersey under certain conditions. If the Company identifies a project,
        Renewable shall be entitled to invest up to 25% of the total required
        equity. If Renewable identifies a project, the Company shall be entitled
        to invest up to 51% and Covanta will be entitled to invest up to 24% of
        the total required equity. In all projects, Renewable shall manage the
        projects and shall be entitled to development fees in the amount of $100
        thousands for each KDV500, up to a maximum total of $2,000, according
        the number of KDV 500 system included in the project.                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | In connection with the business and development
        agreement described above, AlphaKat-Global Energy GmbH executed a license
        agreement with Renewable granting certain exclusive rights to market and
        sell systems based on the technology in the territory of California, New
        York and Texas, as well as New Jersey and Florida, subject to the satisfaction
        of minimum sales requirements. The territory may be reduced and/or exclusive
        rights may become non-exclusive rights, depending on whether minimum sale
        requirements are satisfied. American is to receive a commission on all
        sales in the territory. Systems sold to Covanta shall be credited to American,
        regardless of whether such systems are for use inside or outside the territory.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | b. | In January 31, 2008 the Board of Directors
        approved the following options grants: 1,150,000 to three directors (350,000
        options each) pursuant to the Company director compensation plan, at an
        exercise price of US $2.2 per share, and 1,150,000 incentive options granted
        to executive officer pursuant to an employment agreement effective November
        1, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | c. | On March 20, 2008, the Company signed an amendment
        to the debentures agreement described in note 8. The Company agreed to
        amend certain sections of the agreement dated July 2007 as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

_____________________
  ____________________________________
  _____________________

F-23

---

Item 9.Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure

None.

Item 9A(T).Controls and Procedures

(a)      
Our management, including our chief executive officer and chief financial
officer, has evaluated the effectiveness of our disclosure controls and
procedures as of December 31, 2007. Based on such review, our chief executive
officer and chief financial officer have determined that in light of their
conclusion with respect to the effectiveness of our internal control over our
financial reporting as of such date, we didnt have in place effective controls
and procedures designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Securities Exchange Act of
1934, as amended, is accumulated and communicated to our management, including
our principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure, and is recorded, processed, summarized and reported, within the time
periods specified in the Commissions rules and forms.

(b)      
Our management, under the supervision of our chief executive officer and chief
financial officer, is responsible for establishing and maintaining adequate
internal control over our financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) of the Securities Exchange Act of 1934, as amended. The Companys
internal control over financial reporting is defined as a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. Internal control over financial
reporting includes policies and procedures that:

- pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect our transactions and asset dispositions;
- provide reasonable assurance that transactions are recorded as necessary to
  permit the preparation of our financial statements in accordance with
  generally accepted accounting principles, and that our receipts and
  expenditures are being made only in accordance with authorizations of our
  management and directors; and
- provide reasonable assurance regarding the prevention or timely detection
  of unauthorized acquisition, use or disposition of assets that could have a
  material effect on our financial statements.

Under
the supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we evaluated the
effectiveness of our internal control over financial reporting as of December
31, 2007 based on the framework for Internal Control-Integrated Framework set
forth by The Committee of Sponsoring Organizations of the Treadway Commission.
Due to the inherent limitations of our company, derived from our small size and
the small number of employees, management evaluation concluded that there is a
material weakness with respect to segregation of duties that may not provide
reasonable assurance regarding the reliability of internal control over
financial reporting and may not prevent or detect misstatements. In addition,
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.

Based
on this evaluation, our management concluded that there is no reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and that the Companys internal controls over
financial reporting were not effective as of December 31, 2007.

Subsequent
to December 31, 2007, management, including our principal executive officer and
principal financial officer, has started an extensive process in order to
strengthen our internal controls over financial reporting in order to reasonably
ensure that reliability of financial reporting and the preparation of financial
statements.

This
management report on internal control over financial reporting shall not be
deemed to be filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended or otherwise subject to the liabilities of that Section.

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 Commission that permit us to
provide only managements report in this Annual report.

(c)      
There were no changes in our internal controls over financial reporting
identified with the evaluation thereof that occurred during the quarter ended
December 31, 2007 that have materially affected, or are reasonable likely to
materially affect our internal control over financial reporting.

Item 9B.Other Information

None.

20

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PART III

Item 10.Directors, Executive Officers and
Corporate Governance

Executive Officers and Directors

The following table sets forth information regarding our
directors, executive officers and key employees, including their ages as of
March 14, 2008.

|Name                             | Age | Position                                                                      
|-------------------------------- | --- | ------------------------------------------------------------------------------
|Directors and Executive Officers |     |                                                                               
|Asi Shalgi                       | 54  | President, Chief Executive Officer,
      Secretary and Director              
|Alex Werber                      | 52  | Treasurer and Chief Financial Officer                                         
|Yair Aloni (1)                   | 58  | Director                                                                      
|Josef Neuhaus (2)                | 44  | Director                                                                      
|Avner Raanan (3)                 | 57  | Director                                                                      
|                                 |     |                                                                               
|Key Employees                    |     |                                                                               
|Yossi Raz                        | 60  | Vice President for Project Development and Chief
      Technology Officer     
|Yanai Man                        | 49  | Chief Executive Officer of Global
      NRG Pacific and Global Energy Ethiopia

|(1) | Chairman of the Compensation Committee                                        
|--- | ------------------------------------------------------------------------------
|(2) | Chairman of the Audit Committee and member of the
      Compensation Committee
|(3) | Member of the Audit Committee and the Compensation
      Committee            

Asi
Shalgi. Mr. Shalgi has served as our President, Chief Executive Officer and
director since April, 2007. He has more than 20 years of experience and
involvement in the private and public sector. He has served as general manager
and director for industrial and agriculture companies with significant export
activities. He was the director general of the Israeli Ministry of Energy and
Infrastructure. During his term with the Ministry he was involved in the peace
treaty negotiations with Jordan on the energy annex. He was responsible for new
legislation regarding electricity in Israel that allowed the involvement of
Independent Power Producers and the implementation of the Public Utility
Authority that regulates the energy sector and prices in Israel. He has been
involved in the power and water sector mainly in developing and financing IPP
projects. This has included developing, financing, building and operating the
first private power plant in Israel, and the first private water desalination
plant in Israel. He served in the IDF and retired as a Lieutenant Colonel. Mr.
Shalgi received an Engineering degree for industrial and management from the Tel
Aviv University.

Alex
Werber. Mr. Werber has served as our Treasurer and Chief Financial Officer
since May, 2007. He is a certified public accountant with over 15 years of
financial management experience in privately held and publicly traded companies.
He has served as controller and chief financial officer for several public
companies since 1983. During the past decade he specialized in the hi-tech
sector, serving in managerial positions including controller, VP Finance and
chief financial officer. He received a B.A. in Economics and Accounting from Tel
Aviv University, where he completed post-graduate studies in Accounting.

Yair
Aloni.Mr. Aloni has served as our director since November, 2007. He
worked with an international trading and consulting company that provides
marketing and sales services along with business consulting services. He has
also served on the board of directors of a publicly listed biopharmaceutical
company. Mr. Aloni attended the business management school at Tel Aviv
University.

Josef
(Jos) Neuhaus.Mr. Neuhaus has served as our director since December,
2007. He has been an independent consultant since 2004. Mr. Neuhaus currently
serves on the board of Gammacan International, Inc. (OTCBB: GCAN). From August,
2006 to February, 2007, Mr. Neuhaus served as Chief Financial Officer, Treasurer
and Secretary of Advanced Technology Acquisition Corp. (Amex: AXC). Prior that,
between August, 2005 and February, 2006, Mr. Neuhaus served as the Chief
Financial Officer of Axis Mobile Ltd. (LSE: AXIS.L). From March, 2003 to
November, 2003, he served as CEO of RoadEye FLR G.P., and Managing Director of
Gintec Active Safety Ltd., both private companies dealing with collision
avoidance systems. Mr. Neuhaus received both his M.B.A. and B.A. in Accounting
and Economics from Tel Aviv University. He is an Israeli CPA.

Avner
Raanan. Mr. Raanan has served as our director since December, 2007. He has
vast technical and managerial experience in venture capital investments,
business consulting, managing multi-million dollar projects, developing airborne
electronic warfare systems and air to air missiles. Mr. Raanan founded Avnan
Enterprises Ltd., an investment company that invests in early stage start up
companies. Mr. Raanan is currently a Ph.D. candidate at Bar-Ilan University,
Israel. He received an M.Sc. in Business Administration and a B.Sc. in
Electronic and Computer Engineering from Ben-Gurion University in Israel.

21

---

Yossi
Raz. Mr. Raz has served as our Vice President for Project Development and
Chief Technology Officer since November, 2007. Prior to that, Mr. Raz served as
a consultant for project development for the company. He has 37 years of
experience in the private and public sector in Israel and internationally. He
has served as managing director and deputy managing director for organizations
in the heavy chemical and petrochemical industries as well as in the high-tech,
energy, mining and infrastructure sectors. He was involved as a project manager
in many multi million dollar turnkey projects around the world, utilizing
innovative technologies and inventions. During his 37 years of experience, Mr.
Raz performed engineering, procurement, construction and commissioning,
marketing, business development and projects in countries such as the U.S.A,
Costa Rica, Chile, Brazil, South Africa, Ivory Coast, Yugoslavia and Montenegro,
Italy, Great Britain, China, Thailand, Poland, the Czech Republic, Turkey and
Russia. He has experience in developing and producing business plans,
techno-economical evaluations and other bankable documents. Mr. Raz is fluent in
English, Hebrew and some German. He served in the Israeli army as chief
electrician to the Naval Fleet, and retired at the rank of Major. Mr. Raz
graduated as a Mechanical and Electrical Engineer from the Technion - Institute
of Technology and received an M.B.A. in International Marketing at the
University of Pretoria, South Africa.

Yanai
Man. Mr. Man has served as Chief Executive Officer of Global NRG Pacific
Ltd. since June 6 2007 and Global Energy Ethiopia since October 1 2007. Prior to
that Mr. Man served from 2003-2005 as Chief Executive Officer of the Ocean Rock
Corporation, a factory, located in the Dominican Republic, which produces fine
jewelry (diamonds, platinum and gold), and is a subsidiary of Paul Winston
Jewelry Ltd. which is located in New York. From 1997 through 2003 he founded and
served as Chief Executive Officer of Phytech Technologies Ltd, during which time
he established three subsidiary companies that deal with high-tec, mid-tec and
turnkey projects. Prior to that he founded and served as Chief Executive Officer
or Manager of Pollinating Service Yad-Mordechai, Environment Acoustic  USA and
Apiary Yad Mordechai (Michvarot Yad Mordechai). He served in the IDF and retired
at the rank of Major.

Consultants

We
conduct, and intend to continue to conduct, some of our business through
agreements with consultants.

Section 16(a) Beneficial Ownership Compliance

Section
16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
requires our executive officers and directors and persons who own more than 10%
of a registered class of our equity securities to file with the Commission
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the Commission regulations to
furnish us with copies of all Section 16(a) reports they file.

Based
solely on our review of the copies of such forms received by us, or written
representations from certain reporting persons, we believe that all filing
requirements applicable to our officers, directors and greater than ten percent
beneficial owners were complied with, with the exception of the following:

Name
    Number of Late Insider
      Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File Requested
      FormsAlex Werber
    1
    1
    None


Committees of the Board

Our
company currently does not have a nominating committee nor does our company have
a written nominating committee charter. Our board of directors does not believe
that it is necessary to have such a committee because it believes that the
functions of such a committee can be adequately performed by the board of
directors.

Our
company does not have any defined policy or procedure requirements for
shareholders to submit recommendations or nominations for directors. The board
of directors believes that, given the early stages of our development, a
specific nominating policy would be premature and of little assistance until our
business operations develop to a more advanced level. Our company does not
currently have any specific or minimum criteria for the election of nominees to
the board of directors and we do not have any specific process or procedure for
evaluating such nominees. The board of directors assesses all candidates,
whether submitted by management or shareholders, and makes recommendations for
election or appointment.

A
shareholder who wishes to communicate with our board of directors may do so by
directing a written request addressed to our President at the address appearing
under "BusinessCorporate Overview".

Audit Committee

The
  audit committee is comprised of Josef Neuhaus (chairman) and Avner Raanan. The
  audit committee assists the board of directors in discharging its responsibility
  relating to the accounting, reporting and financial practices of the Company
  and its subsidiaries, and has general responsibility for oversight of internal
  controls, accounting and audit activities and the legal compliance of the Company
  and its subsidiaries. The audit committee operates under a charter adopted by
  the board of directors.

22

---

Compensation Committee

The
compensation committee is comprised of Yair Aloni (chairman), Josef Neuhaus and
Avner Raanan. The compensation committee assists the board of directors in
discharging its responsibilities relating to compensation of the Companys
directors and executives. The primary objective of the committee is to develop
and implement compensation policies and plans that are appropriate for the
Company in light of all relevant circumstances, its level of operations and
which provide incentives that further the Companys long-term strategic plans
and are consistent with the culture of the Company and the overall goal of
enhancing enduring shareholder value. The compensation committee operates under
a charter adopted by the board of directors.

Code of Ethics

We
have not yet adopted a corporate code of ethics. Given our current operations,
management does not believe a code of ethics is necessary at this stage of our
development.

Audit Committee Financial Expert

Our
board of directors determined that Mr. Josef Neuhaus qualifies as an "audit
committee financial expert" as defined by Item 407(d) of Regulation S-K. Mr.
Josef Neuhaus is an independent director as defined in NASDAQ Marketplace Rule
4200(a)(15).

Item 11.Executive Compensation

The
table set forth below summarizes the annual and long-term compensation for
services payable to our executive officers during the fiscal years ended
December 31, 2007 and 2006.

Summary Compensation

SUMMARY COMPENSATION
        TABLEName AndPrincipalPosition
      Year
      Salary($)
      Bonus($)
      StockAwards($)
      OptionAwards($)
      Non-Equity**Incentive
        Plan**Compensation($)
      **Nonqualified**Deferred**Compensation**Earnings($)
      All otherCompensation
      Total($)Asi Shalgi 
        President, CEO 
        and Director
      2007 
        2006
      115,259 (1)
        -
      Nil 
        -
      Nil 
        -
      17,552 (2)
        -
      Nil 
        -
      Nil 
        -
      Nil 
        -
      132,811 
        -Alex Werber 
        CFO(3)
      2007 
        2006
      30,000 
        -
      Nil 
        -
      Nil 
        -
      Nil 
        -
      Nil 
        -
      Nil 
        -
      Nil 
        -
      30,000 
        -Christopher Kape 
        Former President, 
        CEO, CFO, 
        Secretary and 
        Director (4)
      2007 
        2006
      63,195 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        $19,080 (5)
      63,195 
        19,080


|(1) | Including social benefits and reimbursement by our
      company of expenses paid by Asi Shalgi.                                                                                                                                                                                                                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Expenses related to the authorizing for issuance
      5,055,021 options to Asi Shalgi in accordance with US GAAP, which such
      options do not begin vesting until April 30, 2008.                                                                                                                                                                                                                                               
|(3) | Mr. Werber was appointed as our new Treasurer and Chief
      Financial Officer effective May 6, 2007.                                                                                                                                                                                                                                                                                                                               
|(4) | Elected as director and appointed President, Chief
      Executive Officer, Secretary and Treasurer on April 5, 2005. As of
      November 5, 2007, Christopher Kape resigned as secretary and from our
      Board of Directors. As of May 6, 2007 Christopher Kape resigned as our
      Treasurer and Chief Financial Officer. As of April 30, 2007, Christopher
      Kape resigned as our President and Chief Executive Officer.
|(5) | Charged by Jamco Capital Partners Inc., a private company
      owned by Christopher Kape, for office, secretarial and accounting
      services.                                                                                                                                                                                                                                                                                    

Effective
  May 6, 2007, we appointed Alex Werber as our new Treasurer and Chief Financial
  Officer and entered into an employment agreement, pursuant to which it was agreed
  Mr. Weber should be employed on a part-time basis and paid a monthly salary,
  payable immediately upon receipt of his invoice, at a gross monthly rate of
  US $2,500, to be paid in NIS translated pursuant to the official representative
  rate of exchange of the US$ as published by the Bank of Israel on the payment
  date. Under the employment agreement, Mr. Werber and the Company agreed to open
  and maintain a study fund. We agreed to contribute to the fund an amount equal
  to 7.5% of each monthly salary payment up to the maximum amount recognized for
  tax benefits pursuant to the Income Tax Ordinance, and Mr. Werber agreed to
  contribute to the fund an amount equal to 2.5% of each monthly salary payment
  up to the maximum amount recognized for tax purposes pursuant to the Income
  Tax Ordinance. In addition, we agreed to provide Mr. Werber (including his heirs,
  executors and administrators) with coverage under a standard directors' and
  officers' liability insurance policy at our expense.

23

---

On
December 1, 2007, Mr. Werbers employment agreement was amended, pursuant to
which his salary was increased to a gross monthly salary of US $5,000. All other
terms of the employment agreement remain unchanged and in full force and
effect.

On
April 30, 2007, we appointed Asi Shalgi as our new President and Chief Executive
Officer and entered into an employment agreement. Under the terms of the
agreement, Asi Shalgi is being paid a monthly base salary of $10,000. In
addition, on April 30, 2007, we granted 5,055,021 stock options exercisable for
ten years at an exercise price of $0.01 per share to Asi Shalgi. Mr. Shalgi has
also been appointed to our board of directors (for more details regarding his
compensation as director see below, "Director Compensation Policy").

On
November 2, 2007, we elected Yehuda Eliraz and Yair Aloni to serve on our board
of directors. On November 20, 2007, Yehuda Eliraz resigned from our board of
directors. Our directors are entitled to compensation in accordance with our
director compensation policy (See "Director Compensation Policy").

Outstanding Equity Awards at Fiscal Year-End

OUTSTANDING EQUITY AWARDS AT
        FISCAL YEAR-ENDOPTION AWARDS
      STOCK AWARDSName
      Number of Securities
        Underlying Unexercised Options (#) Exercisable
      Number of Securities
        Underlying Unexercised Options (#) Unexercisable
      Equity Incentive Plan
        Awards: Number of Securities Underlying Unexercised Unearned Options
        (#)
      Option Exercise Price ($)
      Option
        Expiration Date
      Number of Shares
        or Units of Stock That Have
        Not Vested ($)
      Market
        Value of Shares or Units of
        Stock That Have Not Vested ($)
      Equity Incentive Plan
        Awards: Number of Unearned
        Shares, Units or Other Rights
        That Have Not Vested (#)
      Equity Incentive Plan
        Awards: Market or Payout Value
        of Unearned Shares, Units or Other Rights That Have Not Vested
        (#)Asi 
        Shalgi (1)
      Nil
      5,055,021
      Nil
      $0.01
      April 30, 2017
      Nil
      Nil
      Nil
      Nil


|(1) | Asi Shalgi was granted 5,055,021 stock options on April
      30, 2007 to vest at a rate of 25% per year beginning April 30, 2008.
      Effective January 31, 2008, the expiration date of the options was
      extended to April 30, 2017.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Director Compensation Policy

On
November 2, 2007, we adopted a director compensation policy for all the
directors pursuant to which (a) we authorized the issuance to each of our
directors 200,000 share options at an exercise price of $0.56 per share and (b)
we agreed to pay a fee of US$750 per meeting for each quarterly board meeting
attended and a fee of US$600 per month for all other meetings attended or
consented to in writing by the entire board of directors. On November 18, 2007,
the compensation policy was amended such that each director was authorized
350,000 at an exercise price of $2.20 per share, rather than 200,000 options at
an exercise price of $0.56 per share. On January 31, 2008, the director
compensation policy was further amended to provide for payment of $1,000 per
month to each director as compensation, rather than a fee of $750 per
meeting.

On
December 6, 2007, we appointed Josef Neuhaus and Avner Raanan to our board of
directors. On January 31, 2008, we issued to each of Josef Neuhaus, Yair Aloni
and Avner Raanan options to purchase 350,000 shares of our common stock at an
exercise price of $2.20 per share. The stock options were issued in accordance
with the terms of the 2007 share option plan to be exercisable until December 6,
2017.

DIRECTOR
        COMPENSATION(1)Name
      Fees Earned or Paid
        in Cash ($)
      Stock Awards ($)
      Option Awards
        ($)
      Non-Equity Incentive
        Plan Compensation ($)
      Non-Qualified Deferred
        Compensation Earnings ($)
      All Other Compensation
      Total ($)Asi Shalgi
      Nil
      Nil
      Nil (3)
      Nil
      Nil
      Nil
      Nil


24

---

DIRECTOR COMPENSATION(1)Name
      Fees Earned orPaid in
        Cash ($)
      StockAwards($)
      OptionAwards ($)
      Non-EquityIncentive PlanCompensation($)
      Non-QualifiedDeferredCompensationEarnings ($)
      All OtherCompensation
      Total($)Josef Neuhaus
      806 (2)
      Nil
      Nil (4)
      Nil
      Nil
      Nil
      NilAvner Raanan
      806 (2)
      Nil
      Nil (5)
      Nil
      Nil
      Nil
      NilYair Aloni
      1,933 (2)
      Nil
      Nil (6)
      Nil
      Nil
      Nil
      Nil


|(1) | For the fiscal year ended December 31, 2007.                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Amounts accrued, but unpaid, in the fiscal year ended
      December 31, 2007.                                                                                              
|(3) | 5,055,021 options were granted on April 30, 2007 but do
      not begin vesting until April 30, 2008. All 5,055,021 options were
      outstanding at fiscal year-end.      
|(4) | 350,000 options were granted on January 31, 2008 and do
      not begin vesting until December 6, 2008. These options were not
      outstanding at fiscal year-end.        
|(5) | 350,000 options were granted on January 31, 2008 and do
      not begin vesting until December 6, 2008. These 350,000 options were not
      outstanding at fiscal year-end.
|(6) | 350,000 options were granted on January 31, 2008 and do
      not begin vesting until December 6, 2008. These 350,000 options were not
      outstanding at fiscal year-end.

Equity Compensation Plan Information

Our
board of directors adopted an equity compensation plan, the 2007 Share Option
Plan, on May 15, 2007, under which a total of 8,500,000 shares of our common
stock have been authorized for issuance. The following summary information is
presented for stock options authorized for issuance on an aggregate basis as of
December 31, 2007.

Plan Category
      Number of Securities to beissued upon exercise ofoutstanding options,
      warrantsand rights.(a)
      Weighted average exerciseprice of outstanding options,warrants and rights.(b)
      Number of securitiesremaining available forfuture issuance underequity compensation plans(excluding securitiesreflected in column (a)(c)Equity compensation plans approved
      by security holders
    Not Applicable
    Not Applicable
    Not ApplicableEquity compensation plans not
      approved by security holders
    5,455,021(1)
    $0.01
    3,044,979(2)


|(1) | As of December 31, 2007, the following options have been
      issued and outstanding pursuant to an equity compensation plan: 5,055,021
      options granted to Asi Shalgi pursuant to an option agreement dated April
      30, 2007 and 400,000 options with an exercise price of $0.01 granted to
      Dr. Irit Arbel. In addition, options to purchase 2,200,000 shares of our
      common stock were authorized throughout 2007 and were granted on January
      31, 2008. These options were not outstanding at fiscal
year-end..
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Options remaining available for future issuance under the
      2007 share option plan, excluding securities reflected in column
    (a).                                                                                                                                                                                                                                                                                                                                                                                                   

The
share option plan is administered by either our board of directors or a
committee, consisting of such number of members (but no less than two (2)) as
may be determined by our board of directors, to which the board of directors
shall have delegated power to act on its behalf with respect to the share option
plan. The administrator of the share option plan has full power and authority to
select the individuals to whom awards will be granted, to make any combination
of awards to participants, to accelerate the exercisability or vesting of any
award, to provide substitute awards and to determine the specific terms and
conditions of each award, subject to the provisions of the share option plan,
our Articles of Association and any applicable law.

The
share option plan permits us to make grants of stock options to officers,
employees, directors, consultants and other key persons. Stock options granted
under the share option plan shall have an exercise price as determined by the
administrator of the share option plan.

In
the event of a merger or sale of all or substantially all assets or shares of
capital stock, the administrator at its sole discretion shall decide the
treatment of the options in the sale event.

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

The
following table provides certain information with respect to the beneficial
ownership of our common stock as of March 14, 2008 for:

25

---

|• | each beneficial owner of more than 5% of our outstanding
      common stock;
|- | ----------------------------------------------------------------------------
|  |                                                                             
|• | each of our executive officers;                                             
|  |                                                                             
|• | each of our directors; and                                                  
|  |                                                                             
|• | all of our executive officers and directors as a
      group.               

In
the following table, we have determined the number and percentage of shares
beneficially owned in accordance with Rule 13d-3 of the Exchange Act based on
information provided to us by our controlling shareholder, executive officers
and directors, and this information does not necessarily indicate beneficial
ownership for any other purpose. In determining the number of shares of our
common stock beneficially owned by a person and the percentage ownership of that
person, we include any shares as to which the person has sole or shared voting
power or investment power, as well as any shares subject to warrants or options
held by that person that are currently exercisable or exercisable within 60 days
after March 14, 2008. Applicable percentages are based on 63,187,764 shares of
common stock outstanding on March 14, 2008.

|5% Beneficial Owners, Directors and Executive Officers:(1)        |  | Shares Beneficially Owned | 
|----------------------------------------------------------------- |  | ------------------------- | 
|                                                                  |  | Number                    | 
|Asi Shalgi (3)                                                    |  | --                        | 
|                                                                  |  |                           | 
|Alex Werber                                                       |  | --                        | 
|Yair Aloni (4)                                                    |  | --                        | 
|                                                                  |  |                           | 
|Josef Neuhaus (5)                                                 |  | --                        | 
|                                                                  |  |                           | 
|Avner Raanan (6)                                                  |  | --                        | 
|                                                                  |  |                           | 
|Carrigain Investment Ltd. (7)                                     |  | 42,000,000                | 
|All executive officers and directors as a group
      (5 persons) |  | --                        | 

|(1) | Except as otherwise indicated, addresses are c/o Global
      Energy Inc., 415 Madison Avenue, 15th Floor, New York, NY 10017.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Based on 63,187,764 shares of our common stock issued and
      outstanding as of March 14, 2008. Beneficial ownership is determined in
      accordance with the rules of the Commission and generally includes voting
      or investment power with respect to securities. Except as otherwise
      indicated, we believe that the beneficial owners of shares of our common
      stock listed above, based on information furnished by such owners, have
      sole investment and voting power with respect to such shares, subject to
      community property laws where applicable.
|(3) | None of the 5,055,021 options held by Asi Shalgi are
      currently exercisable or exercisable within 60 days of March 14,
    2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(4) | None of the 350,000 options held by Yair Aloni are
      currently exercisable or exercisable within 60 days of March 14,
    2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(5) | None of the 350,000 options held by Josef Neuhaus are
      currently exercisable or exercisable within 60 days of March 14,
    2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(6) | None of the 350,000 options held by Avner Raanan are
      currently exercisable or exercisable within 60 days of March 14,
    2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(7) | Carrigain Investment Ltd. ("Carrigain") is controlled
      jointly by Ariel Malik and Zeev Bronfeld each holding 50% of Carrigain's
      common shares. Effectively, therefore, each of Mr. Malik and Mr. Bronfeld
      beneficially owns 33.25% of our shares. The address of Carrigain is
      Jasmine Court, Regent Street, Belize City, Belize.                                                                                                                                                                                                                                      

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

Transactions with Related Persons, Promoters and Certain
Control Persons

On
February 7, 2007, we issued 12,000,000 shares to our controlling shareholder,
Carrigain Investment Ltd., or Carrigain. At the time of issuance, this comprised
approximately 52.14% of our outstanding shares. We are informed that Carrigain
is controlled by Ariel Malik and Zeev Bronfeld. On April 11, 2007, Carrigain
entered into a subscription agreement with the company pursuant to which
Carrigain acquired 30,000,000 additional shares of our common stock for an
aggregate acquisition consideration of $300,000. Carrigain currently holds 66.5%
of our common stock based on 63,187,764 shares of our common stock outstanding
as of February 13, 2008.

During
the year ended December 31, 2007, we paid approximately $40,000 for accounting
and administrative services performed by a company controlled by our former
president. During the comparable period in 2006, no such fees were paid. As of
December 31, 2007, no amounts were due and payable in respect of such accounting
and administrative services.

During
year ended December 31, 2006, we borrowed $18,000 from four significant
shareholders of the company. The loans do not bear interest and are repayable
upon demand by the respective creditors. As of December 31, 2007, the loan is
still outstanding.

For
more information regarding director and executive compensation, see Management
 Executive Compensation.

Indebtedness of Directors and Executive Officers

None
of the directors or executive officers of our company or any associate or
affiliate of our company during the last two fiscal years, is or has been
indebted to our company by way of guarantee, support agreement, letter of credit
or other similar agreement or understanding currently outstanding.

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Director Independence

We
currently act with four directors, consisting of Asi Shalgi, Josef Neuhaus,
Avner Raanan and Yair Aloni. We have determined that Josef Neuhaus, Avner Raanan
and Yair Aloni are independent directors as defined in NASDAQ Marketplace Rule
4200(a)(15).

Item 14.Principal Accountant Fees and
Services

Pre-Approval Policy and Procedures

In
December 2007 we established an audit committee. Our board of directors approved
the engagement of our accountants and all other services provided to us
throughout fiscal year 2007, prior to the services being performed.

Accountant Fees

The
following table shows the aggregate fees for professional services rendered by
our accountants for the fiscal years ended December 31, 2007 and December 31,
2006.

|                   |   | Fiscal Year Ended |  
|------------------ | - | ----------------- | -
|                   |   | December 31,      |  
|                   |   | 2007              |  
|                   |   | (in thousands)    |  
|                   |   |                   |  
|Audit Fees         | $ | 129               | *
|Audit-Related Fees | $ | --                |  
|Tax Fees           | $ | --                |  
|All Other Fees     | $ | 8                 |  
|Total              | $ | 137               | *

* Audit fees and total fees billed for fiscal year 2007 were 48 and 56, respectively.

Audit Fees

Audit
fees for both years consist of fees for professional services associated with
the annual audit of our consolidated financial statements, review of the interim
consolidated financial statements and services that are normally provided by our
accountants in connection with statutory audits required in regulatory
filings.

Tax Fees

Tax
Fees consist of fees for professional services rendered for assistance with
federal and state tax compliance.

All Other Fees

Other
  fees for fiscal year ended December 31, 2007 includes booking services carried
  by Benny Gaon CPA.

PART IV

Item 15.Exhibits and Financial Statements

(a)
(1) Financial Statements:Reference is made to the Index to Financial
Statements and Financial Statement Schedule in the section entitled Financial
Statements and Supplementary Data in Item 8. of this Annual Report on Form
10-K.

(2)
Financial Statement Schedule:None

(3)
Exhibits:Exhibits are as set forth in the section entitled Exhibit
Index which follows the section entitled Signatures in this Annual Report on
Form 10-K. Exhibits which are incorporated herein by reference can be inspected
and copied at the public reference rooms maintained by the Commission in
Washington, D.C., New York, New York, and Chicago, Illinois. Please call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. Commission filings are also available to the public from commercial
document retrieval services and at the Web site maintained by the Commission at
http://www.sec.gov.

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

GLOBAL ENERGY INC.(Registrant)By:/s/ Asi Shalgi
    /s/ Alex WerberAsi Shalgi
    Alex WerberPresident, Chief Executive Officer
    Treasurer andand Director
    Chief Financial OfficerDate: March 31, 2008
    Date: March 31, 2008


KNOWN
ALL MEN BY THESE PRESENTS that each individual whose signature appears below
constitutes and appoints each of Asi Shalgi and Alex Werber such persons true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for such person and in such persons name, place and stead, in
any and all capacities, to sign any and all amendments to this Annual Report on
Form 10-K, and to file the same, with all exhibits thereto, and all documents in
connection therewith, with the Commission, granting unto each said
attorney-in-fact and agent full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that any said attorney-in-fact
and agent, or any substitute or substitutes of any of them, may lawfully do or
cause to be done by virtue hereof.

Pursuant
to the requirements of the Securities and Exchange Act of 1934, as amended, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

|Signature               | Title                                                     | Date          
|----------------------- | --------------------------------------------------------- | --------------
|                        |                                                           |               
|                        | President, Chief Executive Officer &
      Director       | March 31, 2008
|/s/Asi
      Shalgi     | (principal executive officer)                             |               
|Asi Shalgi              |                                                           |               
|                        |                                                           |               
|                        | Treasurer & Chief Financial Officer
      (principal      | March 31, 2008
|/s/Alex
      Werber    | financial officer and principal accounting
      officer) |               
|Alex Werber             |                                                           |               
|                        |                                                           |               
|/s/ Yair
      Aloni    | Director                                                  | March 31, 2008
|Yair Aloni              |                                                           |               
|                        |                                                           |               
|/s/ Josef
      Neuhaus | Director                                                  | March 31, 2008
|Josef Neuhaus           |                                                           |               
|                        |                                                           |               
|/s/ Avner
      Raanan  | Director                                                  | March 31, 2008
|Avner Raanan            |                                                           |               

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EXHIBIT INDEX

Exhibit Number
    Description3.1
    Articles of Incorporation, as amended (incorporated by
      reference to Exhibit 3 to the Registrant's quarterly report on Form
      10-QSB/A for the quarter ended March 31, 2003, filed with the Commission
      on April 14, 2004) as amended by Certificate of Amendment (incorporated by
      reference to Exhibit 99.1 to the Registrant's current report on Form 8-K
      filed with the Commission on March 26, 2007).3.2
    Bylaws (incorporated by reference to Exhibit 3.(II) to
      the Registrant's Form 10-SB12G as filed with the Commission on November
      10, 1999, file number 000-28025).4.1
    Specimen Certificate for shares of Common Stock
      (incorporated by reference to exhibit 4.1 to the registrants registration
      statement on Form SB-2 filed with the Commission on December 5, 2007).10.1
    Lease Agreements between Global Energy Ethiopia PLC and
      the Southern Nations Nationalities People's Regional State, Ethiopia
      (incorporated by reference to Exhibits 10.1 and 10.2 to the Registrant's
      current report on Form 8-K filed with the Commission on October 12, 2007).10.2
    Shareholders Agreement and Term Sheet with Yanai Man
      Projects Ltd. (incorporated by reference to Exhibit 10.1 to the
      Registrant's current report on Form 8-K filed with the Commission on July
      25, 2007).10.3
    Shareholder Agreement with Alphakat GMBH (incorporated by
      reference to Exhibit 10.1 to the Registrant's current report on Form 8-K
      field with the Commission on July 13, 2007).10.4
    Term sheet with Alphakat GMBH (incorporated by reference
      to Exhibit 10.1 to the Registrant's current report on Form 8-K field with
      the Commission on July 13, 2007).10.5
    Securities Purchase Agreement between the Registrant and
      the Buyer listed on Schedule I attached thereto (incorporated by reference
      to Exhibit 10.1 to the Registrant's current report on Form 8-K filed with
      the Commission on July 12, 2007).10.6
    Warrants GEYI-1-1 and GEYI-1-2 (incorporated by reference
      to Exhibits 10.2 and 10.3 to the Registrant's current report on Form 8-K
      filed with the Commission on July 12, 2007).10.7
    Registration Rights Agreement between the Registrant and
      the Buyer listed on Schedule I attached thereto (incorporated by reference
      to Exhibit 10.4 to the Registrant's current report on Form 8-K filed with
      the Commission on July 12, 2007).10.8
    Security Agreement between the Registrant and the Buyer
      (as defined therein) (incorporated by reference to Exhibit 10.5 to the
      Registrant's current report on Form 8-K filed with the Commission on July
      12, 2007).10.9
    Term sheet with Cornell Capital Partners, LP
      (incorporated by reference to Exhibit 10.1 to the Registrant's current
      report on Form 8-K filed with the Commission on June 1, 2007).10.10
    DeMonte Associates Investor Relations Agreement
      (incorporated by reference to Exhibit 10.1 to the Registrant's current
      report Form 8-K filed with the Commission on May 30, 2007).10.11
    Share Option Plan (incorporated by reference to Exhibit
      99 to the Registrant's current report on Form 8-K filed with the
      Commission on May 21, 2007).10.12
    Employment Agreement with Alex Werber (incorporated by
      reference to Exhibit 99.1 to the Registrant's current report filed on Form
      8-K on May 15, 2007).10.13
    Employment Agreement with Dr. Irit Arbel (incorporated by
      reference to Exhibit 10.2 to the Registrant's current report on Form 8-K
      filed with the Commission on May 11, 2007).10.14
    Consulting Service Agreement with Yossi Raz (incorporated
      by reference to Exhibit 10.1 to the Registrant's current report filed on
      Form 8-K on May 11, 2007).10.15
    Employment Agreement with Asi Shalgi (incorporated by
      reference to Exhibit 10.1 to the Registrant's current report on Form 8-K
      filed with the Commission on May 2, 2007).10.16
    Form of Subscription Agreement (incorporated by reference
      to Exhibit 10.2 to the Registrant's current report on Form 8-K filed with
      the Commission on February 9, 2007).10.17
    Form of Subscription Agreement (incorporated by reference
      to the Registrant's current report Form 8-K field with the Commission on
      October 30, 2006).10.18
    Form of Promissory Note (incorporated by reference to
      Exhibit 10.1 the Registrant's current report on Form 8-K filed with the
      Commission on September 11, 2006).10.19
    Amended and Restated Secured Convertible Debenture No.
      GEYI-1-1 (incorporated by reference to Exhibit 10.1 the Registrant's
      current report on Form 8-K filed with the Commission on October 26, 2007).10.20
    Secured Convertible Debenture No. GEYI-1-2 (incorporated
      by reference to Exhibit 10.2 the Registrant's current report on Form 8-K
      filed with the Commission on October 26, 2007).


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10.21
      Consulting Agreement dated
          October 20, 2007 between Registrant and Trianon Partners (incorporated
          by reference to Exhibit 10.6 to the Registrant's quarterly report on
          Form 10-QSB filed with the Commission on November 19, 2007).10.22
      Employment Agreement dated
          November 21, 2007 between Global Energy Inc. and Yossi Raz (incorporated
          by reference to Exhibit 10.1 to the Registrant's current report on Form
          8-K filed with the Commission on November 29, 2007).10.23
      Secured Convertible Debenture
          No. GEYI-1-3 (incorporated by reference to Exhibit 10.8 to the Registrants
          current report on Form 8-K filed with the Commission on December 7,
          2007).10.24 *
      Business
          and Royalty Agreement with Covanta Energy Corporation.10.25 *
      License Agreement
        between AlphaKat-Global Energy GmbH and Covanta Energy Corporation.10.26 *
      Business and Development
        Agreement with Renewable Diesel, LLC.10.27 *
      License Agreement
        between AlphaKat-Global Energy GmbH and American Renewable Diesel, LLC.10.28
      Secured Convertible Debenture
          No. GEYI-1-4 (incorporated by reference to Exhibit 10.9 to the Registrants
          current report on Form 8-K filed with the Commission on March 26, 2007).10.29
      Amendment to the Securities
          Purchase Agreement, dated March 20, 2008 (incorporated by reference
          to Exhibit 10.10 to the Registrants current report on Form 8-K
          filed with the Commission on March 26, 2007).10.30
      Amendment no. 1 to Amended
          and Restated Secured Convertible Debenture No. GEYI-1-1 (incorporated
          by reference to Exhibit 10.11 to the Registrants current report
          on Form 8-K filed with the Commission on March 26, 2007).10.31
      Amendment no. 1 to Secured
          Convertible Debenture No. GEYI-1-2 (incorporated by reference to Exhibit
          10.12 to the Registrants current report on Form 8-K filed with
          the Commission on March 26, 2007).10.32
      Amendment no. 1 to Secured
          Convertible Debenture No. GEYI-1-3 (incorporated by reference to Exhibit
          10.13 to the Registrants current report on Form 8-K filed with
          the Commission on March 26, 2007).21.1
      List of Subsidiaries of the
          Registrant (incorporated by reference to exhibit 21.1 to the registrants
          registration statement on Form SB-2 filed with the Commission on December
          5, 2007).24.1*
      Power of
          Attorney (included on signature page).31.1*
      Rule
          13a-14(a)/15d-14(a) Certification, executed by Asi Shalgi, Chief Executive
          Officer, President and Director.31.2*
      Rule
          13a-14(a)/15d-14(a) Certification, executed by Alex Werber, Treasurer
          and Chief Financial Officer.32.1*
      Section
          1350 Certifications, executed by Asi Shalgi, Chief Executive Officer,
          President and Director, and Alex Werber, Treasurer and Chief Financial
          Officer.


* Filed herewith

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