UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K/A

Amendment No. 2







|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

OR



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

For the transition period from              to

Commission file number: 0-18980





HQ SUSTAINABLE MARITIME INDUSTRIES, INC.

(Exact name of registrant as
specified in our charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 62-1407522                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1511 Third Avenue, Suite 788,

Seattle, Washington 98101

(Address of principal executive offices)



(Address of principal executive offices) (Zip Code)

(206) 621-9888

(Registrants telephone number, including area code)



(Former name, former address and former fiscal year,

if changed since last report)





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

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $0.001 Per Share (Title of
Class)





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 Exchange 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 of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  | x |  | Smaller reporting company |  |  ̈

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 voting stock held by non-affiliates of the registrant on December 31, 2007 was approximately $78,210,000

State the number of shares outstanding of each of the issuers classes of equity securities, as of the latest practicable date: As at
December 31, 2007, there were 11,511,317 shares of Common Stock, $0.001 par value per share issued and outstanding and 100,000 Series A preferred stock, $0.001 par value per share, issued outstanding.









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Explanatory Note

This Amendment No. 2 on Form 10-K/A (this Amendment No. 2) to the Annual Report on Form 10-K for the year ended December 31, 2007 (the Annual Report) of HQ Sustainable Maritime
Industries, Inc. (the Company), which was amended on Form 10-K/A on July 1, 2008, is being filed to revise the biography of Joseph I. Emas, Independent Non-Executive Director of the Company, under Item 10. Directors, Executive
Officers, and Corporate Governance, and to revise the table under Item 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters. Except as described above, no other changes have been made to the Annual
Report, and this Amendment No. 2 does not amend or update any other information contained in the Annual Report.



---

The biography of Joseph I. Emas under Item 10. Directors, Executive Officers, and Corporate Governance has been
revised as the following:

Biographies

Joseph I. EmasIndependent non-executive DirectorMr. Emas has been a director since May 18, 2007. Mr. Emas is licensed to practice law in Florida, New Jersey and New York and has provided
independent legal service on the Companys SEC periodical reports filings since August 17, 2005. Since 2001, Mr. Emas has been the senior partner of Joseph I. Emas, P.A. Mr. Emas specializes in securities regulation, corporate
finance, mergers and acquisitions and corporate law. Mr. Emas received his Honors BA at University of Toronto, Bachelor of Administrative Studies, with distinction, at York University in Toronto, his JD, cum laude from Nova Southeastern Shepard
Broad Law School and his L.L.M. in Securities Regulation at Georgetown University Law Center. Mr. Emas was an Adjunct Professor of Law at Nova Southeastern Shepard Broad Law School. Mr. Emas received the William Smith Award, Pro Bono
Advocate for Children in 2000 and the 2006 Child Advocacy Award in Florida and is the author of Update of Juvenile Jurisdiction Florida Practice in Juvenile Law. Mr. Emas was been a member of the Juvenile Court Rules Committee for
the State of Florida from 1999 through 2006, and currently sits on the Florida Child Advocacy Committee.

The table under Item 12 Security Ownership
Of Certain Beneficial Owners and Management and Related Stockholder Matters has been revised as the following:



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

The following table sets forth certain information regarding beneficial ownership of common stock and Series A preferred stock as of December 31, 2007, by:



| |  |  | each person known to us to own beneficially more than 5%, in the aggregate, of the outstanding shares of our common stock
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | each director;
| | - |  | --------------



| |  |  | each of our chief executive officer and our other two most highly compensated executive officers; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | all executive officers and directors as a group
| | - |  | -----------------------------------------------



---

The number of shares beneficially owned and the percent of shares outstanding are based on 11,511,317
shares outstanding as of December 31, 2007 (after reverse split). Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Except as otherwise noted
below, the address of each of the shareholders in the table is c/o HQ Sustainable Maritime Industries, Inc., 1511 Third Avenue, Suite 788, Seattle, Washington.



|                                                                                  |  |                                  |  |                               |  |                                       |  |                              
|--------------------------------------------------------------------------------- |  | -------------------------------- |  | ----------------------------- |  | ------------------------------------- |  | -----------------------------
|Beneficial Owner                                                                  |  | Shares of CommonStock Number (1) |  | Beneficially OwnedPercent (1) |  | Shares of Series APreferred Stock (2) |  | Beneficially OwnedPercent (2)
|Norbert Sporns                                                                    |  | 844,761                          |  | 7.3 percent                   |  | 24,000                                |  | 24.0 percent                 
|Lillian Wang Li                                                                   |  | 878,918                          |  | 7.6 percent                   |  | 25,000                                |  | 25.0 percent                 
|Harry Wang Hua                                                                    |  | 1,766,992                        |  | 15.4 percent                  |  | 51,000                                |  | 51.0 percent                 
|Jean-Pierre Dallaire                                                              |  | 10,000                           |  | Less than 1 percent           |  |                                       |  |                              
|Fred Bild                                                                         |  | 1,270                            |  | Less than 1 percent           |  |                                       |  |                              
|Daniel Too                                                                        |  | 7,880                            |  | Less than 1 percent           |  |                                       |  |                              
|Joseph I. Emas                                                                    |  | 13,000                           |  | Less than 1 percent           |  |                                       |  |                              
|All such directors and executive officers as a group (7 persons)                  |  | 3,522,821                        |  | 30.6 percent                  |  | 100,000                               |  | 100.0 percent                
|                                                                                  |  |                                  |  |                              
|Five Percent Shareholders (Other than Directors and named executive officers      |  |                                  |  |                               |  |                                       |  |                              
|Weiss Multi-Strategy Advisers LLC, George A. Weiss, Frederick E. Doucette III (3) |  | 595,200                          |  | 5.4 percent                   |  |                                       |  |                              
|River Road Asset Management, LLC (4)                                              |  | 564,160                          |  | 5.1 percent                   |  |                                       |  |                              
|Hound Partners, LLC, Hound Performance, LLC and Jonathan Auerbach (5)             |  | 985,351                          |  | 8.9 percent                   |  |                                       |  |                              
|The Tail Wind Fund Ltd. (6)                                                       |  | 1,039,615                        |  | 8.6 percent                   |  |                                       |  |                              



|(1) | Beneficially owns the shares indicated, which are owned of record by Red Coral Group Limited and Sino-Sult Canada (S.S.C.) Limited. Each of Mr. Sporns, Ms. Wang and
Mr. Wang own respectively 24 percent, 25 percent and 51 percent of the issued capital of Red Coral Group Limited and Sino-Sult Canada (S.S.C.) Limited and share voting and investment power over the shares held by Red Coral Group Limited and
Sino-Sult Canada (S.S.C.) Limited. The number of shares includes the common stock shares based upon the Series A Preferred Stock held by the beneficial owners convertible at a rate of 2 common stock shares for 1 preferred stock share at the option
of the beneficial holder, which has been adjusted to reflect a 1 for 20 reverse stock split effectuated on January 31, 2007 to 0.1 shares of common stock for 1 preferred stock share.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Beneficially owns the shares indicated, which are owned of record by Sino-Sult Canada (S.S.C.) Limited. Each of Mr. Sporns, Ms. Wang and Mr. Wang own respectively 24
percent, 25 percent and 51 percent of the issued capital of Sino-Sult Canada (S.S.C.) Limited and share voting and investment power over the shares held by Sino-Sult Canada (S.S.C.) Limited. Each share of Series A Preferred stock has the right
to the voting power equal to that of 1,000 shares of the Companys common stock. The voting power of the Series A Preferred Shares remains the same and is not adjusted for any reverse split, namely each Series A Preferred Share continues
to have the voting power of 1,000 shares of Common Stock.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Based on a Schedule 13G/A jointly filed by Weiss Multi-Strategy Advisers LLC, George A. Weiss and Frederick E. Doucette
III on February 8, 2008. The address of the indicated holders is One State Street, 20thFloor, Hartford, CT 06103.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Based on a Schedule 13G/A filed by River Road Asset Management, LLC with the SEC on February 13, 2008. The address of the indicated holder is 462 S. 4th Street, Suite 1600,
Louisville, KY 40202.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Based on a Schedule 13G/A jointly filed by Hound Partners, LLC, Hound Performance, LLC and Jonathan Auerbach with the SEC on December 17, 2007. The address of the
indicated holders is 101 Park Avenue, 48th Floor, New York, New York 10178.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Based on a Schedule 13G/A filed by The Tail Wind Fund Ltd. (Tail Wind) with the SEC on January 23, 2008. The address of the indicated holder is Windermere House,
404 East Bay Street, P.O. Box SS-5539 British Virgin Isles. Includes (i) 19,615 shares of common stock currently held by Tail Wind; (ii) 850,000 shares of common stock issuable upon conversion of $4,250,000 in principal amount of the
issuers 6.5% Convertible Notes due November 1, 2009; and (iii) 170,000 shares of Common Stock issuable upon exercise of warrants issued to Tail Wind on January 23, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Part IV



|Item 15. | Exhibits, Financial Statement Schedules.
|-------- | ----------------------------------------

The following exhibits
are filed with, and as a part of, this Amendment No. 2 to Annual Report on Form 10-K/A.

List of Exhibits

The exhibits which are filed with this report or which are incorporated herein by reference are set forth in the Exhibit Index hereto.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 2 to the Form 10-K to be signed on our behalf by the undersigned, thereunto duly
authorized.

Dated June 9, 2009



HQ SUSTAINABLE MARITIME INDUSTRIES, INC.By:

/s/ Norbert SpornsName:

Norbert SpornsTitle:

Chief Executive Officer and President


POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Norbert Sporns, Lillian Wang Li and Jean-Pierre Dallaire, and each of them, as
his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her and in his or her name, place, and stead, in any and all capacities, to sign any or all amendments or supplements to this
registration statement, whether pre-effective or post-effective, under the Securities Act of 1933, as amended, to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or appropriate to be done with respect to this registration statement or any amendments or
supplements hereto in the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that all said attorneys-in-fact and agents, or any of them, or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities on June 9, 2009:



|                         |  |                                                                                 |  |             
|------------------------ |  | ------------------------------------------------------------------------------- |  | ------------
|SIGNATURE                |  | TITLE                                                                           |  | DATE        
|                         |  |                                                                                
|/s/ Norbert Sporns       |  | Chief Executive Officer, President and Director (Principal Executive Officer)   |  | June 9, 2009
|Norbert Sporns           |  |                                                                                
|                         |  |                                                                                
|/s/ Lillian Wang         |  | Secretary, Chairman of the Board of Directors, and Director                     |  | June 9, 2009
|Lillian Wang             |  |                                                                                 | 
|                         |  |                                                                                
|/s/ Harry Wang           |  | Chief Operating Officer and Director                                            |  | June 9, 2009
|Harry Wang               |  |                                                                                
|                         |  |                                                                                
|/s/ Andrew Intrater      |  | Independent Non-Executive Director                                              |  | June 9, 2009
|Andrew Intrater          |  |                                                                                
|                         |  |                                                                                
|/s/ Fred Bild            |  | Independent Non-Executive Director                                              |  | June 9, 2009
|Fred Bild                |  |                                                                                
|                         |  |                                                                                
|/s/ Daniel Too           |  | Independent Non-Executive Director                                              |  | June 9, 2009
|Daniel Too               |  |                                                                                
|                         |  |                                                                                
|/s/ Jean-Pierre Dallaire |  | Chief Financial Officer and Financial Controller (Principal Accounting Officer) |  | June 9, 2009
|Jean-Pierre Dallaire     |  |                                                                                
|                         |  |                                                                                
|/s/ Joseph I. Emas       |  | Independent Non-Executive Director                                              |  | June 9, 2009
|Joseph I. Emas           |  |                                                                                



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EXHIBIT INDEX



|               |  |                                                                                                                       
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description of Document                                                                                               
|23.2           |  | Consent of the Independent Registered Public Accounting Firm                                                          
|               | 
|31.1           |  | Certification Pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as Amended                
|               | 
|31.2           |  | Certification Pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as Amended                
|               | 
|32.1           |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|               | 
|32.2           |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002