UNITED STATES

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, ~~2007~~ 2008.

o 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: 001-14791

SOLAR ENERGY LIMITED

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

76-0418364

(I.R.S. Employer

Identification No.)

~~145-925~~73200 ~~West~~El ~~Georgia Street~~Paseo, ~~Vancouver~~Suite 2H, ~~British~~Palm ~~Columbia~~Desert, ~~Canada~~California, ~~V6C 3L2~~92260

(Address of principal executive offices) (Zip Code)

(~~604~~760) ~~669~~773-~~4771~~1111

(Issuer’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: none

Securities registered under Section 12(g) of the Exchange Act: common stock (title of class), $0.0001 par value.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933: Yes o No þ. 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 o No þ

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 o No þ

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 þ No o

Indicate by check mark if disclosure of delinquent filers in response 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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company as defined by Rule 12b-2 of the Exchange Act: smaller reporting company þ

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

The aggregate market value of the registrant's common stock, $0.0001 par value, held by non-affiliates (14,~~908~~048,355 shares) was approximately $2913,~~608,962~~143 based on the average closing bid and asked prices ($0.~~175~~065) for the common stock on April 1114, ~~2008~~2009.

At April 14, ~~2008,~~2009 the number of shares outstanding of the registrant's common stock, $0.0001 par value (the only class of voting stock), was 2118,~~923~~423,309.

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TABLE OF CONTENTS

		Page
PART I.
	Item 1. Business		3
	Item 1A. Risk Factors		97
	Item 1B. Unresolved Staff Comments		1210
	Item 2. Properties		1210
	Item 3. Legal Proceedings		1210
	Item 4. Submission of Matters to a Vote of Security Holders		1211
PART II.
	Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities		1211
	Item 6. Selected Financial Data		1412
	Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations		1513
	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. Controls and Procedures (Item 9A (T))		20
	Item 9B. Other Information		22
PART III.
	Item 10. Directors, Executive Officers and Corporate Governance		22
	Item 11. Executive Compensation		24
	Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		2526
	Item 13. Certain Relationships and Related Transactions, and Director Independence		26
	Item 14. Principal Accountant Fees and Services		27
	Item 15. Exhibits and Financial Statement Schedules		27
PART IV.
	Signatures		28
	Item 15. Exhibits and Financial Statement Schedules		28
	Signatures		29

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PART I

ITEM 1. BUSINESS

As used herein the terms “Company,” “it,” “its,” “we,” “our,” and “us” refer to Solar Energy Limited, our predecessors, and our subsidiaries, unless context indicates otherwise.

Corporate History

The Company was incorporated under the laws of the State of Delaware as Taurus Enterprises, Inc., on January 5, 1994, and re-incorporated in Nevada on August 20, 1996, as Salvage World, Inc. On December 17, 1997, the Company effected a Plan of Reorganization and Merger of Salvage World, Inc., into Solar Energy Limited, a private Delaware Corporation, the effect of which merger changed our name and moved our place of incorporation from Nevada to Delaware. The reorganization also involved the acquisition of Hydro-Air Technologies, Inc., initially as a wholly-owned subsidiary.

~~On August~~Since ~~18,~~reorganization ~~2005,~~ the Company ~~acquired~~has ~~D2Fusion,~~focused ~~Inc.~~on ~~(“D2Fusion”)~~the ~~from~~development ~~Russ George~~of ascost-effective asolutions ~~wholly owned subsidiary in exchange~~ for aglobal ~~convertible~~issues ~~debenture~~related ~~which~~to ~~Mr. George converted into 2~~water,~~000,000~~ ~~shares~~energy ofand ~~our common stock on November 21, 2005~~pollution.

OnThe ~~August~~primary thrust of that focus was initially in connection with the development of renewable energy sources such as solar energy and water. The Company believed ~~10,~~that ~~2005~~with the right technologies renewable energy could prospectively compete with traditional energy sources. Nevertheless, the Company ~~acquired~~was ~~Planktos,~~unable ~~Inc~~to realize any commercial application of such technologies. ~~from~~In ~~Russ~~2005 ~~George~~the Company redirected its focus to tackle carbon sequestration with a process designed to generate plankton blooms in the oceans as a ~~wholly~~means ~~owned~~to ~~subsidiary~~resist global warming and the application of “cold infusion” ~~exchange~~technologies ~~for~~as a ~~convertible~~potential ~~debenture~~source ~~which~~of Mrunlimited energy. ~~George~~ On ~~converted~~February 22, 2008 the Company entered into 1an agreement with Russ George,~~500,000~~ ~~shares~~the proponent of the carbon sequestration process and the “cold fusion” technologies, to separate itself and its subsidiaries ~~our~~from ~~common~~his ~~stock~~management, onpursuant ~~November~~to ~~17,~~which ~~2005~~Mr. George agreed to cancel 3.5 million shares in exchange for the non-exclusive use of the know-how associated with both “iron-fertilization” and “cold fusion”.

OnThe ~~August 17, 2005, the~~ Company ~~and~~is ~~Planktos,~~currently ~~Inc.~~without ~~executed an Iron-Fertilization Prove-Out and Purchase Agreement with Planktos Corp~~operations. (“Planktos”), whereby Planktos committed to assist the Company in providing developmental funding for Planktos, Inc’s “iron-fertilization” prove out CO2 sequestration program in exchange for exclusive marketing and intellectual property rights to a CO2 sequestration process.

OnPlanktos May 31, 2007, the Company entered into a securities exchange agreement and plan of exchange with Enwin Resources, Inc. (“Enwin”) pursuant to which agreement the Company intended to transfer our 100% ownership of D2Fusion to Enwin in exchange for an aggregate of 30,000,000 shares of Enwin’s common stock, and the fulfillment of certain conditions on or before closing. The transaction was subsequently abandoned when neither the Company nor Enwin were able to satisfy the terms of the agreement as proscribed.

OnThe ~~August 9, 2007, the~~ Company ~~transferred~~acquired ~~our 100% ownership of~~ Planktos, Inc. ~~to Planktos~~ in ~~exchange~~ ~~for~~August ~~45,000,000~~of ~~shares~~2005 offrom ~~Planktos’~~Mr. ~~common~~George ~~stock~~intent ~~pursuant~~on toimproving the ~~terms~~world’s ofmarine ~~a securities~~ and ~~exchange~~terrestrial ~~agreement~~environments by ~~and~~acting ~~plan~~on ofcommercial ~~exchange~~opportunities ~~executed~~related onto ~~January~~carbon ~~12,~~sequestration ~~2007~~projects. ~~The transaction~~Planktos ~~caused~~operated usas ~~to acquire~~ a ~~controlling~~wholly ~~interest~~subsidiary ~~(53.78%)~~of in the ~~outstanding~~Company ~~common shares~~until August of ~~Planktos.~~2007 ~~Since~~at ~~the~~which ~~shares~~time ~~issued~~it inwas ~~the~~sold ~~acquisition~~to ~~changed~~Planktos ~~control~~Corp. offor ~~Planktos,~~a controlling ~~the~~equity ~~Company~~interest ~~elected~~in tothat ~~consolidate Planktos for financial reporting purposes~~entity.

~~Despite vigorous~~Planktos Corp.’s efforts to finance, ~~implement~~ and conduct ~~Planktos’~~ an “iron-fertilization” prove out program, while ~~funding~~at ~~labors~~the same time attempting to ~~sustain D2Fusion’s~~fund ~~cold~~a ~~fusion~~reforestation ~~research~~project ~~program,~~in aHungary were not successful. A combination of poor market conditions, ~~international~~ condemnation from certain environmental groups and local opposition to ocean research caused Planktos to suspend operations ~~and~~in ~~D2Fusion~~December toof ~~place~~2007. ~~research and~~ ~~development activities on hold.~~

On November 12, 2008 the Company sold its entire interest in Planktos Corp. to Maidon Services Limited in 3exchange for cash consideration of $200,000 of which $125,000 has been paid with the remainder due in December of 2009. The agreement provides that the remainder due can be converted, at the Company’s option, into shares of Planktos Corp. at $0.25 per share.

Subsequent to the year ended December 31, 2007, Planktos’ “iron-fertilization” prove out program remains suspended and efforts are underway to wind down its operations. Planktos has terminated all employees, liquidated substantially all of its assets and is in the process of closing its Foster City, California office. D2Fusion has vacated office space it shared with Planktos and intends to resume research and development activities from facilities occupied in Los Alamos, New Mexico.3

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On February 22, 2008 the Company and D2Fusion, a wholly owned subsidiary of the Company, entered into a Settlement and Release Agreement with Planktos, Russ George, and Nelson Skalbania for the purposes of separating the services and knowD-~~how~~2 ~~of Russ George, from each of D2Fusion,~~Fusion Inc. and Planktos. The agreement provided that Russ George resign his positions as Planktos’ chief executive officer, chief financial officer and principal accounting officer, resign from D2Fusion’s board of directors and return to us for cancellation 3,500,000 of our common shares that were issued to him for his ownership interest in Planktos, Inc. and D2Fusion, Inc. in exchange for his right to the exclusive use of the name Planktos and the non-exclusive use of the proprietary know-how associated with both “iron-fertilization” and cold fusion.

The ~~operations~~ ofCompany ~~our~~acquired ~~subsidiaries~~D-2 ~~and~~Fusion, ~~related~~Inc. ~~companies~~from ~~are~~Mr. ~~now~~George ~~entirely~~in ~~focused~~August onof ~~renewable energy~~2005 ~~sources~~in ~~including~~order ~~cold~~to ~~fusion~~fund ~~from our~~ research and development ~~facility~~into insolid-state ~~Los~~fusion technology. Designs for entry level heat and ~~Alamos,~~energy ~~New~~applications ~~Mexico~~for homes and industry were the focus of that effort.

~~The~~D-2 Fusion’s attempts to develop an energy program built around “cold fusion” met with limited successes that could not be replicated. Several attempts to realize funding commitments for the D-2 Fusion research and development effort proved unsuccessful. Consequently, D2-Fusion was forced to suspend ~~Company~~operations prior to year end December 31, 2008.

~~The~~Our ~~Company intends~~principal toplace ~~remain~~of abusiness ~~research~~is ~~and~~located ~~development~~at ~~incubator~~73200 ofEl ~~(i)~~Paseo, ~~cost-effective~~Suite ~~renewable energy~~2H, ~~sources~~Palm ~~that~~Desert, doCalifornia, ~~not threaten the environment~~92260, and ~~(ii)~~our ~~practical~~telephone ~~solutions~~number ~~to mitigate~~is ~~the~~(760) ~~effects~~773-1111. ~~of traditional energy sources’ unintended consequences~~Our ~~concerning~~registered ~~global~~statutory ~~climate~~office ~~change.~~is ~~Since~~located ~~1997~~at ~~the~~The Company ~~has~~Corporation, ~~focused~~2711 onCenterville ~~innovative solutions~~Road, ~~for~~Wilmington, ~~global issues related to water~~Delaware, ~~energy and pollution~~19808. ~~Our primary focus has been on the development of renewable energy sources that might compete effectively with traditional sources of energy.~~

~~Our principal~~The ~~place~~Company’s ofshares ~~business~~are isquoted ~~located~~on atthe ~~145-925~~Over ~~West~~the ~~Georgia~~Counter ~~Street,~~Bulletin ~~Vancouver,~~Board ~~British Columbia,~~under ~~Canada,~~the ~~V6C~~symbol ~~3L2, and our telephone number is (604) 669-4771~~“SLRE”. ~~Our registered statutory office is located at The Company Corporation, 2711 Centerville Road, Wilmington, Delaware, 19808.~~

The ~~Company’s~~ ~~shares are quoted on the Over the Counter Bulletin Board under the symbol SLRE.~~Company

The Company’s plan of operation for the coming year is to actively pursue development stage assets and emerging businesses with which to merge or acquire. We intend to function as a business incubator for assets and businesses that focus ~~Summary~~on (i) cost-effective renewable energy sources that do not threaten the environment, and (ii) practical solutions to mitigate the effects of ~~Current~~traditional ~~Operations~~energy sources’ unintended consequences concerning global climate change. We will fund the process of driving emerging technologies towards commercial applications through debt or equity offerings tied to our common stock.

~~The~~Selection of a Business ~~following~~Management ~~discussion~~has adopted a conservative policy of ~~current~~seeking ~~operations~~opportunities isthat ~~subject~~it considers to be of exceptional quality. Therefore, we may have to wait some time before consummating a suitable transaction. Management recognizes that the ~~Company~~higher ~~obtaining~~the ~~sufficient~~standards it imposes, the greater may be its competitive disadvantage when vying with other acquiring interests or entities. ~~financing~~The Company does not intend to ~~resume~~restrict its ~~plan~~consideration to any particular business or industry segment, though management intends to continue its focus on opportunities related to renewable energy sources and combating climate change. Due to our lack of ~~operation~~financial asresources, ~~all~~the ~~prior~~scope ~~operations~~and ~~have~~number ~~either~~of ~~been~~suitable business ventures is limited. We are therefore most likely to participate in a single business venture. ~~terminated~~Accordingly, orthe ~~suspended~~Company ~~pending~~will ~~financing~~not be able to diversify and ~~reconsideration~~will be limited to one merger or acquisition. The lack of ~~our~~diversification ~~objectives~~will prevent us from offsetting losses from one business opportunity against profits from another.

~~All~~The decision to participate in a specific business opportunity will be made upon management’s analysis of the ~~following~~ ~~references~~quality ~~made~~of tothe ~~research~~opportunity’s management and ~~development~~personnel, ~~activities~~the ~~relate~~anticipated toacceptability of products or marketing concepts, the ~~activities~~merit of technological changes and numerous other factors which are difficult, if not impossible, to analyze through the application of ~~our~~any ~~subsidiaries~~objective criteria. Further, it is anticipated that the historical operations of a specific venture may not necessarily be indicative of the potential for the future because of the necessity to substantially shift a marketing approach, expand operations, change product emphasis, change or substantially augment management, or make other ~~entities~~changes. ~~with~~The ~~which~~Company wewill ~~contract~~be aspartially ~~Solar~~dependent ~~Energy~~upon ~~Limited~~the ~~does not~~management ~~conduct~~of any ofgiven business ~~its~~opportunity ~~own~~to ~~research~~identify such problems and ~~development~~to ~~activities~~implement, or be primarily responsible for the implementation of required changes.

The Company remains committed to developing proprietary know-how associated with cold fusion, and intends that Planktos reexamine what further plan of operation, if any, might be instigated in connection with the sequestration of CO2 D2Fusion intends to resume research and development activities devoted to cold fusion as soon as sufficient financing becomes available for this purpose while Planktos’ operations remain suspended pending additional consideration.4

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4Since we may participate in a business opportunity with a newly organized business or with a business which is entering a new phase of growth, it should be emphasized that the Company may incur risk due to the failure of the target’s management to have proven its abilities or effectiveness, or the failure to establish a market for the target’s products or services, or the failure to realize profits. The Company will not acquire or merge with any company for which audited financial statements cannot be obtained. Management anticipates that any opportunity in which we participate will present certain risks. Many of these risks cannot be adequately identified prior to selection of a specific opportunity. Our shareholders must therefore depend on the ability of management to identify and evaluate such risks. Further, in the case of some of the opportunities available to us, it may be anticipated that some of such opportunities are yet to develop as going concerns or that some of such opportunities are in the development stage in that same have not generated significant revenues from principal business activities prior to our participation.

~~Cold~~Acquisition of Business ~~Fusion~~Implementation of a structure for any particular business acquisition may involve a merger, consolidation, reorganization, joint venture, franchise or licensing agreement with another corporation or entity. The Company may also purchase stock or assets of an existing business. On the completion of a transaction, it is possible that present management and shareholders of the Company would not remain in control of the Company. Further, our sole officer and director may, as part of the terms of any transaction, resign, to be replaced by new officers and directors without a vote of our shareholders. We anticipate that any securities issued in any such reorganization would be issued in reliance on exemptions from registration under applicable federal and state securities laws. However, in certain circumstances, as a negotiated element of any transaction, the Company may agree to register securities either at the time a transaction is consummated, under certain conditions, or at a specified time thereafter. The issuance of substantial additional securities and their potential sale into any trading market may have a depressive effect on such market. While the actual terms of a transaction to which the Company may be a party cannot be predicted, it may be expected that the parties to a business transaction will find it desirable to avoid the creation of a taxable event and thereby structure the acquisition in a so called “tax-free” reorganization under Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”). In order to obtain tax-free treatment under the Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, our shareholders would retain less than 20% of the issued and outstanding shares of the surviving entity, which could result in significant dilution in the equity of such shareholders.

WeOur ~~are developing~~due ~~our~~diligence ~~energy~~process ~~program~~will inrequire ~~Los~~that ~~Alamos,~~management ~~New~~meet ~~Mexico,~~personally with ~~scientists and engineers working toward~~ the ~~delivery~~personnel ofinvolved ~~proprietary~~in ~~solid-state~~any ~~fusion~~given ~~aimed~~transaction, atvisit ~~entry level heat~~ and ~~energy~~ ~~applications~~inspect ~~for~~material ~~homes~~facilities, ~~and~~obtain ~~industry.~~independent ~~Solid-state~~analysis ~~fusion~~or isverification aof ~~solid~~the ~~state,~~information ~~low temperature~~provided, ~~non-radioactive~~check ~~nuclear~~references ~~reaction~~for ~~that~~management ~~fuses~~and ~~two~~key ~~heavy~~persons, ~~hydrogen~~and ~~nuclei~~take ~~into~~other areasonable ~~helium~~investigative ~~atom~~measures, ~~and~~to ~~releases~~the ~~enormous~~extent ~~amounts~~ of ~~heat.~~our ~~The~~limited ~~technology~~financial isresources ~~more~~and ~~widely~~management ~~recognized under the name “cold-fusion~~expertise.”

Unlike the reactions in “cold-fusion,” we use more simple and reliable solid state processes more akin to high temperature super-conductor physics to produce and control radiation-free fusion reactions known as “LENR” or Low Energy Nuclear Reaction in the Solid State. In this most simple form of fusion, the process of LENR fuses two Deuterium atoms (heavy Hydrogen) that are contained and constrained under solid-state conditions fuse to form a single Helium-4 isotope (4He) but since the mass of one 4H atom is slightly less than two Deuterium atoms, each new helium atom created is accompanied by a release of energy. To put this into a more common perspective, under ideal conditions one gram of hydrogen fuel holds the equivalent to billions of watts (joules) of energy.5

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~~First discovered~~The manner in which we participate in an opportunity will depend on the ~~1930s~~nature ~~then~~of ~~re-discovered~~the opportunity, the respective needs and ~~announced~~desires inof ~~1989~~the Company and other parties, ~~this~~the ~~safe~~management of the opportunity, ~~low-cost~~and the our relative negotiating strengths. Negotiations that involve mergers or acquisitions will focus on the ~~technology~~percentage ~~seemed~~of tothe ~~answer~~Company ~~all~~that ~~society's~~the ~~prayers~~target company shareholders would acquire in exchange for atheir ~~clean~~shareholdings ~~and~~in ~~abundant~~the ~~new~~target ~~energy source~~company. ToDepending ~~some~~upon, ~~however,~~among itother ~~appeared~~things, tothe ~~violate~~target ~~conventional~~company’s ~~physics~~assets and ~~threaten entrenched~~liabilities, ~~energy~~our ~~industries,~~shareholders ~~and~~will itin ~~was~~all ~~for~~likelihood hold a ~~time~~lesser ~~denounced~~percentage asownership ~~impossible.~~interest ~~Now,~~in ~~after more~~the ~~than~~Company 17following ~~years~~any ofmerger ~~painstaking~~or ~~research~~acquisition. ~~and~~The ~~experimentation,~~percentage ~~this~~ownership ~~enigmatic~~may ~~new phenomenon~~be ~~has~~subject ~~finally~~to ~~given~~significant upreduction ~~enough~~in ~~secrets~~the toevent ~~allow~~the ~~development~~Company ofacquires ~~laboratory~~a target company with substantial ~~applications~~assets. ~~Upon~~Any ~~completion~~merger ofor aacquisition ~~consumer~~effected ~~model,~~by ~~multi-kilowatt~~the ~~devices~~Company ~~will~~can be ~~able~~expected to ~~permeate~~ ~~society,~~have ~~enhancing~~a ~~the~~significant ~~economy,~~dilutive ~~environment,~~effect ~~and~~on ~~self-sufficiency~~the percentage of ~~countless nations~~shares ~~around~~held ~~the~~by ~~globe~~our current shareholders.

~~Major~~Operation of Business after Acquisition ~~energy~~The ~~research~~Company’s ~~organizations~~operation ~~and~~following ~~government~~its ~~agencies~~merger ~~around~~or ~~the~~acquisition ~~world~~of ~~are~~a ~~now~~business ~~accelerating efforts~~will tobe ~~develop~~dependent ~~and~~on ~~deliver~~the ~~new~~nature ~~forms~~ of ~~nuclear~~the ~~energy.~~business ~~Only~~and ~~solid-state~~the ~~fusion~~interest ~~offers such~~acquired. anWe ~~energy~~are ~~solution~~unable ~~without~~to ~~any~~determine ~~radioactivity~~at orthis ~~nuclear~~time ~~waste.~~whether As the ~~departments~~Company ~~of energy~~will ~~and~~be ~~defense~~ in ~~the~~control ~~USA,~~of ~~Europe,~~the ~~and~~business ~~Asia~~or ~~begin~~whether topresent ~~make~~management ~~R&D~~will ~~commitments~~be in ~~this field,~~control weof ~~are~~the ~~positioned~~Company tofollowing ~~pioneer~~the ~~many~~acquisition. ~~commercial~~We ~~applications~~may expect that ~~can~~any ~~finally~~future ~~bring~~business will present various challenges that cannot be ~~this~~predicted ~~clean~~at ~~energy~~the ~~revolution~~present ~~to fruition~~time.

Our team in Los Alamos has working prototypes that can demonstrate LENR. We expect that these prototypes will be further tested and refined by research groups. Our ultimate goal is to produce heat and electricity at a fraction of today’s cost with zero harmful emissions. Competition

~~The~~We ~~Company is~~will ~~well~~be ~~aware~~involved ~~of the controversy surrounding “cold fusion” efforts~~ in ~~the United~~intense ~~States~~competition ~~and~~with ~~abroad.~~other ~~However,~~business weentities ~~believe~~to ~~that~~obtain ~~there~~a issuitable ~~sufficient~~business ~~global~~opportunity ~~evidence~~many ~~that the risk/reward ratio merits our continued investment in the pursuit~~ of ~~this~~which ~~technology.~~competitors ~~In the~~will ~~event~~have ~~that~~a weconsiderable ~~are~~edge ~~able~~over ~~to advance our prototype technology for commercial application,~~us ~~such~~by anvirtue ~~advance~~of ~~could~~their ~~help~~stronger ~~solve~~financial ~~much~~resources ofand ~~the~~prior ~~world’s~~experience ~~energy,~~in ~~and pollution problems~~business.

~~Summary of Operations during the Year Ended December 31, 2007~~Marketability

~~During the~~ ~~year~~As ~~ended~~we ~~December~~currently ~~31,~~are ~~2007~~not ~~our~~involved ~~operations~~in ~~were~~selling ~~focused~~products onor ~~the~~services, ~~operations~~there ofcan ~~our~~be ~~majority owned~~no ~~subsidiary~~assurance ~~Planktos~~that ~~and~~we ~~the~~will ~~research~~be ~~and~~successful ~~development~~in ~~efforts~~marketing ofany ~~our~~such ~~wholly~~products ~~owned subsidiary~~or ~~D2Fusion~~services or whether a market will develop.

5Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements and Labor Contracts

~~Planktos~~We currently have no patents, ~~Inc~~trademarks, licenses, franchises, concessions, royalty agreements or labor contracts.

~~Subsequent to~~Governmental ~~the year ended December 31, 2007, Planktos’ “iron-fertilization” prove out program remains suspended~~ and ~~efforts~~Environmental ~~are~~Regulation ~~underway to wind down its operations.~~ ~~Planktos has terminated all employees, liquidated substantially all of its assets and is in the process of closing its Foster City, California office.~~

~~Planktos was~~The aCompany ~~Foster~~cannot ~~City~~anticipate the government regulations, ~~California~~if ~~based~~any, ~~business~~to ~~focused~~which onit ~~reviving~~may ~~marine~~be assubject ~~well~~until asit ~~land based~~has ~~ecosystem~~acquired ~~health~~an ~~and~~interest ~~biodiversity~~in ~~with~~a ~~the~~business. ~~intention~~The use of ~~slowing~~assets ~~global~~to ~~climate change.~~conduct ~~Planktos~~a ~~had~~business ~~launched~~that athe ~~two~~Company ~~year~~may ~~pilot~~acquire ~~project~~could ~~series~~subject it to ~~restore~~environmental, ~~hundreds~~public ofhealth and ~~millions~~safety, ofland ~~tons~~use, oftrade, ~~missing~~or ~~plankton~~other ~~plant~~governmental ~~life~~regulations and state or local taxation. Our selection of a business in ~~the~~which ~~open~~to ~~seas~~acquire an interest will include an effort to ~~sequester~~ascertain, ~~tens~~to ~~of millions~~the extent of ~~tons~~the limited resources of ~~CO2~~the inCompany, the ~~deep~~effects ~~ocean~~of ~~for~~any ~~centuries~~government orregulation ~~more.~~on Onthe ~~land, KlimaFa,~~prospective ~~Planktos’~~business ~~majority~~of ~~owned~~the ~~subsidiary~~Company. However, ~~had~~in ~~intended~~certain tocircumstances, ~~plant~~such ~~thousands~~as ~~of hectares~~the acquisition of an interest in a new, ~~permanently~~or ~~protected~~start-up business activity, ~~native~~it ~~forests~~may innot ~~the~~be ~~national~~possible ~~parks~~to ~~system~~predict ofwith ~~the~~any degree of ~~European~~accuracy ~~Union~~the ~~and~~impact ~~elsewhere~~of government regulation.

Both ocean plankton and forest ecorestoration projects remove huge quantities of global warming CO2 from the atmosphere. Long term CO2 reductions can now be banked and traded like a commodity in international carbon markets. Consequently, Planktos’ business model was to restore the planet’s most vital biological systems while generating what it believed would be the largest volume of lowest cost greenhouse gas offsets or “carbon credits” available to commercial, governmental and green consumer clients.6

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~~Forests~~Research ofand ~~the Ocean~~Development

~~Plankton~~During ~~in our~~the ~~oceans~~years isended ~~well~~December ~~documented~~31, in2008 ~~its~~and ~~utilization~~2007, ofthe ~~photosynthesis~~Company tospent ~~absorb CO2.~~$0 ~~Planktos’~~and ~~commercial~~$186,511, ~~objective~~respectively, ~~was~~on toresearch ~~produce~~and ~~CER~~development ~~credits~~activities. ~~utilizing~~We cannot anticipate the amount of spending on ~~proprietary~~research ~~technology~~and ~~designed~~development toin ~~stimulate~~the ~~plankton~~future; ~~growth~~such level will depend upon on success in ~~the~~raising ~~world’s~~additional ~~oceans~~financing asand our progress with ongoing development aprojects ~~means~~in byrelation ~~which~~ to ~~sequester~~the ~~(isolate~~nature ~~from~~of ~~the~~future ~~atmosphere)~~businesses ~~CO2~~that we may incubate.

During November of 2007 the Weatherbird II research vessel embarked on a voyage devoted to ocean research at the invitation of the University of Las Palmas Ocean Science Department. The mission was to begin research and experiments dedicated to the study of ocean plankton blooms in the region However, in early December of 2007, the Weatherbird II was denied entry to Spanish waters upon arrival at Las Palmas, Gran Canaria, in the Canary Islands due to certain administrative and permit issues. Since port authorities could not be moved to permit the Weatherbird II entry, the vessel was redirected north into Portuguese waters at Funchal, Madeira. Consequently, the research mission was abandoned and the Weatherbird II returned to the United States.Employees

The Company is a development stage company and currently has no employees. Michael James Gobuty, our sole officer and director, manages the Company. We look to Mr. Gobuty for his entrepreneurial skills and talents. Management uses consultants, attorneys and ~~Forests~~accountants ofas necessary and does not plan to engage any full-time employees in the ~~Land~~near future.

AReports tree is composed of about 50% carbon which is produced by removing CO2 from the air through photosynthesis. KlimaFa S.A., formerly a majority owned subsidiary of Planktos, was dedicated to aSecurity forestation and reforestation projects in Europe and the Americas. Studies were underway to develop an ecologically sound indigenous species mix and planting model for flora to maximize wildlife habitat and biodiversity in the respective regions. KlimaFa was involved in the development of several government-assisted carbon forest projects in Hungary designed to restore native mixed growth forests in national parks and then afforest vast tracts of retired agricultural lands.Holders

The Company’s annual report contains audited financial statements. We are not required to deliver an annual report to security holders and will not automatically deliver a copy of the annual report to our security holders unless a request is made for such delivery. We file all of our required reports and 6other information with the Securities and Exchange Commission (the “Commission”). The public may read and copy any materials that are filed by the Company with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The statements and forms filed by us with the Commission have also been filed electronically and are available for viewing or copy on the Commission maintained Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. The Internet address for this site can be found at http://www.sec.gov.

~~Competition~~ITEM 1A. RISK FACTORS

~~Efforts~~The ~~to develop~~Company’s ~~alternative~~securities ~~energy sources that can compete with traditional energy sources without threatening the environment,~~ and ~~the~~future ~~competition~~operations ~~amid these efforts,~~ are ~~fragmented~~subject ~~and very~~to competitive. Although we will not compete directly with other interests involved in the provision of renewable energy sources from the realization of cold fusion technology or otherwise, the Company will compete indirectly with a number of ~~companies,~~risks. ~~both~~Below ~~private~~we ~~and public,~~have ~~that~~identified ~~are~~and ~~active~~discussed in the ~~search~~material ~~for~~risks ~~cost-effective~~that ~~applications~~we ~~of renewable energy Many of these indirect competitors~~ are ~~substantially~~likely ~~larger~~to ~~and~~face. ~~better~~Should ~~funded~~any ~~than us with significantly longer histories~~ of ~~research~~the ~~and~~following ~~development.~~risks ~~Therefore~~occur, wethey ~~can~~will ~~offer~~adversely noaffect our ~~assurance~~future ~~that~~operations, webusiness, ~~will~~financial becondition ~~successful~~and/or inoperating ~~competing~~results ~~for~~as ~~commercial~~well ~~solutions~~as ~~with~~the ~~existing and~~trading ~~emerging~~price ~~research~~ and/or ~~development~~the ~~businesses~~value ~~focused~~of onour ~~similar applications~~securities.

~~The~~Risks ~~Company believes~~Related ~~that~~to ~~competition in~~ the ~~search~~Company’s ~~for the efficient application of alternative energy sources is based principally on the ability to successfully manage certain practical considerations.~~Business

~~Competition revolves~~The ~~around:~~Company’s ability to continue as a going concern is in question

•Our independent public accounting firm has issued a report on our consolidated financial statements for the ~~development~~years ofended ~~such~~December ~~technologies;~~31, 2008 and 2007 that states that the consolidated financial statements were prepared assuming we will continue as a going concern and further states that our significant operating losses and negative working capital raise substantial doubt about our ability to continue as a going concern.

~~• the price of the equipment required to harness the energy as compared to other alternative applications and traditional systems;~~7

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•We ~~the~~have ~~period~~a ~~required~~history toof ~~recover~~significant ~~any~~operating ~~capital~~losses ~~cost~~and orsuch ~~equipment~~losses ~~costs~~may ~~from~~continue ~~energy~~in ~~savings~~the ~~that might result from operations;~~future

•Since ~~the~~our ~~reliability~~inception in 1994, our operations have resulted in a continuation of losses and an accumulated deficit which reached $14,978,690 at December 31, 2008. The Company has never realized revenue from operations. We will continue to incur operating losses as we maintain our search for a suitable business opportunity and satisfy our ongoing disclosure requirements with the ~~systems;~~Securities and Exchange Commission (“Commission”). Such continuing losses could result in a decrease in share value.

•The ~~public~~Company’s ~~acceptance~~limited offinancial ~~alternative~~resources ~~energy~~cast ~~applications;~~severe ~~and~~doubt on our ability to acquire a profitable business opportunity.

•The Company’s future operation is dependent upon the ~~reputation~~acquisition of a profitable business opportunity. However, the ~~manufacturer~~prospect of such an acquisition is doubtful due to the Company’s limited financial resources. Since we have no current business opportunity, the Company is not in a position to improve this financial condition through debt or ~~producer~~equity offerings. Therefore, this limitation may act as a deterrent in future negotiations with prospective acquisition candidates. Should we be unable to acquire a profitable business opportunity the Company will, in all likelihood, be forced to cease operations.

~~The~~Our ~~Company anticipates~~limited ~~that~~financial ~~our~~resources ~~cold~~cast ~~fusion~~severe ~~program,~~doubt ~~with~~on further research and development, will respond successfully to these considerations. Further, the Company believes that we have certain distinctive competitive advantages over all or many of our ~~competitors~~ability ~~that has enabled us~~ to ~~progress~~pursue to our ~~current~~business ~~level~~plan of ~~technology~~incubating ~~development~~new ~~The~~business ~~advantages include:~~opportunities.

•The ~~the~~Company’s ~~breadth~~future ofoperation is dependent upon its ability to realize sufficient financing to incubate business opportunities through merger or acquisition. We cannot be certain that financing for our ~~approach~~intended purpose will be forthcoming. Our inability to ~~applying~~finance ~~both~~new ~~renewable~~business ~~resources;~~opportunities will prevent us from developing our business plan and may act as a deterrent in any future negotiations with merger or acquisition candidates. Should the Company be unable to realize financing and develop what might become a profitable business opportunity, it will, in all likelihood, be forced to cease operations.

•Risks ~~the~~Related ~~academic,~~to ~~technical~~the ~~and professional proficiency of our chief project managers;~~Company’s Stock

•The ~~environmental~~Company ~~integrity;~~will ~~and~~need to raise additional capital to fund operations which could adversely affect our shareholders

•The ~~the~~Company ~~willingness~~will ofneed ~~project~~to ~~managers~~raise additional capital. However, we have no commitment from any source of financing to ~~consider~~provide ~~joint~~us ~~venture~~with ~~relationships~~this necessary additional capital. Should we secure a commitment to provide us with ~~third~~capital ~~parties~~such commitment may obligate us to ~~maximize~~issue ~~resources~~additional shares of the Company’s common stock or warrants or other rights to acquire common stock which will result in ~~research~~dilution ~~and~~to ~~development~~existing shareholders. Nonetheless, if we are unable to obtain additional capital, then we will need to restrict or even cease operations, which action would adversely affect our shareholders.

~~All~~The ~~of these~~market ~~factors~~for inour ~~combination~~stock ~~with~~is ~~the~~limited ~~dedication of the Company’s personnel~~ and ~~sufficient~~ ~~financing~~our ~~will~~stock ~~enable~~price usmay tobe ~~become competitive in the search for an efficient application of renewable energy sources~~volatile.

~~Marketability~~The market for our common stock has been limited due to low trading volume and the small number of brokerage firms acting as market makers. Because of the limitations of our market and volatility of the market price of our stock, investors may face difficulties in selling shares at attractive prices when they want to. The average daily trading volume for our stock has varied significantly from week to week and from month to month, and the trading volume often varies widely from day to day.

The market of cost effective renewable energy that leaves no mark on the environment is as broad as the world’s need for energy. If and when our cold fusion program results in a practicable technology, fusion modules will be designed for integration into a wide range of commercial products and technologies. For8

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We incur significant expenses as a result of the Sarbanes-Oxley Act of 2002, which 7expenses may continue to negatively impact our financial performance. We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. Compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002, as discussed in the following risk factor, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly. Further, expenses related to our compliance may increase in the future, as legislation affecting smaller reporting companies comes into effect that may negatively impact our financial performance to the point of having a material adverse effect on our results of operations and financial condition.

~~example, the~~Our ~~first~~internal ~~low-tech~~controls ~~heat~~over ~~producing~~financial ~~modules~~reporting ~~will~~are not be ~~suited~~considered ~~for~~effective, awhich ~~wide~~could ~~variety~~result in a loss of ~~domestic~~investor ~~and~~confidence in our ~~industrial~~financial ~~heating~~reports ~~uses~~and ~~ranging~~in ~~from~~turn ~~hot~~have ~~water~~an ~~and~~adverse ~~room~~effect ~~heaters~~on toour ~~industrial~~stock ~~process heat~~price. AsPursuant ~~more~~to ~~highly~~Section ~~developed,~~404 ~~multi~~of the Sarbanes-~~kilowatt~~Oxley ~~devices~~Act ~~gradually~~of ~~permeate~~2002 ~~society~~we are required to furnish a report by our management on our internal controls over financial reporting. Such report must contain, weamong ~~expect~~other matters, an ~~enormous~~ ~~demand~~assessment ~~for~~of ~~this~~the ~~technology~~effectiveness ~~which~~of ~~will~~our beinternal ~~capable~~controls over financial reporting as of ~~producing~~the ~~energy~~end atof the year, including a ~~fraction~~statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. Since we have been unable to assert that our internal controls are effective, our investors could lose confidence in the accuracy and completeness of ~~current~~our ~~costs~~financial ~~with~~reports, nowhich ~~harmful~~in ~~environmental~~turn ~~effects~~could cause our stock price to decline.

~~Patents,~~If the market price of our common stock declines as the selling security ~~Trademarks,~~holders ~~Licenses,~~sell ~~Franchises,~~their ~~Concessions~~stock, ~~Royalty~~selling ~~Agreements~~security ~~and~~holders ~~Labor~~or others may be ~~Contracts~~encouraged to engage in short selling, depressing the market price.

~~Other~~The ~~than those~~significant ~~patents~~downward ~~associated~~pressure ~~with~~on athe ~~technology~~price ~~that~~of wethe ~~are~~common nostock ~~longer~~as ~~exploring,~~the weselling ~~currently have~~security noholders ~~patents,~~sell ~~trademarks,~~material ~~licenses,~~amounts ~~franchises,~~of ~~concessions,~~common ~~royalty~~stock ~~agreements~~could orencourage ~~labor contracts.~~short ~~However,~~sales weby dothe ~~intend~~selling tosecurity ~~pursue patents for a wide variety of devices,~~holders ~~materials,~~or ~~and~~others. ~~methods~~Short ~~that~~selling ~~are~~is ~~intrinsic~~the ~~components~~selling of ~~the~~a ~~technology~~security ~~used~~that ~~to develop solid-state fusion modules in~~ the ~~event~~seller wedoes ~~are~~not ~~able~~own, toor ~~resume~~any ~~research~~sale ~~and~~that ~~development activities~~is ~~However,~~completed ~~since~~by ~~1989,~~the ~~hundreds~~delivery of ~~researchers~~a ~~have~~security ~~filed~~borrowed aby ~~large~~the ~~number~~seller. ofShort ~~mostly broad~~sellers ~~speculative~~assume ~~and~~that ~~theoretical~~they ~~patents~~will inbe ~~this~~able ~~field~~to inbuy the ~~U.S.~~stock ~~and~~at ~~other~~a ~~patent venues.~~lower ~~Very~~amount ~~few~~than ~~patents~~the ~~have~~price ~~been~~at ~~allowed~~which inthey ~~the~~sold ~~field~~it ~~and~~short. ~~there~~Significant isshort aselling ~~consensus~~of ~~among~~a ~~many patent~~company’s ~~experts~~stock ~~that~~creates ~~the~~an ~~field~~incentive ~~has,~~for ~~and~~market ~~will~~participants ~~continue~~ to ~~have,~~reduce athe ~~very~~value ~~confusing~~of ~~patent~~that ~~landscape.~~company’s Incommon ~~light~~stock. ofIf ~~this, we have chosen~~ a ~~patent~~significant ~~strategy~~market ~~that~~for ~~focuses~~short onselling ~~filing~~our ~~for narrowly~~common ~~defined~~stock ~~working~~develops, ~~devices~~the ~~that~~market ~~can~~price ~~receive~~of ~~patent~~our ~~protection~~common ~~based~~stock oncould ~~demonstration of~~be ~~working~~significantly ~~utility~~depressed.

~~Governmental~~The ~~and~~Company’s ~~Environmental~~shareholders ~~Regulation~~may face significant restrictions on their stock.

The Company’s ~~operations~~stock ~~remain~~differs ~~subject~~from tomany astocks ~~variety~~in ofthat ~~national,~~it ~~federal,~~is ~~state~~a ~~and local~~“penny ~~laws,~~stock.” ~~rules~~The ~~and~~Commission ~~regulations~~has ~~relating~~adopted ~~to,~~a ~~among~~number ~~other~~of ~~things,~~rules ~~worker~~to ~~safety~~regulate ~~and~~“penny ~~the~~stocks” ~~use~~including, ~~storage,~~but ~~discharge~~not ~~and~~limited ~~disposal of environmentally sensitive materials. However~~to, ~~each one~~those ofrules from the ~~Company’s~~Securities ~~projects~~Act ~~was~~as ~~designed to produce environmentally “green” products for which there are no specific environmental regulations.~~follows:

~~During~~3a51-1 which ~~2007 the~~defines ~~Company~~penny ~~was~~stock inas, ~~full~~generally ~~compliance~~speaking, ~~with~~those ~~the~~securities ~~Resource~~which ~~Conservation~~are ~~Recovery~~not ~~Act (“RCRA”),~~listed ~~the~~on ~~key~~either ~~legislation~~NASDAQ ~~dealing~~or ~~with~~a ~~hazardous~~national ~~waste~~securities ~~generation, management~~exchange and ~~disposal.~~are ~~Nonetheless, under some of the laws regulating the use, storage,~~priced ~~discharge~~under ~~and disposal of environmentally sensitive materials~~$5, anexcluding ~~owner~~securities ~~or lessee~~ of ~~real estate~~issuers ~~may~~that behave ~~liable~~net ~~for~~tangible ~~the~~assets ~~costs~~greater ofthan ~~removal~~$2 ormillion ~~remediation~~if ofthey ~~certain~~have ~~hazardous~~been ~~or toxic substances located on or~~ in, oroperation ~~emanating~~at ~~from,~~least ~~such~~three ~~property~~years, asgreater ~~well~~than as$5 ~~related~~million ~~costs~~if ~~of investigation~~in ~~and~~operation ~~property~~less ~~damage.~~than ~~Laws~~three ofyears, ~~this nature often impose liability without regard to whether the owner~~ or ~~lessee~~average ~~knew~~revenue of, orat ~~was~~least ~~responsible~~$6 million for, the ~~presence~~last ~~of hazardous~~three ~~or toxic substances.~~years;

~~Since the Company’s solid~~15g-~~state~~1 which ~~fusion~~outlines ~~reactions~~transactions ~~have~~by ~~not~~broker/dealers ~~produced~~which ~~the~~are ~~radiation~~exempt ~~and radioactive~~from ~~waste~~15g-2 ~~products~~through ~~commonly~~15g-6 ~~associated~~as ~~with~~those ~~other~~whose ~~forms~~commissions offrom ~~nuclear~~traders ~~energy~~are ~~there~~lower ~~has been~~than no5% ~~nuclear~~total hazard whatever associated with this energy source, and consequently there have been no dangerous waste products, waste management concerns or additional regulation pursuant to environmental laws.commissions;

~~The~~15g-2 which ~~Company believes~~details that webrokers ~~are~~must indisclose ~~compliance~~risks inof ~~all~~penny ~~material~~stock respects with all laws, rules, regulations and requirements that affect our business. Further, we believe that compliance with such laws, rules, regulations and requirements does not impose a material impediment on ~~our~~Schedule ~~ability to conduct business.~~15G;

~~Research~~ 15g-3 which details that broker/dealers must disclose quotes and ~~Development~~other information relating to the penny stock market;

During the years ended December 31, 2007 and 2006, the Company spent $186,511 and $224,892, respectively, on research and development activities. We cannot anticipate the amount of spending on research and development in the future; such level will depend upon on success in raising additional financing and our progress with ongoing development projects in relation to the nature of future businesses that we may incubate.9

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815g-4 which explains that compensation of broker/dealers must be disclosed;

~~Employees~~15g-5 which explains that compensation of persons associated in connection with penny stock sales must be disclosed;

~~The~~15g-6 which ~~Company currently~~outlines ~~has~~that nobroker/dealers ~~employees~~must ~~and~~send 2out ~~full~~monthly ~~time~~account ~~consultants.~~statements; ~~The Company also relies on the services of outside consultants, attorneys,~~ and ~~accountants as necessary, to satisfy public disclosure requirements and to pursue the Company’s plan of operation.~~

~~Reports to~~15g-9 which ~~Security~~defines ~~Holders~~sales practice requirements.

~~The~~ Since the Company’s ~~annual~~securities ~~report~~constitute ~~contains~~a ~~audited~~“penny ~~financial~~stock” ~~statements.~~within Wethe ~~are~~meaning ~~not~~of ~~required~~the ~~to deliver~~rules, anthe ~~annual~~rules ~~report~~would apply to ~~security~~us ~~holders~~ and ~~will~~our ~~not~~securities. ~~automatically~~Because ~~deliver~~these arules ~~copy~~provide ofregulatory ~~the~~burdens ~~annual~~upon ~~report~~broker-dealers, tothey ~~our~~may ~~security~~affect ~~holders~~the ~~unless~~ability aof ~~request~~shareholders isto ~~made~~sell ~~for~~their ~~such~~securities ~~delivery.~~in ~~We file~~any ~~all~~market ofthat ~~our~~may ~~required~~develop; ~~reports~~the ~~and~~rules ~~other~~themselves ~~information~~may ~~with~~limit the market ~~Securities~~for ~~and~~penny ~~Exchange Commission~~stocks. (Additionally, the ~~“Commission”).~~market ~~The~~among ~~public~~dealers may ~~read~~not ~~and~~be ~~copy~~active. ~~any~~Investors ~~materials~~in ~~that~~ penny stock often are ~~filed~~unable byto sell stock back to the ~~Company~~dealer ~~with~~that sold them the ~~Commission~~stock. atThe mark-ups or commissions charged by the ~~Commission’s~~broker-dealers ~~Public~~may ~~Reference Room~~be atgreater ~~450~~than ~~Fifth~~any ~~Street,~~profit ~~N.W.,~~a ~~Washington,~~seller ~~D.C.~~may ~~20549~~make. ~~The~~Because ~~public~~of ~~may~~large ~~obtain~~dealer ~~information on~~spreads, ~~the~~investors ~~operation~~may ofbe ~~the~~unable ~~Public~~to ~~Reference~~sell ~~Room~~the bystock ~~calling~~immediately back to the ~~Commission~~dealer at ~~1-800-SEC-0330.~~the same price the dealer ~~The~~sold ~~statements~~the ~~and~~stock ~~forms~~to ~~filed~~the byinvestor. usIn ~~with~~some cases, the ~~Commission~~stock ~~have~~may ~~also~~fall ~~been~~quickly ~~filed electronically~~in ~~and~~value. ~~are~~Investors ~~available~~may ~~for~~be ~~viewing~~unable orto ~~copy~~reap onany ~~the~~profit ~~Commission~~from ~~maintained~~any ~~Internet site~~sale ~~that~~of ~~contains~~the ~~reports~~stock, ~~proxy~~if ~~and~~they ~~information~~can ~~statements,~~sell ~~and~~it ~~other~~at ~~information regarding~~all. ~~issuers~~Shareholders ~~that~~should ~~file~~be ~~electronically~~aware ~~with~~that, ~~the~~according to Commission Release No. ~~The~~34-29093 ~~Internet~~dated ~~address~~April 17, 1991, the market for ~~this~~ ~~site~~penny ~~can~~stocks behas ~~found~~suffered atfrom patterns of fraud and abuse. These patterns include: ~~http://www.sec.gov.~~

~~ITEM~~· ~~1A.~~control ~~RISK~~of ~~FACTORS~~the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

~~The Company’s~~· ~~operations~~manipulation ~~and~~of ~~securities~~prices ~~are~~through ~~subject~~prearranged tomatching ~~a number~~ of ~~risks.~~purchases ~~Below we have identified~~ and ~~discussed~~sales ~~the material risks that we are likely to face. Should any of the following risks occur, they will adversely affect our operations, business, financial condition~~ and~~/or~~ ~~operating~~false ~~results as well as the future trading price~~ and~~/or~~ ~~the~~misleading ~~value~~press ~~of our securities.~~releases;

~~Risks Related~~· to“boiler ~~the~~room” ~~Company’s~~practices ~~Business~~involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

~~The company’s~~· ~~ability~~excessive toand ~~continue~~undisclosed asbid-ask adifferentials ~~going~~and ~~concern~~markups isby inselling ~~question~~broker-dealers; and

~~The Company’s~~· ~~auditors~~the ~~included~~wholesale andumping ~~explanatory statement in Note 2~~ of ~~their report of financial statements for~~ the ~~years~~same ~~ended~~securities ~~December~~by ~~31,~~promoters ~~2007~~ and ~~2006,~~broker-dealers ~~stating~~after ~~that~~prices ~~there~~have ~~are certain~~been ~~factors~~manipulated ~~which raise substantial doubt about the Company’s ability~~ to ~~continue as~~ a ~~going~~desired ~~concern.~~level, ~~These~~along ~~factors~~with ~~include~~the asinevitable ~~lack~~collapse of ~~revenue~~those ~~generating~~prices ~~activities~~with inconsequent ~~place and~~investor losses ~~since inception~~.

~~Since February~~ITEM ~~22,~~1B. ~~2008,~~UNRESOLVED ~~our~~STAFF ~~majority owned subsidiary Planktos has essentially suspended all operations and its ability to continue is in doubt.~~COMMENTS

~~Subsequent to~~Not the year ended December 31, 2007, Planktos suspended “iron-fertilization” prove out efforts and commenced efforts to wind down its operations including the sale of assets and termination of employeesapplicable. ~~Planktos’ limited financial resources and absence of ongoing business operations place its, and our own, ongoing operation in doubt.~~

~~We have~~ITEM a2. ~~history of significant operating losses and such losses may continue in the future~~PROPERTIES

~~Since~~The ~~our inception~~Company’s inmaintains ~~1994,~~an ~~our~~office ~~operations~~located ~~have~~at ~~resulted~~73200 inEl aPaseo, ~~continuation~~Suite of2H, ~~losses~~Palm ~~and~~Desert, ~~an accumulated~~California, ~~deficit~~92260, for which ~~reached~~the ~~$15,344,225~~Company atpays ~~December~~no ~~31, 2007~~rent. The Company ~~has~~does ~~never realized~~not ~~revenue~~believe ~~from~~that ~~operations.~~it We will ~~continue~~need to ~~incur~~maintain ~~operating losses Our only~~any ~~expectation~~additional ofoffice ~~future~~space ~~profitability~~at isany ~~dependent~~time ~~upon~~in the ~~success~~foreseeable offuture ~~our subsidiaries’~~in ~~programs~~order ~~and~~to ~~research~~carry ~~and~~out ~~development.~~the ~~Therefore,~~plan ~~we may~~of ~~never~~operation bedescribed ~~able to achieve profitability~~herein.

~~Our business~~ITEM ~~will~~3. ~~not~~LEGAL ~~likely be profitable in the next twelve months and may never be profitable.~~PROCEEDINGS

~~Our research~~Legal proceedings were initiated by Mary Ruth Ladd against the Company, Planktos Corp. and ~~development~~certain ~~operations~~individuals ~~are~~affiliated ~~either~~to ~~suspended~~the orCompany ~~remain~~on October 3, 2007 in the ~~early~~Superior ~~development~~Court of the State of ~~stage~~California, County of San Francisco in connection with allegations of discrimination and asretaliation ~~such~~against wea ~~have~~whistle ~~limited~~blower, ~~expectation~~wrongful termination, fraud, breach of ~~realizing~~contract, ~~profitable~~wrongful ~~operations~~business ~~within~~acts and intentionally causing injury in the ~~next~~ ~~twelve~~workplace. ~~months~~The orclaim ~~ever~~seeks $58,280 in lost wages in addition to certain employee benefits and punitive damages. ~~Any~~The ~~possibility~~Company ofhas ~~future~~retained ~~profit~~counsel asto ~~the~~respond ~~result~~to ofthese ~~our operations~~allegations ~~remains~~and ~~purely~~denies ~~speculative~~any liability for these alleged causes of action.

910

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~~We will~~ITEM ~~need~~4. ~~additional~~SUBMISSION ~~financing~~OF toMATTERS ~~fund~~TO ~~our~~A ~~businesses.~~VOTE OF SECURITY HOLDERS

WeNo ~~will need~~matter ~~additional~~was ~~capital~~submitted to ~~resume~~a ~~our~~vote ~~research~~of ~~and~~the ~~development~~security ~~operations In our efforts to raise capital or obtain additional financing~~holders, wethrough ~~may~~the besolicitation ~~obligated to issue additional shares~~ of ~~common~~proxies ~~stock~~ or ~~warrants~~otherwise, orduring ~~other~~the ~~rights~~fourth toquarter ~~acquire~~ended ~~common~~December ~~stock on terms that will result in dilution to existing shareholders or place restrictions on operations. If adequate funds are not available or are not available on acceptable terms~~31, ~~our ability to fund our operations would be significantly limited~~2008.

~~Risks Related~~PART ~~to the Company’s Stock~~II

~~The market~~ITEM ~~for~~5. ~~our~~MARKET ~~stock~~FOR isCOMMON ~~limited~~EQUITY, ~~and~~RELATED ~~our~~STOCKHOLDER ~~stock~~MATTERS, ~~price~~AND ~~may~~ISSUER bePURCHASES ~~volatile.~~OF EQUITY SECURITIES

The ~~market for~~Company's ~~our~~ common stock ~~has~~is ~~been~~quoted ~~limited~~on ~~due~~the toOver ~~low~~the ~~trading~~Counter ~~volume~~Bulletin ~~and~~Board, a service maintained by the ~~small~~National ~~number~~Association of ~~brokerage~~ ~~firms~~Securities ~~acting~~Dealers, asInc. ~~market~~under ~~makers~~the symbol “SLRE”. ~~Because~~Trading ofin the ~~limitations~~common ofstock ~~our~~in the over-the-counter market has been limited and sporadic and the quotations set forth below are not ~~volatility~~necessarily indicative of ~~the~~actual market ~~price~~conditions. ofFurther, ~~our~~these ~~stock,~~prices ~~investors~~reflect ~~may~~inter-dealer ~~face~~prices ~~difficulties~~without inretail ~~selling shares~~mark-up, atmark-down, ~~attractive~~or ~~prices~~commission, ~~when~~and ~~they~~may ~~want~~not tonecessarily reflect actual transactions. The ~~average~~following ~~daily~~table ~~trading~~sets ~~volume~~forth for ~~our stock~~the ~~has~~periods ~~varied~~indicated ~~significantly~~the ~~from~~high ~~week~~and tolow ~~week~~bid ~~and~~prices ~~from~~for ~~month~~the tocommon ~~month,~~stock ~~and~~as ~~the~~reported ~~trading volume~~each ~~often~~quarterly ~~varies~~period ~~widely~~within ~~from~~the ~~day~~last totwo ~~day~~fiscal years.

We may incur significant expenses as a result of being quoted on the Over the Counter Bulletin Board, which may negatively impact our financial performance.

*Year*	*Quarter Ending*	*High*	*Low*
2008	December 31	$0.11	$0.04
	September 30	$0.20	$0.05
	June 30	$0.22	$0.08
	March 31	$0.23	$0.09
2007	December 31	$0.37	$0.11
	September 30	$0.56	$0.33
	June 30	$0.59	$0.43
	March 31	$0.64	$0.38

WeCapital incur significant legal, accounting and other expenses as a result of being listed on the Over the Counter Bulletin Board. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission has required changes in corporate governance practices of public companies. We expect that compliance with these laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor, may substantially increase our expenses, including our legal and accounting costs, and make some activities more time-consuming and costly. As a result, there may be a substantial increase in legal, accounting and certain other expenses in the future, which would negatively impact our financial performance and could have a material adverse effect on our results of operations and financial condition.Stock

~~Our internal~~The ~~controls~~following ~~over~~is ~~financial~~a ~~reporting~~summary ~~may~~of ~~not~~the bematerial ~~considered~~terms ~~effective~~of in the ~~future, which~~Company’s ~~could~~capital ~~result~~stock. inThis asummary ~~loss~~is ofsubject ~~investor~~to ~~confidence in our financial reports~~ and inqualified ~~turn have~~by anour ~~adverse~~articles ~~effect~~of onincorporation ~~our~~and ~~stock price~~bylaws.

~~Pursuant~~Common to Section 404 of the Sarbanes-Oxley Act of 2002 we are required to furnish a report by our management on our internal controls over financial reporting. Such report must contain, among other matters, an assessment of the effectiveness of our internal controls over financial reporting as of the end of the year, including a statement as to whether or not our internal controls over financial reporting are effective. This assessment must include disclosure of any material weaknesses in our internal controls over financial reporting identified by management. If we are unable to continue to assert that our internal controls are effective, our investors could lose confidence in the accuracy and completeness of our financial reports, which in turn could cause our stock price to decline.Stock

As of April 14, 2009 there were 437 shareholders of record holding a total of 18,423,309 shares of fully paid and non-assessable common stock of the 50,000,000 shares of common stock, par value $0.0001, authorized. The board of directors believes that the number of beneficial owners is substantially greater than the number of record holders because a portion of our outstanding common stock is held in broker “street names” for the benefit of individual investors. The holders of the common stock are ~~Company~~entitled ~~does~~to ~~not~~one ~~pay~~vote ~~dividends~~for each share held of record on all matters submitted to a vote of stockholders. Holders of the common stock have no preemptive rights and no right to convert their common stock into any other securities. There are no redemption or sinking fund provisions applicable to the common stock.

The Company does not pay dividends. We have not paid any dividends since inception and have no intention of paying any dividends in the foreseeable future. Any future dividends would be at the discretion of our board of directors and would depend on, among other things, future earnings, our operating and financial condition, our capital requirements, and general business conditions. Therefore, shareholders should not expect any type of cash flow from their investment.11

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10Preferred Stock

The Company ~~will~~has ~~require~~no ~~additional~~authorized ~~capital~~shares ~~funding.~~of preferred stock

There can be no guarantee that we will not require additional funds, either through additional equity offerings or debt placements, in order to expand our operations. Such additional capital may result in dilution to our current shareholders. Further, our ability to meet short-term and long-term financial commitments will depend on future cash. There can be no assurance that future income will generate sufficient funds to enable us to meet our financial commitments.Warrants

~~The Company’s~~As ~~shareholders~~of ~~may~~April ~~face~~14, ~~significant~~2009 ~~restrictions~~the onCompany ~~their~~had 1,250,000 outstanding warrants to purchase shares of our common stock.

~~The Company’s~~Stock stock differs from many stocks in that it is a “penny stock.” The Commission has adopted a number of rules to regulate “penny stocks” including, but not limited to, those rules from the Securities Act as follows:Options

~~3a51-1~~As ~~which~~of ~~defines~~April ~~penny stock as~~14, ~~generally~~2009 ~~speaking,~~the ~~those~~Company ~~securities~~had ~~which are not listed on either NASDAQ or a national securities exchange and are priced under $5~~500,000 ~~excluding~~outstanding ~~securities~~stock ofoptions ~~issuers~~to ~~that~~purchase ~~have~~shares ~~net tangible assets greater than $2 million if they have been in operation at least three years, greater than $5 million if in operation less than three years, or average revenue~~ of atour ~~least~~common ~~$6 million for the last three years;~~stock.

~~15g-1~~Convertible ~~which outlines transactions by broker/dealers which are exempt from 15g-2 through 15g-6 as those whose commissions from traders are lower than 5% total commissions;~~Securities

~~15g-2~~As ~~which~~of ~~details~~April ~~that~~14, ~~brokers~~2009 ~~must~~the ~~disclose~~Company ~~risks~~had ofno ~~penny~~outstanding ~~stock~~securities, onother ~~Schedule~~than ~~15G;~~warrants and options, convertible into shares of the Company’s stock.

~~15g-3 which details that broker/dealers must disclose quotes and other information relating to the penny stock market;~~Dividends

~~15g-4~~The ~~which~~Company ~~explains~~has ~~that~~not ~~compensation~~declared any cash dividends since inception and does not anticipate paying any dividends in the near future. The payment of ~~broker/dealers~~cash ~~must~~dividends beis ~~disclosed;~~within the discretion of the board of directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Company's ability to pay cash dividends on its common stock other than those generally imposed by applicable state law.

~~15g-5~~Transfer ~~which~~Agent ~~explains~~and ~~that compensation of persons associated in connection with penny stock sales must be disclosed;~~Registrar

~~15g-6~~Our ~~which~~transfer ~~outlines~~agent ~~that~~is ~~broker/dealers~~Michael ~~must~~Anzeman ~~send~~at ~~out~~Madison ~~monthly~~Stock ~~account~~Transfer, ~~statements;~~Inc., ~~and~~located at 1688 East 16th Street, Suite 7, Brooklyn, New York, 11229. His phone number is (718) 627-4453.

~~15g-9~~Purchases ~~which~~of ~~defines~~Equity ~~sales~~Securities ~~practice~~made ~~requirements.~~by the Issuer and Affiliated Purchasers

~~Since the Company’s securities constitute a “penny stock” within the meaning of the rules, the rules would apply to us and our securities~~None. Because these rules provide regulatory burdens upon broker-dealers, they may affect the ability of shareholders to sell their securities in any market that may develop; the rules themselves may limit the market for penny stocks. Additionally, the market among dealers may not be active. Investors in penny stock often are unable to sell stock back to the dealer that sold them the stock. The mark-ups or commissions charged by the broker-dealers may be greater than any profit a seller may make. Because of large dealer spreads, investors may be unable to sell the stock immediately back to the dealer at the same price the dealer sold the stock to the investor. In some cases, the stock may fall quickly in value. Investors may be unable to reap any profit from any sale of the stock, if they can sell it at all. Shareholders should be aware that, according to Commission Release No. 34-29093 dated April 17, 1991, the market for penny stocks has suffered from patterns of fraud and abuse. These patterns include:

•Recent ~~control~~Sales of ~~the~~Unregistered ~~market for the security by one or a few broker-dealers that are often related to the promoter or issuer;~~Securities

~~• manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;~~None.

•ITEM ~~“boiler~~6. ~~room”~~SELECTED ~~practices~~FINANCIAL ~~involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;~~DATA

•Not ~~excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and~~required.

• the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.12

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11ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM~~This 1BManagement’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this current report contain forward-looking statements that involve risks and uncertainties. ~~UNRESOLVED~~Forward-looking ~~STAFF~~statements ~~COMMENTS~~can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this current report. Our fiscal year end is December 31.

~~Not applicable.~~Discussion and Analysis

~~ITEM~~The 2Company’s plan of operation for the coming year is to identify and acquire a favorable business opportunity through merger or acquisition. ~~PROPERTIES~~We have not yet entered into any agreement, nor do we have any commitment or understanding to enter into or become engaged in any transaction, as of the date of this filing.

The Company’s ~~maintains~~plan anof ~~office~~operation ~~located~~over atthe ~~145-925~~next ~~West~~twelve ~~Georgia~~months ~~Street,~~will ~~Vancouver, British~~require ~~Columbia~~a minimum of $100,000 ~~Canada~~to ~~V6C~~identify ~~3L2.~~a ~~The~~suitable ~~facility~~business ~~consists~~opportunity offor ~~approximately~~development ~~1,100~~through ~~square~~merger ~~feet, for~~or ~~which~~acquisition. Should the Company ~~pays~~decide ~~approximately~~to $2develop a business opportunity through merger or acquisition,~~700~~ aour ~~month~~funding requirements will change. ~~The~~We ~~term~~will ofalso ~~the~~require ~~Company’s lease~~up isto ~~five~~$1,000,000 ~~years~~to ~~terminating~~satisfy atamounts ~~the~~payable. ~~end~~Financing ofto ~~April~~meet inthese ~~2009~~cash requirements is not currently available.

~~The~~Results ~~Company maintains office and research and development space for D2Fusion at 112 C Longview Drive, Los Alamos, New Mexico, 87544. The facility consists~~ of ~~approximately 2,000 square feet,~~Operations ~~for which the Company pays $2,000 a month. The term of the Company’s lease is on a month to month basis.~~

~~The Company’s~~During ~~majority~~the ~~owned~~year ~~subsidiary~~ended December 31, ~~Planktos~~2008, ~~maintains~~the anCompany ~~office~~was ~~located~~focused aton ~~1151 Triton~~(i) ~~Drive,~~suspending ~~Suite~~research C,and ~~Foster~~development ~~City,~~activities ~~California~~in ~~94404~~connection ofwith ~~approximately~~cold 4fusion technologies,~~800~~ ~~square~~including ~~feet~~closing its Los Alamos, New Mexico research ~~which~~facility, ~~office~~(ii) ~~was~~winding ~~shared~~down ~~with~~its ~~D2Fusion,~~intended ~~Inc.~~carbon ~~The~~sequestration ~~Company~~business ~~paid~~in ~~$30,445~~connection ~~during~~with ~~2007~~its ~~and $21~~formerly majority owned subsidiary,~~340~~ ~~during~~Planktos ~~2006~~Corp., ~~for~~including the ~~use~~disposing of ~~this~~its research ~~space.~~vessel ~~The~~and ~~lease~~essentially isall onof aits ~~month~~other toassets, ~~month~~(iii) ~~basis~~pursued ~~and notice~~financing ~~has~~commitments ~~been~~for ~~given~~its plan of ~~Planktos’~~operation, ~~intent~~(iv) tobeginning ~~vacate~~ the ~~premises~~search asfor ofa ~~April~~business 30opportunity to develop through merger or acquisition, ~~2008~~ and (v) satisfying continuous public disclosure requirements.

~~ITEM~~The 3Company has not generated any revenues since inception. ~~LEGAL~~Since ~~PROCEEDINGS~~we have suspended operations and have no current ability to generate revenue, we expect to continue to incur losses for the foreseeable future.

~~Legal proceedings~~Net ~~were initiated by Mary Ruth Ladd against the Company, Planktos and certain~~Income/Loss individuals affiliated to the Company on October 3, 2007 in the Superior Court of the State of California, County of San Francisco in connection with allegations of discrimination and retaliation against a whistle blower, wrongful termination, fraud, breach of contract, wrongful business acts and intentionally causing injury in the workplace. The claim seeks $58,280 in lost wages in addition to certain employee benefits and punitive damages. The Company has retained counsel to respond to these allegations and denies any liability for these alleged causes of action.

~~ITEM~~For 4the period from January 5, 1994 (inception) to December 31, 2008 the Company recorded a net loss of $14,978,690. ~~SUBMISSION~~Net OFincome ~~MATTERS~~for TOthe year Aended ~~VOTE~~December OF31, ~~SECURITY~~2008 ~~HOLDERS~~was $395,834 as compared to net losses of $3,259,823 for the year ended December 31, 2007. Net income in the current period can be attributed to the sale of our research vessel related to our Planktos Corp.’s “iron-fertilization” program. Further, the loss from our continuing operations decreased as a result of the suspension of both our “cold fusion” research and development program and our “iron-fertilization” prove out program which primarily resulted in a decrease in general and administrative expenses and research and development expenses. We expect to continue to incur losses over the next twelve months as the Company seeks out another business opportunity for development through merger or acquisition.

~~No matter was submitted to a vote of the security holders, through the solicitation of proxies or otherwise, during the fourth quarter ended December 31, 2007.~~13

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~~PART II~~Income Tax Expense (Benefit)

~~ITEM~~The 5.Company ~~MARKET~~may ~~FOR~~have ~~COMMON~~a ~~EQUITY,~~prospective ~~RELATED~~income ~~STOCKHOLDER~~tax ~~MATTERS,~~benefit ~~AND~~resulting ~~ISSUER~~from ~~PURCHASES~~a OFnet ~~EQUITY~~operating ~~SECURITIES~~loss carryforward and start up costs that could offset future operating profits.

12Impact of Inflation

The Company's ~~common~~believes ~~stock~~that isinflation ~~quoted~~has onhad ~~the~~a ~~Over~~negligible ~~the~~effect ~~Counter~~on ~~Bulletin~~operations ~~Board under the symbol “SLRE” Trading in the common stock in the~~ over~~-the-counter~~ ~~market has been limited and sporadic and~~ the ~~quotations~~past ~~set~~three ~~forth below are not necessarily indicative of actual market conditions~~years. Further, these prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. The high and low bid prices for the common stock for each quarter of the years ended December 31, 2007 and 2006 are as follows:

Year	Quarter Ending	High	Low
2007	December 31	$0.37	$0.11
	September 30	$0.56	$0.33
	June 30	$0.59	$0.43
	March 31	$0.64	$0.38
2006	December 31	$0.75	$0.40
	September 30	$1.01	$0.37
	June 30	$1.09	$0.46
	March 31	$1.34	$0.48

Capital Expenditures

~~Capital~~During the year ended December 31, 2007 Planktos Corp., the Company’s former majority owned subsidiary, purchased a research vessel for $800,000 which vessel was sold during the year ended December 31, 2008 for $1,000,000. Otherwise, the Company has expended ~~Stock~~no significant amount on capital expenditures for the period from inception to December 31, 2008.

~~The following~~Liquidity ~~is a summary of the material terms of the Company’s capital stock. This summary is subject to~~ and ~~qualified~~Capital ~~by our articles of incorporation and bylaws.~~Resources

The Company is in the development stage and, since inception, has experienced significant changes in liquidity, capital resources and stockholders’ equity. We have been funded since inception from public or private debt or equity placements ~~Common~~or ~~Stock~~by major shareholders in the form of loans. All of our projects have been experimental in nature and virtually all of the financing raised to date has been either allocated for or related to research and the development activities.

AsThe ofCompany ~~April 14,~~had ~~2008,~~a ~~there~~working ~~were~~capital ~~460~~deficit ~~shareholders~~ of ~~record~~$1,051,357 ~~holding~~as ~~a total~~ of 21December 31,~~923,309~~ ~~shares~~2008. ~~of fully~~Our ~~paid~~current and ~~non-assessable~~total ~~common~~assets ~~stock~~were ~~of the 50~~$51,~~000~~686,~~000~~ ~~shares~~consisting of ~~common~~cash ~~stock,~~of ~~par value~~ $~~0.0001~~13,853 ~~authorized.~~and ~~The~~other ~~board~~receivables of ~~directors believes that the number of beneficial~~ ~~owners~~$37,833. isOur ~~substantially~~current ~~greater~~liabilities ~~than~~totaled ~~the~~$1,067,043, ~~number~~which ofincluded ~~record holders because~~ a ~~portion~~note ofpayable ~~our outstanding~~to ~~common~~a ~~stock~~related isparty ~~held in broker “street names” for the benefit~~ of ~~individual~~ ~~investors.~~$376,521, ~~The~~advances ~~holders~~payable of ~~the~~$439,842, ~~common~~and ~~stock~~accounts ~~are~~payable ~~entitled~~with toaccrued ~~one~~expenses ~~vote for each share held~~ of ~~record~~$96,934. onLong ~~all~~term ~~matters~~liabilities ~~submitted~~totaled to$126,008. aNet ~~vote of~~ stockholders.' ~~Holders~~deficit ofin the ~~common~~ ~~stock~~Company ~~have~~was no$1,015,357 ~~preemptive~~as ~~rights~~of ~~and~~December no31, ~~right to convert their common stock into any other securities~~2008. ~~There are no redemption or sinking fund provisions applicable to the common stock.~~

Cash flow used in operating activities was $8,999,874 for the period from inception to December 31, 2008. Cash flow used in operating activities for the year ~~Preferred~~ended ~~Stock~~December 31, 2008 was $761,391 as compared to $3,556,256 for the year ended December 31, 2007. The decrease in cash flow used in operating activities in the current period was due primarily to a decrease in net losses.

~~The~~Cash ~~Company~~flow provided by investing activities was $3,040,494 for the period from inception to December 31, 2008. ~~has~~Cash noflow ~~authorized~~provided ~~shares~~by investing activities for the year ended December 31, 2008 was $1,000,749 as compared to $2,176,878 for the year ended December 31, 2007. Cash flows provided by investing activities in the current period can be attributed to the sale of ~~preferred~~the ~~stock~~research vessel formerly owned by Planktos Corp.

Cash flow provided by financing activities was $5,973,233 for the period from inception to December 31, 2008. Cash used in financing activities for the year ~~Warrants~~ended December 31, 2008 was $236,300 as compared to cash provided by financing activities of $1,186,261 for the year ended December 31, 2007. Cash flow used in financing activities in the current period can be attributed to the repayment of related party loans and advances as well as for discontinued operations.

~~As of April~~ 14~~, 2008, the Company had 1,781,500 outstanding warrants to purchase shares of our common stock.~~

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~~Stock~~The Company’s current assets are insufficient to conduct its plan of operation over the next twelve ~~Options~~months and it will have to seek additional debt or equity financing to fund operations. The Company has no current commitments or arrangements with respect to, or immediate sources of funding. Further, no assurances can be given that funding is available or available to the Company on acceptable terms. The Company’s shareholders would be the most likely source of new funding in the form of loans or equity placements though none have made any commitment for future investment and we have no agreement formal or otherwise. The Company’s inability to obtain funding has had a material adverse affect on our plan of operation and will continue to diminish our ongoing businesses.

AsThe ofCompany ~~April 14,~~does ~~2008,~~not expect to pay cash dividends in the foreseeable future. The Company had ~~500,000~~no ~~outstanding~~lines ~~stock~~of ~~options~~credit toor ~~purchase~~other ~~shares~~bank offinancing ~~our~~arrangements. ~~common~~The ~~stock~~Company has no defined benefit plan or contractual commitment with any of its officers or directors.

~~Convertible~~The ~~Securities~~Company has no current plans for the purchase or sale of any plant or equipment.

AsThe ~~of April 14, 2008, the~~ Company ~~had~~currently has no ~~outstanding~~employees ~~securities,~~and ~~other~~has ~~than~~no ~~warrants~~plans ~~and~~to ~~options, convertible~~hire ~~into~~any ~~shares~~employees ofin the ~~Company’s~~near ~~stock~~future.

Off Balance Sheet Arrangements 13

As of December 31, 2008 we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, ~~Dividends~~capital expenditures, or capital resources that is material to stockholders.

~~The~~Critical ~~Company has~~Accounting not declared any cash dividends since inception and does not anticipate paying any dividends in the near future. The payment of cash dividends is within the discretion of the board of directors and will depend on our earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Company's ability to pay cash dividends on its common stock other than those generally imposed by applicable state law.Policies

~~Transfer~~In the notes to the audited consolidated financial statements for the year ended December 31, 2008 included in the Company’s Form 10-K, the Company discussed those accounting policies that are considered to be significant in determining the results of ~~Agent~~operations and ~~Registrar~~our financial position. We believe that the accounting principles utilized by us conform to accounting principles generally accepted in the United States of America.

~~Our transfer~~The ~~agent~~preparation isof ~~Michael~~financial ~~Ajzernman~~statements atrequires ~~Madison~~management ~~Stock~~to ~~Transfer~~make ~~Agency~~significant estimates and judgments that affect the reported amounts of assets, ~~1688~~liabilities, ~~East~~revenues ~~16th~~and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. On an on-going basis, we evaluate our estimates, including those ~~Street~~related to bad debts, ~~Suite~~inventories, 7intangible assets, ~~Brooklyn~~warranty obligations, NYproduct ~~11229~~liability, ~~(718)~~revenue, ~~627-4453~~and income taxes. We base our estimates on historical experience and other facts and circumstances that are believed to be reasonable, and the results form the basis for making judgments about the carrying value of assets and liabilities. The actual results may differ from these estimates under different assumptions or conditions.

~~Purchases of Equity Securities made by the Issuer and Affiliated Purchasers~~15

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Going Concern ~~None.~~

~~Recent~~The Company’s independent public accounting firm has issued a report on our consolidated financial statements that expressed substantial doubt as to the Company’s ability to continue as a going concern as a result of recurring losses, lack of ~~Sales~~revenue-generating activities and an accumulated deficit of ~~Unregistered~~$14,978,690 ~~Securities~~as of December 31, 2008. The Company’s ability to continue as a going concern is subject to our ability to obtain funding from outside sources. Management’s plan to address our ability to continue as a going concern, include: (i) obtaining funding from private placement sources; (ii) obtaining additional funding from the sale of our securities; (iii) generating revenues from the development of a business opportunity through acquisition or merger; and (iv) obtaining loans and grants from various financial institutions, where possible. Although management believes that it will be able to obtain the necessary funding to allow us to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.

OnForward ~~October~~Looking 1,Statements ~~2007, the Company authorized the issuance of 100,000 units, each unit comprised of one common share~~ and ~~one~~Factors ~~purchase~~That ~~warrant~~May ~~with~~Affect anFuture ~~exercise~~Results ~~price of $0.40 for a period of 24 months to Zmax Capital Corporation, pursuant to exemptions from registration provided by Section 4(2)~~ and ~~Regulation~~Financial ~~S of the Securities Act of 1933 in exchange for cash consideration of $25,000 or $0.25 per unit. No commissions were paid in connection with this transaction.~~Condition

The ~~Company complied~~statements ~~with~~contained ~~Section~~in ~~4(2)~~the ~~based~~section ontitled ~~the~~Management’s ~~following~~Discussion ~~factors:~~and ~~(1)~~Analysis ~~the~~of ~~issuance~~Financial ~~was~~Condition anand ~~isolated~~Results of ~~private~~Operations, ~~transaction~~with ~~that~~the ~~did~~exception ~~not~~of ~~involve~~historical afacts, ~~public~~are ~~offering;~~forward ~~(2)~~looking ~~there~~statements. ~~was~~A ~~one~~safe-harbor ~~offeree~~provision ~~who was~~may ~~issued~~not ~~the~~be ~~stock~~applicable ~~for~~to ~~cash~~the ~~consideration;~~forward ~~(3)~~looking ~~the~~statements ~~offeree~~made ~~stated~~in anthis ~~intention~~current ~~not~~report ~~to resell~~Forward ~~the~~looking ~~stock;~~statements ~~(4)~~reflect ~~there~~our ~~were~~current noexpectations ~~subsequent~~and orbeliefs ~~contemporaneous~~regarding ~~public~~our ~~offerings~~future results of ~~the~~operations, performance, and achievements. These ~~stock;~~statements ~~(5)~~are ~~the~~subject ~~stock~~to ~~was~~risks ~~not~~and ~~broken~~uncertainties ~~down~~and ~~into~~are ~~smaller~~based ~~denominations;~~upon assumptions and ~~(6)~~beliefs ~~the negotiations~~ that ~~lead~~may toor ~~the~~may ~~issuance~~not ofmaterialize. ~~the~~These ~~stock~~statements ~~took~~include, ~~place~~but ~~directly~~are ~~between~~not ~~the~~limited ~~offeree and~~to, ~~the~~statements ~~Company.~~concerning:

~~Regulation S~~· ~~provides generally that any offer or sale that occurs outside of~~ the ~~United~~sufficiency ~~States is exempt from the registration requirements~~ of ~~the~~existing ~~Securities~~capital Act, provided that certain conditions are met. Regulation S has two safe harbors. One safe harbor applies to offers and sales by issuers, securities professionals involved in the distribution process pursuant to contract, their respective affiliates, and persons acting on behalf of any of the foregoing (the “issuer safe harbor”), and the other applies to resales by persons other than the issuer, securities professionals involved in the distribution process pursuant to contract, their respective affiliates (except certain officers and directors), and persons acting on behalf of any of the forgoing (the “resale safe harbor”). An offer, sale or resale of securities that satisfied allresources;

~~conditions of~~· ~~the~~our ~~applicable~~anticipated ~~safe~~financial ~~harbor is deemed to be outside the United States as required by Regulation S. The distribution compliance period for shares sold in reliance on Regulation S is one year.~~performance;

~~The~~ · our ~~Company complied~~ability ~~with the requirements of Regulation S by having no directed selling efforts made in the United States, by selling only~~ to anraise ~~offeree~~additional ~~who~~capital ~~was outside the United States at the time of the offering, and ensuring that the entity~~ to ~~whom~~fund ~~the~~cash ~~stock~~requirements ~~was~~for ~~issued~~future ~~was a non-U.S. person with an address in a foreign country.~~operations;

~~ITEM~~· 6.uncertainties ~~SELECTED~~related ~~FINANCIAL~~to ~~DATA~~the development of our technologies;

~~Not required.~~· the volatility of the stock market; and

14 · general economic conditions.

~~ITEM~~We 7wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated, including the factors set forth in the section entitled Risk Factors included elsewhere in this report. ~~MANAGEMENT’S~~We ~~DISCUSSION~~also ~~AND~~wish ~~ANALYSIS~~to OFadvise ~~FINANCIAL~~readers ~~CONDITION~~not ~~AND~~to ~~RESULTS~~place OFany ~~OPERATIONS~~undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other than is required by law.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this current report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as “anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include but are not limited to those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition below. The following discussion should be read in conjunction with our financial statements and notes thereto included in this current report. Our fiscal year end is December 31.16

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~~Discussion~~Stock-Based ~~and Analysis~~Compensation

~~The~~We ~~Company is~~have aadopted ~~research~~SFAS ~~and~~No. ~~development~~123 ~~incubator~~(revised ~~with~~2004) no(SFAS ~~revenues~~No. We123R), ~~have~~Share-Based ~~been~~Payment, ~~funded~~which ~~since~~addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are ~~inception~~based ~~from~~on ~~public~~the orfair ~~private~~value ~~debt~~of orthe enterprise’s equity ~~placements~~instruments or that may be settled by ~~major~~the ~~shareholders~~issuance inof such equity instruments. In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability to account for stock-based compensation transactions using the intrinsic value method under Accounting Principles Board (APB) Opinion No. ~~form~~25, ofAccounting ~~loans~~for Stock Issued to Employees, and instead generally requires that such transactions be accounted for using a fair-value-based method. ~~All~~We use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of ~~our~~stock-based ~~projects~~awards under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No. 123, Accounting for Stock-Based Compensation. We have ~~been~~elected ~~experimental~~the inmodified ~~nature~~prospective transition method as permitted by SFAS No. 123R and ~~virtually~~accordingly prior periods have not been restated to reflect the impact of SFAS No. 123R. The modified prospective transition method requires that stock-based compensation expense be recorded for all new and unvested stock options, restricted stock, restricted stock units, and employee stock purchase plan shares that are ultimately expected to vest as the requisite service is rendered beginning on January 1, 2006, the first day of our fiscal year 2006. Stock-based compensation ~~the~~expense ~~capital~~for ~~raised~~awards granted prior to January 1, 2006 is based on the grant date ~~has~~fair-value ~~been~~as ~~allocated~~determined under the pro forma provisions of SFAS No. 123. Prior to the adoption of SFAS No 123R, we measured compensation expense for ~~research~~our ~~and~~employee stock-based compensation plans using the ~~development~~intrinsic ~~activities~~value method prescribed by APB Opinion No. 25. We applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and ~~with~~Disclosure, ~~related~~as ~~administrative~~if ~~costs~~the fair-value-based method had been applied in measuring compensation expense. Under APB Opinion No. 25, when the exercise price of the Company’s employee stock options was equal to the market price of the underlying stock on the date of the grant, no compensation expense was recognized.

~~The~~We ~~Company~~account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the estimated fair market value of the ~~does~~consideration ~~not~~received ~~expect~~or tothe ~~receive~~estimated ~~revenues~~fair ~~within~~value of the ~~next~~equity ~~twelve~~instruments ~~months~~issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

~~Results of Operations~~17

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~~During~~Recent ~~the year~~Accounting ~~ended~~Pronouncements December 31, 2007, the Company was involved in developing innovative processes tied to the sequestration of CO2 and technologies related to replicating the energy produced from cold fusion. We also completed several private placements to fund this research and development, explored new business opportunities, and satisfied continuous public disclosure requirements.

~~Net~~In May, 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 163, “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60” (SFAS 163). This Statement requires that an insurance enterprise recognize a claim liability ~~Losses~~prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. Those clarifications will increase comparability in financial reporting of financial guarantee insurance contracts by insurance enterprises. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. This Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for some disclosures about the insurance enterprise’s risk-management activities. This Statement requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period (including interim periods) beginning after issuance of this Statement. Except for those disclosures, earlier application is not permitted. The adoption of this statement will have no material effect on the Company’s financial condition or results of operations. In May, 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 162, “The Heirarchy of Generally Accepted Accounting Principles” (SFAS No. 162). This Statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). The sources of accounting principles that are generally accepted are categorized in descending order of authority as follows:

~~For~~a. ~~the period~~FASB ~~from~~Statements ~~January~~of 5,Financial ~~1994~~Accounting toStandards ~~December~~and 31Interpretations, ~~2007~~FASB ~~the~~Statement ~~Company~~133 ~~recorded~~Implementation ~~a net loss of $15~~Issues,~~344,225.~~ ~~Net~~FASB ~~losses~~Staff ~~for the year ended December 31~~Positions, ~~2007~~and ~~were~~American ~~$3,229,524~~Institute asof ~~compared~~Certified ~~to $1,608,683~~Public ~~for~~Accountants ~~the~~(AICPA) ~~year~~Accounting ~~ended~~Research ~~December~~Bulletins ~~31,~~and ~~2006.~~Accounting ~~The~~Principles ~~increase~~Board inOpinions ~~net~~that ~~losses~~are innot ~~the~~superseded ~~current period~~by ~~can~~actions beof ~~primarily attributed to~~ the ~~loss from discontinued operations (to $1,624,310 from $0).~~FASB

~~General~~b. ~~and administrative~~FASB ~~expenses~~Technical ~~include~~Bulletins ~~accounting expenses~~and, ~~professional~~if ~~fees~~cleared ~~consulting~~by ~~fees and costs associated with~~ the ~~preparation~~FASB, ofAICPA ~~public~~Industry ~~disclosure~~Audit ~~documentation.~~and ~~Vessel~~Accounting ~~operating costs~~Guides ~~are~~and ~~related~~Statements toof ~~expenses~~Position ~~incurred by Planktos in refitting the Weatherbird II research ship. Research and development~~

~~expenses include~~c. ~~costs~~AICPA ~~associated~~Accounting ~~with~~Standards ~~our~~Executive ~~experiments~~Committee ~~with~~Practice ~~cold~~Bulletins ~~fusion~~that ~~and~~have been cleared by the ~~sequestration~~FASB, consensus positions of ~~CO2~~ inthe ~~marine~~FASB Emerging Issues Task Force (EITF), and ~~terrestrial~~the ~~environments.~~Topics discussed in Appendix D of EITF Abstracts (EITF D-Topics)

~~The~~d. ~~Company expects~~Implementation toguides ~~continue~~(Q&As) topublished ~~operate~~by atthe aFASB ~~loss~~staff, ~~through~~AICPA ~~fiscal~~Accounting ~~2008~~Interpretations, ~~due~~AICPA toIndustry ~~research~~Audit and ~~development~~ ~~costs~~Accounting inGuides ~~addition~~and toStatements ~~administrative~~of ~~expenses~~Position not cleared by the FASB, and practices that are widely recognized and prevalent either generally or in the industry.

~~Income~~The ~~Tax~~adoption ~~Expense~~of ~~(Benefit)~~this statement will have no material effect on the Company’s financial condition or results of operations.

~~The Company has a prospective income tax benefit resulting from a net operating loss carryforward and start up costs that will offset any future operating profit.~~18

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In March 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133” (SFAS No. 161). This statement changes the disclosure requirements for 15derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is intended to enhance the current disclosure framework in Statement 133. The Statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. This disclosure better conveys the purpose of derivative use in terms of the risks that the entity is intending to manage. Disclosing the fair values of derivative instruments and their gains and losses in a tabular format should provide a more complete picture of the location in an entity’s financial statements of both the derivative positions existing at period end and the effect of using derivatives during the reporting period. Disclosing information about credit-risk-related contingent features should provide information on the potential effect on an entity’s liquidity from using derivatives. Finally, this Statement requires cross-referencing within the footnotes, which should help users of financial statements locate important information about derivative instruments. The adoption of this statement will have no material effect on the Company’s financial condition or results of operations.

~~Impact~~ITEM of7A. QUANTITATIVE ~~Inflation~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~The~~Not ~~Company believes that inflation has had a negligible effect on operations over the past three years~~required.

~~Capital~~ITEM ~~Expenditures~~8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

~~The~~Our ~~Company expended~~audited nofinancial ~~significant~~statements ~~amounts on capital expenditures~~ for the ~~period~~years ~~from~~ended ~~inception to~~ December 31, ~~2007~~2008 ~~except~~and ~~in connection with Planktos’ purchase of the Weatherbird II~~2007 ~~research~~are ~~vessel~~attached ~~during~~hereto ~~2007~~as ~~for~~F-1 ~~$800,000,~~through ~~which vessel was subsequently sold in February 2008 for $1,000,000~~F-22.

~~Liquidity and Capital Resources~~19

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AsSolar ~~of December~~Energy 31, 2007, the Company had current assets totaling $72,355 and a working capital deficit of $1,311,728. The current assets consist solely of cash on hand. Net stockholders' deficit in the Company was $680,892 at December 31, 2007. The Company is in the development stage and, since inception, has experienced significant changes in liquidity, capital resources and shareholders’ equity.Limited

~~Cash~~(A ~~flow used~~Development inStage ~~operating activities was $8,176,923 for the period from inception to December 31,~~Company) ~~2007.~~Consolidated ~~Cash~~Financial flow used in operating activities for the year ended December 31, 2007 was $3,494,696 as compared to $1,570,992 for the year ended December 31, 2006. The increase in cash flow used in operating activities in the current year was due primarily to an increase in net losses from discontinued operations and financing costs from warrants granted in 2007Statements

~~Cash flow provided by financing activities was $6,209,533 for the period from inception to~~ December ~~31,~~ ~~2007. Cash flow provided by financing activities for the year ended December~~ 31, 2007 was $1,186,261 as compared to $1,584,330 for the year ended December 31, 2006. Cash flow provided by financing activities in the current period can be attributed to proceeds received from related party loans, advances, and sales of our equity.2008

~~Cash flow~~ ~~provided by investing activities was $2,039,745 for the period from inception to December~~ 31, 2007. Cash flow provided by investing activities for the year ended December 31, 2007 was $2,176,878 as compared to $2,445 used by investing activities for the year ended December 31, 2006. The recognition of cash flows used by investing activities is a result of the cash acquired from Planktos. Page

~~The Company’s~~ Report ~~current assets are insufficient to conduct our plan~~ of ~~operation~~Independent ~~over~~Registered ~~the next~~Public ~~twelve~~Accounting (12) months and we will have to seek debt or equity financing to fund operations. The Company has no current commitments or arrangements with respect to, or immediate sources of funding. Further, no assurances can be given that funding is available or available to the Company on acceptable terms. The Company’s shareholders would be the most likely source of new funding in the form of loans or equity placements though none have made any commitment for future investment and we have no agreement formal or otherwise. The Company’s inability to obtain funding has had a material adverse affect on our plan of operation and will continue to diminish our ongoing businesses.Firm F-2

~~Subsequent to~~ Consolidated ~~the year ended December 31, 2007, the Company’s majority owned subsidiary,~~Balance Planktos, sold its research vessel the Weatherbird II to Sperc Explorer, Inc. for a sale price of $1,000,000. The Company has no current plans for the purchase or sale of any plant or equipment.Sheets F-3

~~The~~ Consolidated ~~Company currently~~Statements ~~has~~of noOperations F-4 Consolidated ~~employees~~Statements ~~and~~of ~~has~~Stockholders’ noDeficit F-5 Consolidated ~~plans~~Statements toof ~~hire~~Cash ~~any employees in the near~~Flows F-10 ~~future.~~

Notes to Consolidated Financial 16Statements F-12

~~Off Balance Sheet Arrangements~~F-1

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AsBoard of ~~December~~ 31, 2007, the Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.Directors

Solar Energy Limited ~~Critical~~Palm ~~Accounting~~Desert, ~~Policies~~California

InREPORT ~~the notes~~OF toINDEPENDENT ~~the~~REGISTERED ~~audited~~PUBLIC ~~consolidated~~ACCOUNTING financial statements for the year ended December 31, 2007 included in the Company’s Form 10-K, the Company discussed those accounting policies that are considered to be significant in determining the results of operations and our financial position. We believe that the accounting principles utilized by us conform to accounting principles generally accepted in the United States of America.FIRM

~~The preparation~~We have audited the accompanying consolidated balance sheets of ~~financial~~Solar ~~statements~~Energy ~~requires~~Limited ~~management~~(a todevelopment ~~make~~stage ~~significant~~company) ~~estimates~~as of December 31, 2008 and ~~judgments~~ ~~that~~2007, ~~affect~~and the ~~reported~~related ~~amounts~~statements of ~~assets~~operations, ~~liabilities,~~stockholders’ ~~revenues~~deficit and ~~expenses.~~cash flows for the years then ended and for the period from January 5, 1994 (inception) Bythrough ~~their~~December ~~nature~~31, ~~these~~2008. ~~judgments~~These financial statements are ~~subject~~the responsibility of the Company’s management. Our responsibility is to express an ~~inherent~~opinion ~~degree~~on ofthese ~~uncertainty.~~financial Onstatements anbased on our audit. ~~on-going~~We ~~basis,~~conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we ~~evaluate~~plan ~~our~~and ~~estimates,~~perform ~~including~~the ~~those~~audit ~~related~~to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to ~~bad~~have, ~~debts~~nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting ~~inventories,~~as ~~intangible~~a ~~assets~~basis for designing audit procedures that are appropriate in the circumstances, ~~warranty~~but ~~obligations~~not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, ~~product~~we ~~liability~~express no such opinion. An audit includes examining, ~~revenue~~on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the ~~income~~accounting ~~taxes~~principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We ~~base~~believe that our ~~estimates~~audit onprovides ~~historical~~a ~~experience~~reasonable ~~and~~basis ~~other~~for ~~facts~~our ~~and~~opinion. ~~circumstances~~In ~~that~~our ~~are~~opinion, ~~believed~~the financial statements referred to beabove ~~reasonable~~present fairly, in all material respects, the financial position of Solar Energy Limited (a development stage company) as of December 31, 2008 and 2007, and the results ~~form~~of its operations, stockholders deficit and its cash flows for the ~~basis~~years then ended and for ~~making~~the period from January 5, 1994 (inception) through December 31, 2008 in conformity with accounting principles generally accepted in the United States of America. ~~judgments~~The ~~about~~accompanying financial statements have been prepared assuming that the ~~carrying~~Company ~~value~~will ofcontinue ~~assets~~as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses and ~~liabilities~~negative working capital raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding the resolution of this issue are also discussed in Note 3. The ~~actual~~financial ~~results~~statements ~~may~~do ~~differ~~not include any adjustments that might result from ~~these~~the ~~estimates~~outcome ~~under~~of ~~different~~this ~~assumptions or conditions~~uncertainty.

~~Minority~~/s/ Williams & Webster, P.S. ~~Interests~~

~~The~~Williams ~~company~~& ~~owns~~Webster, ~~53% of Planktos Corp~~P. ~~The 47% minority in the subsidiary is owned by various unrelated parties~~S. ~~The minority holders are not expected to make additional capital contributions.~~

~~Going Concern~~Certified Public Accountants

~~The Company’s audit expressed substantial doubt as to the Company’s ability to continue as a going concern as a result of recurring losses~~Spokane, ~~lack of revenue-generating~~Washington ~~activities~~April ~~and an accumulated deficit of $15~~13,~~344,225~~ as of December 31, 2007. The Company’s ability to continue as a going concern is subject to our ability to obtain funding from outside sources. Management’s plan to address our ability to continue as a going concern, include: (i) obtaining funding from private placement sources; (ii) obtaining additional funding from the sale of our securities; (iii) generating revenues from the commercialization of its research and development projects; and (iv) obtaining loans and grants from various financial institutions, where possible. Although management believes that it will be able to obtain the necessary funding to allow us to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.2009

~~Forward Looking Statements and Factors That May Affect Future Results and Financial Condition~~F-2

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The statements contained in the section titled “Results of Operations” and “Description of Business”, with the exception of historical facts, are forward looking statements. A safe-harbor provision may not be applicable to the forward looking statements made in this current report Forward looking statements reflect our current expectations and beliefs regarding our future results of operations, performance, and achievements. These statements are subject to risks and uncertainties and are based upon assumptions and beliefs that may or may not materialize. These statements include, but are not limited to, statements concerning:

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS

				December 31,		December 31,
				2008		2007
ASSETS

CURRENT ASSETS
	Cash		$	13,853	$	10,795
	Other receivable			37,833		-

		TOTAL CURRENT ASSETS		51,686		10,795

OTHER ASSETS
	Net assets disposed subsidiary			-		848,841

TOTAL ASSETS			$	51,686	$	859,636

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	96,934	$	106,882
	Accrued interest - related party			27,738		10,892
	Other current liabilities			-		4,464
	Advances payable			439,842		355,013
	Notes payable to related party			376,521		512,821
	Debenture payable, net of discount			100,000		-
	Accrued interest			26,000		-
		TOTAL CURRENT LIABILITIES		1,067,043		990,072

LONG-TERM LIABILITIES
	Debenture payable, net of discount			-		81,261
	Accrued interest			-		14,064
		TOTAL LONG-TERM LIABILITIES		-		95,325

	Net liabilities and minority interest of disposed subsidiary			-		485,430

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
	Common stock, 50,000,000 shares authorized; $0.0001 par value, 18,423,309 and 21,923,309 shares issued
	and outstanding, respectively			1,842		2,192
	Additional paid-in capital			13,961,491		14,661,141
	Accumulated deficit during development stage			(14,978,690)		(15,374,524)
		TOTAL STOCKHOLDERS' DEFICIT		(1,015,357)		(711,191)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$	51,686	$	859,636

•The ~~the~~accompanying ~~sufficiency~~notes are an integral part of ~~existing~~these ~~capital~~consolidated ~~resources;~~financial statements.

~~• our anticipated financial performance;~~F-3

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• our ability to raise additional capital to fund cash requirements for future operations;

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
								From Inception
								(January 5,
								1994)
				Year Ended				through
				December 31,		December 31,		December, 31
				2008		2007		2008
REVENUES			$	-	$	-	$	-

EXPENSES
	General and administrative			291,559		1,187,898		6,220,908
	Research and development			-		186,511		2,671,638
	Impairment of patents			-		-		39,648
	Impairment of goodwill			-		-		14,118
		TOTAL EXPENSES		291,559		1,374,409		8,946,312

LOSS FROM OPERATIONS				(291,559)		(1,374,409)		(8,946,312)

OTHER INCOME (EXPENSES)
	Other income			-		-		349,886
	Financing costs			-		(514,300)		(1,477,800)
	Gain (loss) on investments			-		-		17,200
	Gain (loss) on sale or disposal of assets			-		-		(10,867)
	Gain (loss) on derivative instrument			-		18,221		29,551
	Gain on forgiveness of debt			-		-		172,227
	Interest income (expense), net			(28,406)		(22,933)		(112,782)
	Amortization of discount on debenture payable			(18,739)		(8,411)		(29,551)
	Gain (loss) on sale of subsidiary			-		-		120,711
		TOTAL OTHER INCOME (EXPENSE)		(47,145)		(527,423)		(941,425)

LOSS FROM CONTINUING OPERATIONS				(338,704)		(1,901,832)		(9,887,737)

DISCONTINUED OPERATIONS
	Gain (Loss) on discontinued operations			734,538		(1,357,991)		(5,090,953)

NET INCOME (LOSS)			$	395,834	$	(3,259,823)	$	(14,978,690)
	NET INCOME (LOSS) PER COMMON SHARE,
	CONTINUING OPERATIONS, BASIC AND DILUTED $			(0.02)	$	(0.09)
	NET INCOME (LOSS) PER COMMON SHARE,
	DISCONTINUED OPERATIONS, BASIC $			0.04	$	(0.06)
	NET INCOME (LOSS) PER COMMON SHARE,
	DISCONTINUED OPERATIONS, DILUTED $			0.03	$	(0.06)
	NET INCOME (LOSS) PER COMMON SHARE, BASIC $			0.02	$	(0.15)
	NET INCOME (LOSS) PER COMMON SHARE, DILUTED $			0.02	$	(0.15)
	WEIGHTED AVERAGE NUMBER OF COMMON
	SHARES OUTSTANDING, BASIC $			19,398,719	$	21,127,281
	WEIGHTED AVERAGE NUMBER OF COMMON
	SHARES OUTSTANDING, DILUTED $			21,148,719	$	21,127,281

•The ~~uncertainties~~accompanying ~~related~~notes toare ~~the~~an ~~development~~integral part of ~~our~~these ~~technologies;~~consolidated financial statements.

~~• the volatility of the stock market; and~~F-4

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• general economic conditions.

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

						Deficit
						Accumulated
				Additional	Share	During	Total
		Common Stock		Paid-in	Subscriptions	Development	Stockholders'
		Shares	Amount	Capital	Received	Stage	Equity
Balance, January 5, 1994 (Inception)		-	$ -	$ -	$ -	$ -	$ -

	1/5/94 Stock issued for Organization Costs	125,000	13	2,487	-	-	2,500
	Net Loss for the Year Ended December 31, 1994	-	-	-	-	(500)	(500)

Balance, December 31, 1994		125,000	13	2,487	-	(500)	2,000

	Net Loss for the Year Ended December 31, 1995	-	-	-	-	(500)	(500)

Balance, December 31, 1995		125,000	13	2,487	-	(1,000)	1,500

	10/96 Shares Issued for Cash at $20.00 Per Share	1,300	1	25,999	-	-	26,000
	11/96 Shares Issued for Cash at $0.90 Per Share	831	-	763	-	-	763
	12/96 Shares Issued for Cash at $2.00 Per Share	125	-	251	-	-	251
	Stock Split Rounding Adjustment	595	(1)	1	-	-	-
	Net Loss for the Year Ended December 31, 1996	-	-	-	-	(24,013)	(24,013)

Balance, December 31, 1996		127,851	13	29,501	-	(25,013)	4,501

	Net Loss for the Year Ended December 31, 1997	-	-	-	-	(4,000)	(4,000)

Balance, December 31, 1997		127,851	13	29,501	-	(29,013)	501

	1/98 Shares Issued for Acquisition of Hydro-Air Tech., Inc.	70,400	7	(7)	-	-	-
	6/98 Shares Issued for Cash at $1.00 Per Share	780,000	78	779,922	-	-	780,000
	7/98 Shares Issued for Cash at $10.00 Per Share	12,500	1	124,999	-	-	125,000
	11/98 Shares Issued for Cash at $1.00 Per Share	200,000	20	199,980	-	-	200,000
	Net Loss for the Year Ended December 31, 1998	-	-	-	-	(939,446)	(939,446)

Balance, December 31, 1998		1,190,391	119	1,134,394	-	(968,459)	166,054

17The accompanying notes are an integral part of these consolidated financial statements.

We wish to caution readers that our operating results are subject to various risks and uncertainties that could cause our actual results to differ materially from those discussed or anticipated, including the factors set forth in the section entitled “Risk Factors” included elsewhere in this report. We also wish to advise readers not to place any undue reliance on the forward looking statements contained in this report, which reflect our beliefs and expectations only as of the date of this report. We assume no obligation to update or revise these forward looking statements to reflect new events or circumstances or any changes in our beliefs or expectations, other than is required by law.F-5

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Stock-Based Compensation

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

						Deficit
						Accumulated
				Additional	Share	During	Total
		Common Stock		Paid-in	Subscriptions	Development	Stockholders'
		Shares	Amount	Capital	Received	Stage	Equity

Balance, December 31, 1998 (forward)		1,190,391	119	1,134,394	-	(968,459)	166,054

	1/99 Shares Issued for Cash at $10.00 Per Share	10,000	1	99,999	-	-	100,000
	1/99 Shares Issued for Acquisition of Renewable Energy Corporation at $12.00 Per Share	35,000	4	419,996	-	-	420,000
	10/99 Shares Issued for Cash at $1.80 Per Share	80,000	8	143,990	-	-	143,998
	Net Loss for the Year Ended December 31, 1999	-	-	-	-	(957,086)	(957,086)

Balance, December 31, 1999		1,315,391	132	1,798,379	-	(1,925,545)	(127,034)

	Net Loss for the Year Ended December 31, 2000	-	-	-	-	(925,899)	(925,899)

Balance, December 31, 2000		1,315,391	132	1,798,379	-	(2,851,444)	(1,052,933)

	7/01 Shares Issued for Rounding in Connection with 10:1 Exchange	35,396	4	(4)	-	-	-
	8/01 Shares Issued for Cash at $0.23 Per Share	350,000	35	81,215	-	-	81,250
	10/01 Shares Issued for Cash at $0.25 Per Share	50,000	5	12,495	-	-	12,500
	10/01 Shares Issued to Settle Debt at $0.33 Per Share	1,507,739	151	502,808	-	-	502,959
	10/01 Shares Issued for Services at $0.33 Per Share	113,682	11	37,504	-	-	37,515
	11/01 Shares Issued for Cash at $0.51 Per Share	275,000	27	141,223	-	-	141,250
	Net Loss for the Year Ended December 31, 2001	-	-	-	-	(465,476)	(465,476)

Balance, December 31, 2001		3,647,208	365	2,573,620	-	(3,316,920)	(742,935)

	8/02 Shares Issued for Cash at $0.30 Per Share	56,113	5	16,995	-	-	17,000
	Net Loss for the Year Ended December 31, 2002	-	-	-	-	(213,045)	(213,045)

Balance, December 31, 2002		3,703,321	370	2,590,615	-	(3,529,965)	(938,980)

On January 1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which addresses the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. In January 2005, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107, which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R eliminates the ability to account for stock-based compensation transactions using the intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and instead generally requires that such transactions be accounted for using a fair-value-based method. We use the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards under SFAS No. 123R, consistent with that used for pro forma disclosures under SFAS No. 123, Accounting for Stock-Based Compensation. We have elected the modified prospective transition method as permitted by SFAS No. 123R and accordingly prior periods have not been restated to reflect the impact of SFAS No. 123R. The ~~modified~~accompanying ~~prospective~~notes transition method requires that stock-based compensation expense be recorded for all new and unvested stock options, restricted stock, restricted stock units, and employee stock purchase plan shares that are ~~ultimately~~an ~~expected~~integral topart ~~vest as the requisite service is rendered beginning on January 1, 2006, the first day~~ of ~~our~~these ~~fiscal~~consolidated ~~year~~financial ~~2006~~statements. ~~Stock-based compensation expense for awards granted prior to January 1, 2006 is based on the grant date fair-value as determined under the pro forma provisions of SFAS No. 123.~~

~~Prior to the adoption of SFAS No 123R, we measured compensation expense for our employee stock~~F-based compensation plans using the intrinsic value method prescribed by APB Opinion No. 25. We applied the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, as if the fair-value-based method had been applied in measuring compensation expense. Under APB Opinion No. 25, when the exercise price of our employee stock options was equal to the market price of the underlying stock on the date of the grant, no compensation expense was recognized.6

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We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

									Deficit
									Accumulated
					Additional		Share		During		Total
			Common Stock		Paid-in		Subscriptions		Development		Stockholders'
			Shares	Amount	Capital		Received		Stage		Equity

Balance, December 31, 2002 (forward)			3,703,321	370	2,590,615		-		(3,529,965)		(938,980)

	1/03 Shares Issued For Cash at $0.30 Per Share		23,000	2	6,898		-		-		6,900
	2/03 Shares Issued For Cash at $0.30 Per Share		60,000	6	17,994		-		-		18,000
	9/03 Shares Issued to Settle Debt at $0.30 Per Share		2,734,954	274	820,213		-		-		820,487
	10/03 Shares Issued for Services at $0.20 Per Share	200,000		20	39,980	-		-		40,000
	10/03 Shares Issued for Cash at $0.30 Per Share	150,000		15	44,985	-		-		45,000
	Net Loss for the Year Ended December 31, 2003	-		-	-	-		(281,905)		(281,905)

Balance, December 31, 2003		6,871,275		687	3,520,685	-		(3,811,870)		(290,498)

	3/04 Shares Issued to For Cash at $0.20 Per Share	450,000		45	89,955	-		-		90,000
	5/04 Shares Issued for Cash at $0.25 Per Share	200,000		20	49,980	-		-		50,000
	Net Loss for the Year Ended December 31, 2004	-		-	-	-		(91,450)		(91,450)

Balance, December 31, 2004		7,521,275		752	3,660,620	-		(3,903,320)		(241,948)

18The accompanying notes are an integral part of these consolidated financial statements.

~~Recent Accounting Pronouncements~~F-7

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In December 2007, the FASB issued SFAS 160, “Noncontrolling interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This Statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years beginning on or after December 15, 2008. Early adoption is not permitted. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

									Deficit
									Accumulated
					Additional		Share		During		Total
			Common Stock		Paid-in		Subscriptions		Development		Stockholders'
			Shares	Amount	Capital		Received		Stage		Equity

Balance, December 31, 2004 (forward)		7,521,275		752	3,660,620	-		(3,903,320)		(241,948)

	1/05 Shares Issued For Services at $0.21 Per Share	600,000		60	125,940	-		-		126,000
	3/05 Shares Issued For Cash at $0.20 Per Share	25,000		3	4,997	-		-		5,000
	5/05 Shares Issued For Cash at $0.20 Per Share	700,000		70	139,930	-		-		140,000
	5/05 Fair Value of Warrants issued at $0.25 per warrant	-		-	182,200	-		-		182,200
	6/05 Shares Issued For Cash at $0.25 Per Share	400,000		40	99,960	-		-		100,000
	6/05 Shares Issued For Cash at $0.35 Per Share	50,000		5	61,996	-		-		62,001
	7/05 Shares Issued For Cash at $0.20 Per Share	180,000		18	35,982	-		-		36,000
	7/05 Fair Value of Warrants issued at $0.25 per warrant	-		-	71,200	-		-		71,200
	8/05 Shares Issued For Cash at $0.20 Per Share	100,000		10	19,990	-		-		20,000
	8/05 Fair Value of Warrants issued at $0.25 per warrant	-		-	46,900	-		-		46,900
	8/05 Shares Issued For Services at $0.58 Per Share	500,000		50	289,950	-		-		290,000
	10/05 Shares Issued For Services at $1.20 Per Share	105,000		10	125,990	-		-		126,000
	10/05 Shares Issued For Cash at $0.20 Per Share	40,000		4	7,996	-		-		8,000
	10/05 Shares Issued For Cash at $0.35 Per Share	200,000		20	69,980	-		-		70,000
	10/05 Fair Value of Warrants issued at $0.40 per warrant	-		-	128,400	-		-		128,400
	10/05 Subscriptions received	-		-	-	20,000		-		20,000
	11/05 Shares Issued For Acquisitions of Planktos, Inc. at $1.00 Per Share	1,500,000		150	1,499,850	-		-		1,500,000
	11/05 Shares Issued For Acquisitions of D2Fusion, Inc. at $1.00 Per Share	2,000,000		200	1,999,800	-		-		2,000,000
	12/05 Shares Issued For Cash at $0.20 Per Share	705,000		71	140,929	-		-		141,000
	12/05 Fair Value of Warrants issued at $0.25 per warrant	-		-	350,400	-		-		350,400
	12/05 Shares Issued For Cash at $0.35 Per Share	300,000		30	104,970	-		-		105,000
	12/05 Fair Value of Warrants issued at $0.40 per warrant	-		-	184,400	-		-		184,400
	Net Loss for the Year Ended December 31, 2005	-		-	-	-		(6,602,698)		(6,602,698)

Balance, December 31, 2005		14,926,275		1,493	9,352,380	20,000		(10,506,018)		(1,132,145)

InThe ~~January 2007,~~accompanying wenotes ~~adopted~~are ~~FIN 48.~~an ~~FIN 48~~integral ~~clarifies~~part ~~the~~of ~~accounting~~these ~~for~~consolidated ~~uncertain taxes recognized in an enterprise's~~ financial statements ~~in accordance with SFAS No~~. 109, "Accounting for Income Taxes." FIN 48 prescribes a recognition threshold and measurement of a tax position taken or expected to be taken in an enterprise's tax return. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure related to uncertain income tax positions.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities. SFAS 159 creates a fair value option allowing an entity to irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities, with changes in fair value recognized in earnings as they occur. SFAS 159 also requires an entity to report those financial assets and financial liabilities measured at fair value in a manner that separates those reported fair values from the carrying amounts of assets and liabilities measured using another measurement attribute on the face of the statement of financial position. Lastly, SFAS 159 requires an entity to provide information that would allow users to understand the effect on earnings of changes in the fair value on those instruments selected for the fair value election. SFAS 159 is effective for fiscal years beginning after November 15, 2007 with early adoption permitted. The Company is continuing to evaluate SFAS 159 and to assess the impact on our results of operations and financial condition if an election is made to adopt the standard.F-8

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

									Deficit
									Accumulated
					Additional		Share		During		Total
			Common Stock		Paid-in		Subscriptions		Development		Stockholders'
			Shares	Amount	Capital		Received		Stage		Equity

Balance, December 31, 2005 (forward)		14,926,275		1,493	9,352,380	20,000		(10,506,018)		(1,132,145)

	2/06 Shares Issued For Cash at $0.25 Per Share	705,000		70	176,180	-		-		176,250
	3/06 Shares Issued For Cash at $0.25 Per Share	80,000		8	19,992	(20,000)		-		-
	3/06 Shares Issued For Cash at $0.40 Per Share	20,000		2	7,998	-		-		8,000
	5/06 Shares and Warrants Issued for Cash at $0.33 Per Unit	500,000		50	164,950	-		-		165,000
	6/06 Shares Issued For Cash at $0.28 Per Share	3,540,212		354	1,001,853	-		-		1,002,207
	7/06 Shares Issued For Cash at $0.27 Per Share	66,222		6	17,961	-		-		17,967
	8/06 Shares Issued For Cash at $0.27 Per Share	4,100		1	1,106	-		-		1,107
	8/06 Shares and Warrants Issued for Cash at $0.35 Per Unit	31,500		3	11,022	-		-		11,025
	Net loss, year ended December 31, 2006	-		-	-	-		(1,608,683)		(1,608,683)

Balance, December 31, 2006		19,873,309		1,987	10,753,442	-		(12,114,701)		(1,359,272)

	5/07 Shares and Warrants Issued for Cash at $0.35 Per Unit	342,857		34	119,966					120,000
	5/07 Shares and Warrants Issued for Debt at $0.35 Per Unit	807,143		81	282,419					282,500
	5/07 Shares Issued For Cash at $0.25 Per Share	500,000		50	124,950					125,000
	5/7/07 Fair Value of Warrants issued at $0.40 per warrant				489,600					489,600
	5/07 Shares Issued For Services at $0.50 Per Share	300,000		30	149,970					150,000
	8/9/07 reverse acquisition of Planktos Corp.				2,691,104					2,691,104
	10/1/07 Fair Value of Warrants issued at $0.40 per warrant				24,700					24,700
	10/07 Shares Issued For Cash at $0.25 Per Share	100,000		10	24,990					25,000
	Net Loss for the Year Ended December 31, 2007	-		-	-	-		(3,259,823)		(3,259,823)

Balance, December 31, 2007		21,923,309		2,192	14,661,141	-		(15,374,524)		(711,191)

	4/11/08 Fair value of shares received in separation agreement and intangible assets	(3,500,000)		(350)	(699,650)					(700,000)
	Net Income for the Year Ended December 31, 2008							395,834		395,834

Balance, December 31, 2008		18,423,309		$ 1,842	$13,961,491	$ -		$(14,978,690)		$(1,015,357)

~~Not required~~The accompanying notes are an integral part of these consolidated financial statements.

~~ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA~~F-9

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Our audited financial statements for the years ended December 31, 2007 and 2006 are attached hereto as F-1 through F-24.

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS

									From Inception
									(January 5,
									1994)
					Year Ended				through
					December 31,		December 31,		December 31,
					2008		2007		2008

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net loss			$	(338,704)	$	(1,901,832)	$	(9,887,737)
	Adjustments to reconcile net loss to net cash used in operating activities:
	(Net of Acquisition/Sale)
		Amortization and depreciation			-		9,165		212,809
		Amortization on discount of debentures			18,739		8,411		29,551
		Bad debt			-		-		250,000
		Stock issued for services			-		150,000		856,851
		Services for pre-paid expense			-		-		169,165
		(Gain) Loss on derivative			-		(18,221)		(29,551)
		Stock issued for R&D expenses			-		-		439,900
		Loss on sale of assets			-		-		10,867
		Gain on investments			-		-		(17,199)
		Loss on sale of subsidiary			-		-		(120,711)
		Gain on forgiveness of debt			-		-		(172,227)
		Impairment of patents			-		-		39,648
		Financing costs			-		514,300		1,477,800
		Impairment of goodwill			-		-		14,118
		Minority interest			-		-		(123,856)
		(Increase) decrease in:
			Other receivable		(37,833)		-		(37,794)
			Deposits		-		-		(24,883)
			Prepaid expenses		-		26,357		22,500
		Increase (decrease) in:
			Accounts payable and bank overdraft		(9,948)		202,946		328,574
			Accrued expenses and other current liabilities		-		18,549		271,877
			Deferred revenues		-		-		250,000
			Minority interest		-		66,120		66,120
		Net cash used by continuing operating activities			(367,746)		(924,205)		(5,974,178)
		Net cash used by discontinued operating activities			(393,645)		(2,632,051)		(3,025,696)
		Net cash used by operating activities		$	(761,391)	$	(3,556,256)	$	(8,999,874)

19The accompanying notes are an integral part of these consolidated financial statements.

~~SOLAR ENERGY LIMITED~~F-10

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(A Development Stage Company)

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS

								From Inception
								(January 5,
								1994)
				Year Ended				through
				December 31,		December 31,		December 31,
				2008		2007		2008


(Continued) CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
	Cash acquired from sale of subsidiary		$	-	$	-	$	180,000
	Cash acquired from subsidiary			-		2,973,604		3,221,116
	Cash paid to subsidiary			-		-		(107,568)
	Cash paid to Renewable Energy Corporation and Sunspring, Inc.			-		-		(2,076)
	Cash paid for patent costs			-		-		(106,318)
	Cash paid for property & equipment			-		(796,726)		(868,572)
	Cash paid for deposits			-		-		(4,837)
	Cash received on sale of assets			-		-		23,000
	Cash paid for notes receivable			-		-		(295,000)
	Discontinued operations			1,000,749		-		1,000,749
		Net cash provided by investing activities		1,000,749		2,176,878		3,040,494


CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
	Issued stock for cash			-		270,000		3,917,469
	Cash received from related party notes payable and advances			154,200		916,261		1,690,343
	Cash repaid to related party notes payable and advances			(290,500)		.		(290,500)
	Proceeds from debenture payable			-		-		100,000
	Cash received from advances by shareholders			-		-		2,044,099
	Cash paid on debt financing			-		-		(1,388,178)
	Discontinued operations			(100,000)				(100,000)
	Net cash provided (used) by financing activities			(236,300)		1,186,261		5,973,233

	NET INCREASE (DECREASE) IN CASH			3,058		(193,117)		13,853

CASH, BEGINNING OF PERIOD				10,795		203,912		-

CASH, END OF PERIOD			$	13,853	$	10,795	$	13,853

SUPPLEMENTAL CASH FLOW INFORMATION:
	Interest paid		$	-	$	-	$	17,195
	Income taxes paid		$	-	$	-	$	-

~~Consolidated~~The ~~Financial~~accompanying ~~Statements~~notes are an integral part of these consolidated financial statements.

~~December 31, 2007~~F-11

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~~Page~~Solar Energy Limited

~~Report~~(A ofDevelopment ~~Independent~~Stage ~~Registered~~Company) Notes ~~Public~~to ~~Accounting~~the ~~Firm~~Consolidated ~~F-2~~Financial Statements

~~Consolidated~~December ~~Balance~~31, ~~Sheets F-3~~2008

~~Consolidated~~NOTE ~~Statements~~1 of– ~~Operations~~DESCRIPTION ~~F-4~~AND HISTORY OF BUSINESS AND BASIS OF PRESENTATION

~~Consolidated~~Solar ~~Statements~~Energy ofLimited ~~Stockholders’~~(the ~~Deficit~~“Company”) ~~F-5~~is in the development stage according to Financial Accounting Standards Board Statement No. 7 and is currently focusing its attention on raising capital in order to pursue its goals.

~~Consolidated~~On ~~Statements~~August 10, 2005, the Company entered into a stock purchase agreement to acquire 100% of ~~Cash~~the ~~Flows~~issued ~~F-11~~and outstanding stock of Planktos, Inc. (“Planktos”) for the purchase price of $1,500,000 by issuing a 5 year term convertible debenture bearing an interest rate of 5%. The proprietary greenhouse emission technology acquired as a result of this acquisition is focused on taking advantage of the Kyoto Protocol which enables companies and governments to offset regulated greenhouse emission restrictions by investing in CO2 reduction programs in exchange for certified emission reduction (“CER”) credits. These CER credits are traded much like commodities and have their own market of which they are listed for sale. In determining the purchase price, consideration was given to previous amounts invested in developing this technology up to the point of acquisition. On November 21, 2005, the debenture was converted into 1,500,000 of the Company’s restricted common shares.

~~Notes~~On August 17, 2005, the Company and its wholly owned subsidiary, Planktos, executed an Iron-Fertilization Prove-Out and Purchase Agreement with Diatom Corporation (“Diatom”) whereby Diatom committed to ~~Consolidated~~assist ~~Financial~~the ~~Statements~~Company Fin providing developmental funding for a marine “iron-13fertilization” prove out program in exchange for exclusive marketing and intellectual property rights to Planktos’s CO2 sequestration process. Planktos expected the cost of the prove out program to be $1,290,000 of which Diatom has agreed to provide up to 25%. The Company was responsible for funding the remainder of the developmental expense. The agreement provided for a royalty agreement which will entitle Planktos and the Company to 75% of net sales revenue generated by Diatom from the sale of CER credits created from the sequestration process until the Company and Planktos have recouped their costs. Thereafter, the Company and Planktos will be entitled to 25% of net sales revenue generated by Diatom from the sale of CERs. Diatom has paid $250,000 in cash for the exclusive marketing and intellectual property rights. Since the Company committed to fund 75% of the estimated cost to develop the program, a provision for the estimated loss on the contract of $967,500 was recognized. During the fourth quarter of 2007 and subsequent to the year ended December 31, 2007, Planktos’ “iron-fertilization” prove out program was suspended and its operations were discontinued. Planktos terminated all employees, liquidated substantially all of its assets and closed its Foster City, California office.

On August 18, 2005, the Company entered into a stock purchase agreement to acquire 100% of the issued and outstanding stock of D2Fusion, Inc. (“D2Fusion”) for the purchase price of $2,000,000 by issuing a 5 year term convertible debenture bearing an interest rate of 5%. FThe proprietary solid-1state fusion technology acquired as a result of this acquisition is aimed at entry level heat and energy applications for homes and industry with the ultimate goal of producing heat and electricity at a fraction of today’s cost and with no emissions. In determining the purchase price, consideration was given to previous amounts invested in developing this technology up to the point of acquisition. On November 21, 2005, the debenture was converted into 2,000,000 of the Company’s restricted common shares.

~~Board~~On August 9, 2007 the Company and Diatom completed the sale of 100% of the issued and outstanding shares of Planktos. Diatom issued 45,000,000 restricted shares of common stock to the Company which represents 53% of the outstanding common stock of Diatom. As part of this transaction Diatom changed its name to ~~Directors~~Planktos Corp. This transaction was in essence an acquisition of Planktos Corp. and was accounted for in accordance with the principles for reverse acquisition accounting.

~~Solar Energy Limited~~F-12

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~~Vancouver,~~Solar ~~British~~Energy ~~Columbia~~Limited

(A Development Stage Company) ~~CANADA~~ Notes to the Consolidated Financial Statements

~~REPORT~~December OF31, ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~2008

WeNOTE ~~have audited~~1 ~~the~~– ~~accompanying~~DESCRIPTION ~~balance~~AND ~~sheet~~HISTORY ofOF ~~Solar Energy Limited (a development stage~~BUSINESS ~~company)~~AND asBASIS ofOF ~~December~~PRESENTATION 31, 2007 and 2006, and the related statements of operations, stockholders’ deficit and cash flows for the years then ended. 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 audit.(Contintued)

~~We conducted~~On ~~our~~April ~~audit~~11, in2008, ~~accordance with~~ the ~~standards of the Public~~ Company ~~Accounting Oversight~~entered ~~Board~~into ~~(United~~an ~~States).~~agreement ~~Those~~with ~~standards~~the ~~require~~founder ~~that~~of wePlanktos, ~~plan~~Inc. and ~~perform~~D2 ~~the~~Fusion, ~~audit to~~Inc. ~~obtain~~where ~~reasonable assurance about whether~~ the ~~financial statements are free of material misstatement. The~~ Company isreturned ~~not required~~ to ~~have,~~authorized ~~nor~~capital ~~were~~stock wea ~~engaged~~total toof ~~perform~~3,500,000 ~~an audit~~ of its ~~internal~~common ~~control~~shares ~~over~~issued ~~financial reporting. Our audit included consideration of internal control over financial reporting~~ as apart ~~basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose~~ of ~~expressing an opinion on~~ the ~~effectiveness~~August ~~of the Company’s internal control over financial reporting. Accordingly~~10, we2005 ~~express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts~~ and ~~disclosures~~August ~~in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management~~18, as2005 ~~well~~stock ~~as evaluating the overall financial statement presentation. We believe~~purchase ~~that our audit provides a reasonable basis for our opinion~~agreements.

InOn ~~our opinion~~November 13, 2008, the ~~financial~~Company ~~statements~~sold ~~referred~~its 45,000,000 restricted shares of Planktos Corp. to ~~above~~a ~~present~~Maidon ~~fairly~~Services Limited for $200,000 inof ~~all~~which ~~material respects~~$125,000 ~~the~~in ~~financial~~cash ~~position~~was ofreceived ~~Solar~~on ~~Energy~~closing ~~Limited~~and (a$75,000 ~~development~~was ~~stage~~due ~~company)~~within ~~as of~~fourteen ~~December~~months ~~31,~~with ~~2007~~an ~~and~~option ~~2006,~~to ~~and~~convert ~~the~~into ~~results~~Planktos ofCorp. ~~its~~shares ~~operations,~~at ~~stockholders~~$0.25 ~~deficit~~per ~~and~~share. These financial ~~its~~statements ~~cash~~include ~~flows~~the ~~for~~losses ~~the~~from ~~years~~January ~~then~~1, ~~ended~~2008 into ~~conformity~~November ~~with~~12, ~~accounting~~2008 ~~principles~~of ~~generally accepted~~Planktos inCorp. ~~the~~and ~~United~~its ~~States~~wholly ofowned ~~America~~subsidiary, Planktos.

~~The accompanying~~NOTE ~~financial~~2 ~~statements~~– ~~have~~Summary been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s significant operating losses and negative working capital raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding the resolution of ~~this~~Significant ~~issue~~Accounting ~~are also discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~Policies

/This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s/ financial statements. The financial statements and notes are representations of the Company’s management, which is ~~Williams~~responsible &for ~~Webster~~their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, Pand have been consistently applied in the preparation of the financial statements.S.

~~Williams &~~Accounting ~~Webster, P.S.~~Method

~~Certified~~The ~~Public~~Company’s ~~Accountants~~financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

~~Spokane, Washington~~Cash and Cash Equivalents

~~April 12~~For purposes of the statement of cash flows, ~~2008~~the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents.

~~F-2~~Concentrations

SOLAR ENERGY LIMITED
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
				December 31,		December 31,
				2007		2006
ASSETS
CURRENT ASSETS
	Cash		$	72,355	$	203,912
	Prepaid expenses			-		26,357
		TOTAL CURRENT ASSETS		72,355		230,269
OTHER ASSETS
	Deposits			4,720		4,720
	Vessels and other fixed assets, net of depreciation			787,561		-
TOTAL ASSETS			$	864,636	$	234,989
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	269,551	$	91,904
	Accrued interest - related party			10,892		9,750
	Other current liabilities			13,295		6,700
	Advances payable			480,013		-
	Note payable to related party			610,332		174,084
	Deferred revenues			-		250,000
		TOTAL CURRENT LIABILITIES		1,384,083		532,438
LONG-TERM LABILITIES
	Debenture payable, net of discount			81,261		72,850
	Accrued interest			14,064		3,252
	Derivative from debenture payable			-		18,221
		TOTAL LONG-TERM LIABILITIES		95,325		94,323
COMMITMENTS AND CONTINGENCIES
	Provision for loss on contract			-		967,500
	Minority interest			66,120		-
				66,120		967,500
STOCKHOLDERS' DEFICIT
	Common stock, 50,000,000 shares authorized; $0.0001 par value, 21,923,309 and 19,873,309 shares issued
	and outstanding, respectively			2,192		1,987
	Additional paid-in capital			14,661,141		10,753,442
	Accumulated deficit during development stage			(15,344,225)		(12,114,701)
		TOTAL STOCKHOLDERS' DEFICIT		(680,892)		(1,359,272)

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents. The Company places its cash and cash equivalents at well-known, quality financial institutions.

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