U.S Fuel (USFF) 10-Q 2007 Q3 Quarterly report

U.S. Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ending September 30, 2007

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission file number 000-31959

NUCLEAR SOLUTIONS, INC.

(Name of Small Business Issuer in its Charter)

NEVADA	88-0433815
(State of Incorporation)	(IRS Employer identification No.)

5505 Connecticut Ave NW, Suite 191 Washington, DC 20015

(Address of principal executive offices) (Zip Code)

Issuer's telephone number, (202) 787-1951

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock - $0.001 par value

Check whether the issuer (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 x No o

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

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes oNo x

Applicable on to corporate issuers

State the number of shares outstanding of each of the issuer's class of Common equity, as of November 7 2007: 68,603,365

Transitional Small Business Disclosure Format (Check One)Yes o No x

NUCLEAR SOLUTIONS, INC.

INDEX

Part I - Financial Information

Item 1.	Consolidated Financial Statements:
	Condensed Consolidated Balance Sheet - September 30, 2007
	(unaudited)	3
	Condensed Consolidated Statements of Operations - For
	the three and nine months ended September 30, 2007
	and 2006 (unaudited)	4
	Condensed Consolidated Statement of Deficiency in Stockholders' Equity
	For the period January 1, 2007 to September 30, 2007 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows - For
	the nine months ended September 30, 2007 and 2006
	(unaudited)	6
	Notes to Condensed Consolidated Financial Statements
	(unaudited)	7
Item 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS	12
Item 3.	Quantitative and Qualitative
	Disclosures About Market Risk	13
Item 4.	Controls and Procedures	14
Part II - Other Information
Item 1.	LegalProceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales
	of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Submission of Matters to a Vote of Security Holders	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
Signatures

2

PART I-FINANCIAL INFORMATION

Item 1.Financial Statements

NUCLEAR SOLUTIONS ,INC

AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEET

	September 30,			December 31,
	2007			2006
	(unaudited)
ASSETS
Current assets:
Cash	$	1,855		$	31,451
Prepaid Expenses		115,000			9,200
Total current assets		116,855			40,651
Property and equipment, net of accumulated depreciation
of $26,667 and $21,718 as of September 30, 2007 and December 31, 2006 respectively		8,977			13,926
Other assets		1,800			9,300
Total assets	$	127,632		$	63,877
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	2,655,719		$	3,179,367
Accrued executive compensation		995,112			1,033,392
Convertible notes payable - related parties, net of discount of $ 8,131
and $0 as of September 30, 2007 and December 31, 2006 respectively (Note 4)		42,869			39,000
Convertible notes payable - other, net of discount of $80,096 and
and $0 as of September 30, 2007 and December 31, 2006 respectively (Note 4)		786,977			903,711
Total current Liabilities		4,480,677			5,155,470
Derivative liability (Note 4)		122,978			-
Total liabilities		4,603,655			5,155,470
Commitments and contingencies
Deficiency in stockholders' equity (Note 5)
Preferred stock, $0.0001 par value; 10,000,000 shares
authorized, no shares issued and outstanding
Common stock, $0.0001 par value; 100,000,000
shares authorized, 66,053,365 and 53,665,644 issued and
outstanding as of September 30, 2007 and December 31, 2006 respectively		6,605			5,367
Additional paid-in capital		15,237,320			10,927,066
Deferred equity based expense		(976,834	)		(605,954	)
Accumulated deficit		(18,743,114	)		(15,418,072	)
Total deficiency in stockholders' equity		(4,476,023	)		(5,091,593	)
Total liabilities and deficiency in stockholders' equity	$	127,632		$	63,877

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

3

NUCLEAR SOLUTIONS, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF LOSSES

(unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2007			2006			2007			2006
Revenue	$	-		$	203,000		$	100,000		$	223,000
Executive compensation		13,750			27,500			41,250			82,500
Consulting		472,053			492,385			1,959,115			1,978,841
Legal and professional fees		305,812			187,032			724,256			589,611
General and administrative expenses		35,282			27,611			116,179			96,359
Depreciation and amortization		1,625			1,626			4,949			4,326
					-
		828,522			736,154			2,845,749			2,751,637
Loss from operations		(828,522	)		(533,154	)		(2,745,749	)		(2,528,637	)
Other Income(expenses)
Interest expense		(296,489	)		(36,775	)		(497,425	)		(110,117	)
Change in fair value of derivative liability		(9,249	)		-			(81,869	)		-
Loss before provision for income taxes		(1,134,260	)		(569,929	)		(3,325,043	)		(2,638,754	)
Provision for income taxes		-			-			-			-
Net loss	$	(1,134,260	)	$	(569,929	)	$	(3,325,043	)	$	(2,638,754	)
Basic and diluted loss per share	$	(0.02	)	$	(0.01	)	$	(0.06	)	$	(0.05	)
Weighted average number of common shares
outstanding, basic and diluted		62,014,227			50,242,564			58,688,169			48,244,164

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

4

NUCLEAR SOLUTIONS, INC

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY

FOR THE PERIOD JANUARY 1, 2007 TO SEPTEMBER 30, 2007

(unaudited)

													Total Deficiency
	Common Stock				Additional		Deferred Equity			Accumulated			in Stockholders'
	Shares		Amount		Paid - In Capital		Based Expense			Deficit			Equity
Balance December 31, 2006		53,665,644	$	5,367	$	10,927,066	$	(605,954	)	$	(15,418,071	)	$	(5,091,592	)
Shares issued for services		3,291,209		329		1,896,091		-			-			1,896,420
Shares issued for accrued expenses		1,946,512		194		1,334,112		-			-			1,334,306
Shares issued for payment of debt and interest		7,150,000		715		609,180		-			-			609,895
Beneficial conversion feature		-		-		470,871		-			-			470,871
Deferred compensation		-		-		-		(1,928,620	)		-			(1,928,620	)
Amortization of deferred compensation		-		-		-		1,557,740			-			1,557,740
Net loss		-		-		-		-			(3,325,043	)		(3,325,043	)
Balance September 30, 2007		66,053,365	$	6,605	$	15,237,320	$	(976,834	)	$	(18,743,114	)	$	(4,476,023	)

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

5

NUCLEAR SOLUTIONS ,INC

AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	For The Nine Months Ended September 30,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(3,325,043	)	$	(2,638,754	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		4,950			4,326
Amortization of debt discount - beneficial conversion feature of
convertible note and warrants		423,753			31,000
Change in fair value of derivative liability		81,869			-
Stock and warrants issued for services		3,454,160			2,090,678
Changes in operating assets and liabilities:
Accounts receivable		-			60,000
Prepaid Expenses		(105,800	)		-
Other Assets		7,500			(7,500	)
Accounts payable and accrued expenses		(1,044,685	)		526,500
Accrued executive compensation		(38,280	)		(24,088	)
Net cash (used in) provided by operating activities		(541,576	)		42,162
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		-			(7,602	)
Net cash used in investing activities		-			(7,602	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt		511,980			41,000
Proceeds fro sale of common stock		-			25,000
Net cash provided by financing activities		511,980			66,000
Net (decrease) increase in cash		(29,596	)		100,560
Cash, beginning of period		31,451			22,696
Cash, end of period	$	1,855		$	123,256
Supplemental disclosures:
Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non-cash investing and financial activities:
Amortization of debt discount - beneficial conversion feature of
convertible note and warrants	$	423,753		$	31,000
Payment of debt and interest with common stock	$	609,895		$	303,300
Beneficial conversion discount	$	511,980		$	31,000
Payment of accrued expenses with common stock	$	1,334,306		$	1,024,366

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

6

NUCLEAR SOLUTIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2007

(UNAUDITED)

NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

Nuclear Solutions, Inc. (the "Company") was organized February 27, 1997 under the laws of the State of Nevada, as Stock Watch Man, Inc. On September 12, 2001, the Company amended its articles of incorporation to change its name to Nuclear Solutions, Inc.

On September 2, 2005 the Company formed a wholly owned subsidiary, Fuel Frontiers Inc., formally, Future Fuels, Inc., which has had minimal operations through September 30, 2007.

On July 31, 2006 the company formed a wholly owned subsidiary, Liquidyne Fuels, which has had no activity through September 30, 2007.

The unaudited condensed consolidated financial statements include the accounts of the Company and Fuel Frontiers, Inc. All significant intercompany transactions and balances have been eliminated in the consolidated financial statement.

Business

Nuclear Solutions, Inc. is engaged in the research, development, and commercialization of innovative product technologies, which are generally early-stage, theoretical or commercially unproven. We operate a highly technical business and our primary mission is to develop advanced product technologies to address emerging market opportunities in the fields of homeland security, nanotechnology, and nuclear remediation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Regulation S-B promulgated by the Securities and Exchange Commission and do not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, these interim financial statements include all adjustments, which include only normal recurring adjustments, necessary in order to make the financial statements not misleading. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company and management's discussion and analysis of financial condition and results of operations included in the Company's Annual Report for the year ended December 31, 2006 as filed with the Securities and Exchange Commission on Form 10-KSB.

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NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Loss Per Share

Basic and diluted loss per common share for all periods presented is computed based on the weighted average number of common shares outstanding during the year as defined by SFAS No. 128, "Earnings Per Share". The assumed exercise of common stock equivalents was not utilized since the effect would be anti-dilutive. At September 30, 2007 and 2006, the Company had 10,304,499 and 12,409,172 potentially dilutive securities, respectively.

Revenue Recognition

Revenues are recognized in the period that services are provided. For revenue from product sales, the Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition ("SAB104"), which superceded Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements ("SAB101"). SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required. Payments received in advance are deferred.

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"), Multiple-Deliverable Revenue Arrangements. EITF 00-21 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing EITF 00-21 on the Company's consolidated financial position and results of operations was not significant.

Licensing fee income generally is being recognized ratably over the term of the license. The Company's management has determined that the collectibility and length of time to collect the remaining contracted price due from its licensee can not be reasonably assured. Accordingly, revenues will be recognized as collected.

Stock Based Compensation

We have adopted the fair value recognition provisions of Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 123(R), ”Accounting for Stock-Based Compensation”, to account for compensation costs under our stock option plans. We previously utilized the intrinsic value method under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (as amended) ("APB 25").

8

New Accounting Pronouncements

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” SFAS 159 permits entities to choose to measure many financial instruments, and certain other items, at fair value.   SFAS 159 applies to reporting periods beginning after November 15, 2007. The adoption of SFAS 159 is not expected to have a material impact on the Company’s financial condition or results of operations.

Reclassifications

Certain items in the 2006 financial statements have been reclassified to conform to the current period presentation.

NOTE 3 - GOING CONCERN

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company has a net loss of $3,325,043 for the nine months ended September 30, 2007, a working capital deficiency of $4,363,822 at September 30, 2007 and a stockholders' deficiency of $4,476,023 at September 30, 2007. These factors raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional funds and implement its business plan. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - CONVERTIBLE DEBT

Notes payable at September 30, 2007 and December 31, 2006 are as follows:

	September 30,			December 31,
	2007			2006
	(unaudited)
Denise Barbato, bearing interest at 10% per year, convertible into common stock
at $0.084 per share. The note is payable on December 31, 2007	$	336,093		$	862,711
Denise Barbato, bearing interest at 10% per year, convertible into common stock
at $0.084 per share. The notes are payable on December 31, 2007		431,000			31,000
Global Atomic Inc. demand note payable to related party at 10% per year,
convertible into common stock at $1.00 per share		4,000			4,000
International Fission demand note payable to related party at 10% per year,
convertible into common stock at $1.00 per share		15,000			15,000
Jackie Brown, demand note payable to related party, non -interest bearing,
convertible into common stock at $1.00 per share		20,000			20,000
Long Lane Capital demand note at 12 % per year		--			10,000
Long Lane Capital Credit Facility, convertible into common stock
At a 50% discount to market; interest rate 12%; maturity March 28, 2008		99,980			--
John Powers note, convertible into common stock
At a 50% discount to market; interest rate 12%; maturity June 4, 2008		12,000			--
Total notes payable		918,073			942,711
Less: current portion		(918,073	)		(942,711	)
Balance notes payable (long term portion)	$	--		$	--

9

During the nine months ended September 30, 2007 the Company received advances from Denise Barbato in the amount of $400,000. The advances are convertible into common stock at the rate of $0.084 per share and the due date has been extended to December 31, 2007. Since the advances are convertible at a discount to market, the Company has recorded a debt discount related to the beneficial conversion feature in the amount of $400,000, based on the proceeds received. The discount is being amortized over the term of the debt, through December 31, 2007. Amortization of debt discount for the nine and three month periods ended September 30, 2007 was $369,114 and $240,234, respectively.

On January 17, 2007 the Company issued 2,125,000 shares of common stock as payment of $164,486 of principle and $14,014 of accrued interest to Denise Barbato.

On June 20, 2007 the Company issued 2,000,000 shares of common stock as payment of $147,601 of principle and $20,399 of accrued interest to Denise Barbato.

On September 12, 2007 the Company issued 3,000,000 shares of common stock as payment of $214,532 of principle and $37,468 of accrued interest to Denise Barbato.

In March and April, 2007 the Company received an advance from Long Lane Capital in the amount of $99,980, pursuant to a $100,000 credit facility. The advance is convertible into common stock at the rate of 50% of market value and is due in March 2008. In connection with the total credit facility we have issued a common stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35 per share. In accordance with EITF 00-27, a portion of the proceeds of the current advance was allocated to the warrant associated with the current debt based on its relative fair value, which totaled $70,871 using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes model are as follows: (1) dividend yield of 0%; (2) expected volatility of 100%, (3) risk-free interest rate of 4.5%, and (4) expected life of 2 years. We have also recorded a beneficial conversion feature in the amount of $29,109, based on the proceeds allocated to the debt. The aggregate discount is being amortized over the term of the debt, through March 28, 2008. Amortization of debt discount for the three and nine month periods ended September 30, 2007 was $26,396 and $50,772, respectively.

The embedded conversion option related to the Long Lane Capital credit facility is accounted for under EITF issue No. 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock". We have determined that the embedded conversion option is a derivative liability. Accordingly, the embedded conversion option will be marked to market through earnings at the end of each reporting period. The conversion option is valued using the Black-Scholes valuation model. For the three and nine month periods ended September 30, 2007, the Company reflected a charge of $12,961 and $80,069, respectively, representing the change in the value of the embedded conversion option.

On June 4, 2007 the Company received $12,000 pursuant to a promissory note payable to John Powers, a director, bearing interest at 12% per year and maturing on June 4, 2008. The note is convertible into common stock at the rate of 50% of market value. We have recorded a beneficial conversion feature in the amount of $12,000. The discount is being amortized over the term of the debt, through June 4, 2008. Amortization of debt discount for the three and nine month periods ended September 30, 2007 was $3,016 and $3,868, respectively.

The embedded conversion option related to the Powers note is accounted for under EITF issue No. 00-19. We have determined that the embedded conversion option is a derivative liability. Accordingly, the embedded conversion option will be marked to market through earnings at the end of each reporting period. The conversion option is valued using the Black-Scholes valuation model. For the three and nine month periods ended September 30, 2007, the Company reflected a credit of $3,712 and a charge of $1,800, respectively, representing the change in the value of the embedded conversion option.

On March 16, 2007 the Company issued 25,000 shares of common stock as payment of $10,000 of principle and $1,395 of accrued interest to Long Lane Capital.

10

NOTE 5 - STOCKHOLDER'S EQUITY

During the nine months ended September 30, 2007 the Company issued an aggregate of 3,291,209 shares of common stock, valued at $1,896,091, for consulting services.

During the nine months ended September 30, 2007 the Company issued 1,946,512 shares as payment of expenses accrued at December 31, 2006 in the amount of $1,334,306.

During the nine months ended September 30, 2007 the Company issued 7,125,000 shares of common stock as payment of $526,618 of principal and $71,882 of accrued interest due to Denise Barbato.

During March 2007 the Company issued 25,000 shares of common stock as payment of $11,395 of principle and interest due to Long Lane Capital.

In connection with the Long Lane Capital credit facility we have issued a common stock purchase warrant for 500,000 shares of common stock, exercisable at $0.35 per share.

During the nine months ended September 30, 2006 the Company issued an aggregate of 1,446,099 shares of common stock, valued at 1,104,715 for consulting services.

During the nine months ended September 30, 2006 the Company issued an aggregate of 2,171,871 shares as payment of expenses accrued at December 31, 2005 in the amount of $1,056,445.

During the nine months ended September 30,2006 the Company issued 2,800,000 shares of common stock as payment of $235,200 of interest accrued to Denise Barbato.

In April 2006 the company issued 309,545 shares to Long Lane capital valued at $68,100 as a payment for the February 2005 note of $60,000 plus accrued interest of $8,100.

NOTE 6- MAJOR SUPPLIERS AND CUSTOMERS

The Company licensed its technology to one customer during the three and nine months ended September 30, 2007 and 2006.

NOTE 7 - SUBSEQUENT EVENTS

Subsequent to September 30, 2007, the company issued 2,550,000 restricted shares to Denise Barbato as a partial payment on the January 8, 2004 debt consolidated agreement and 74,636 registered shares valued at $29,000 for consulting services.

On October 29, 2007 the company received a conversion notice from Long Lane capital, Inc. electing to exercise its conversion rights under the Revolving Line of Credit Agreement dated March 22, 2007 and requesting the delivery of 1,174,648 shares as a payment in full for the outstanding demand note principle balance of $100,000 plus $6,305.70 accrued interest through October 31, 2007.

11

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

When used in this Form 10-Q and in our future filings with the Securities and Exchange Commission, the words or phrases will likely result, management expects, or we expect, will continue, is anticipated, estimated or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speak only as of the date made. These statements are subject to risks and uncertainties, some of which are described below. Actual results may differ materially from historical earnings and those presently anticipated or projected. We have no obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements.

Business Overview

Nuclear Solutions, Inc. is engaged in the research, development, and commercialization of innovative product technologies and processes, which are generally early-stage, theoretical or commercially unproven. We operate a highly technical business and our primary mission is to develop advanced product technologies to address emerging market opportunities in the fields of nuclear technology and synthetic and bio-fuels. The company, through its subsidiaries Fuel Frontiers, Inc. and Liquidyne Fuels, Inc. is also engaged in the development of facilities to produce alternative fuels from waste materials and bioethanol through conventional and commercially available fermentation processes.

Recent Developments   

On April 13, 2007, we entered into an engineering and design agreement whereby we pre-paid $100,000 for engineering services related to the construction of our waste to ultra-clean diesel projects.

Results of Operations

REVENUES: The Company reported revenues of $100,000 from our existing technology licence agreement, for the nine months ended September 30, 2007 as compared with revenues from continuing operations of $223,000 for the nine months ended September 30, 2006. The decrease in revenues is attributable to our policy of recognizing revenues on a cash basis. During the third quarter of 2007, we recieved and recognized $0 in revenue in the three months ended September 30, 2007.

Business Concentration

For the year ended December 31, 2006, and the nine month period ended September 30, 2007, the balance of all accounts receivables was from one customer.

TOTAL COSTS AND EXPENSES: Total costs and expenses from continuing operations increased from $2,861,754 for the nine months ended September 30, 2006 to $3,425,043 for the nine months ended September 30, 2007. The principal reason for this increase was due to an increase in legal, and professional fees as a result of increased business development activites.

OPERATING EXPENSES: Operating expenses from continuing operations increased from $2,751,637 for the nine months ended September 30, 2006 to $2,845,749 for the nine months ended September 30, 2007. This increase was primarily due to increased business development activites, as stated above. Depreciation expense increased for the first nine months of 2007 versus the first nine months of 2006, increasing from $4,326 for the nine months ended September 30, 2006 to $4,949, for the nine months ended September 30, 2007. This slight increase reflects no significant increase or decrease in depreciable assets for the respective periods.

12

INTEREST EXPENSE: Interest expense increased from $110,117 for the nine months ended September 30, 2006 to $497,425 for the nine months ended September 30, 2007. This increase is due primarily to increased debt to finance company operations.

SALES, GENERAL AND ADMINISTRATIVE: Sales, General & Administrative

Expenses increased by $19,820 during the nine months ended September 30, 2007 to a total amount of $116,179 as compared to $96,359 for the nine months ended September 30, 2006. The increase was due to increased travel and general business expenses.

NET LOSS: The Company incurred a net loss of ($3,325,043) for the nine months ended September 30, 2007, compared with a net loss of ($2,638,754) for the nine months ended September 30, 2006, which reflects a year-to-year increase in the amount of loss for the period of $686,289. The principal reason for this increase was due to incurring more operating expenses as a result of increased business development activites.

LIQUIDITY AND CAPITAL RESOURCES:

As of September 30, 2007, we had a working capital deficit of $4,363,822 which compares to a working capital deficit of $ 4,097,020 as of September 30, 2006. As a result of our operating losses for the nine month period ended September 30, 2007, we generated a cash flow deficit of $541,576 from operating activities. Cash flows used in investing activities was $0 during the period. Cash flows provided by financing activities were $511,980 on proceeds from short-term notes payable.

In addition to the revenue provided by the license agreement with IPTH, additional financing will be required in order to meet our current and projected cash flow deficits from operations and development. We are seeking financing in the form of equity capital in order to provide the necessary working capital. We currently have no commitments for financing. There is no guarantee that we will be successful in raising the funds required. We intend to use the proceeds derived from revenues or financing to pay salaries, and general and administrative expenses to maintain the core operations of the company. By adjusting our operations and development to the level of capitalization, we believe that the annual expected license revenue of $970,000, if collected, will be sufficient to sustain the basic company operations over the next 12 months.

Management believes it has sufficient capital resources to meet basic General and Administrative expenses through the next twelve months. However, if thereafter, we are not successful in generating sufficient liquidity from operations or in raising sufficient capital resources, on terms acceptable to us, this could have a material adverse effect on our business, results of operations liquidity and financial condition.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Cash and Cash Equivalents

We have historically invested our cash and cash equivalents in short-term, fixed rate, highly rated and highly liquid instruments which are reinvested when they mature throughout the year. Although our existing investments are not considered at risk with respect to changes in interest rates or markets for these instruments, our rate of return on short-term investments could be affected at the time of reinvestment as a result of intervening events. As of September 30, 2007, we had cash and cash equivalents aggregated $1,855.

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The Company does not issue or invest in financial instruments or their derivatives for trading or speculative purposes.  The operations of the Company are conducted primarily in the United States, and, are not subject to material foreign currency exchange risk. Although the Company has outstanding debt and related interest expense, market risk of interest rate exposure in the United States is currently not material.

Debt

The interest rate on our outstanding debt obligations are fixed and are not subject to market fluctuations. Some of our convertible debt may have its interest costs increased if the debt is converted into common stock because the conversion price is a function of the market price of our common stock.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

As of the end of the reporting period, March 31, 2007, we carried out an evaluation, under the supervision and with the participation of our management, including the Company's Chairman and Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported within required time periods specified by the SEC's rules and forms. Based upon that evaluation, the Chairman and the Chief Financial Officer concluded that our disclosure controls and procedures were not completely effective in timely alerting them to material information relating to the Company and required to be included in the Company's period SEC filings. The particular weakness identified related to the reporting of the issuance of unregistered common stock which exceeded one percent of our issued and outstanding common stock which should have been reported on a Form 8-K Current Report. The Company failed to file the Form 8-K due to the fact that on December 31, 2006, the Company exceeded the public float limitations of Regulation S-B and was required to report under Regulation S-K. This loss of Regulation S-B eligibility required the reporting of unregistered equity securities when the issuance exceeded one percent of the Company’s issued and outstanding equity securities, rather than five percent as required by Regulation S-B. As a result of loss of Regulation S-B eligibility, the Company failed to timely report the issuance of unregistered common stock in January, September and October 2007. Failure to timely report this issuance was a material weakness. The Company has taken corrective action and changed its reporting procedures in a manner which it believes is consistent with Regulation S-K reporting requirements.

(b) Changes in Internal Control.

Subsequent to the date of such evaluation as described in subparagraph(a)above, and noted above, there were no changes in our internal controls or other factors that could significantly affect these controls, including any corrective action with regard to significant deficiencies and material weaknesses.

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(c) Limitations.

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls or internal controls over financial reporting will prevent all errors or all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and any design may not succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitation of a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II-OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is not a party to any pending material legal proceedings.

Item 1A. Risk Factors

Cautionary Factors that may Affect Future Results

We provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business and our products. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could adversely affect us.

Trends, Risks and Uncertainties

The Company has sought to identify what it believes to be the most significant risks to its business as discussed in "Risk Factors" above, but cannot predict whether or not or to what extent any of such risks may be realized nor can there be any assurances that the Company has identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to the Company's common stock.

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Limited operating history; anticipated losses; uncertainly of future results

The Company has only a limited operating history upon which an evaluation of the Company and its prospects can be based. The Company’s prospects must be evaluated with a view to the risks encountered by a company in an early stage of development, particularly in light of the uncertainties relating to the business model that the Company intends to market and the potential acceptance of the Company’s business model. The Company will be incurring costs to develop, introduce and enhance its products, to establish marketing relationships, to acquire and develop products that will complement each other, and to build an administrative organization. To the extent that such expenses are not subsequently followed by commensurate revenues, the Company's business, results of operations and financial condition will be materially adversely affected. There can be no assurance that the Company will be able to generate sufficient revenues from the sale of its products and services. The Company expects that negative cash flow from operations may exist for the next 12 months as it continues to develop and market its products and services. If cash generated by operations is insufficient to satisfy the Company's liquidity requirements, the Company may be required to sell additional equity or debt securities. The sale of additional equity or convertible debt securities would result in additional dilution to the Company's shareholders.

Risk Factors:

INTELLECTUAL PROPERTY RIGHTS

The company regards its patents, trademarks, trade secrets, and other intellectual property (collectively, the "Intellectual Property Assets") as critical to its success. The company relies on a combination of patents, trademarks, and trade secret and copyright laws, as well as confidentiality procedures, contractual provisions, and other similar measures, to establish and protect its Intellectual Property Assets.

We generally enter into confidentiality and invention agreements with our employees and consultants. However, patents and agreements and various other measures we take to protect our intellectual property from use by others may not be effective for various reasons, including the following:

Our pending patent applications may not be granted for various reasons, including the existence of similar patents or defects in the applications; arties to the confidentiality and invention agreements may have such agreements declared unenforceable or, even if the agreements are enforceable, may breach such agreements;

The costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement cost prohibitive;

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Even if we enforce our rights aggressively, injunctions, fines and other penalties may be insufficient to deter violations of our intellectual property rights; and

Other persons may independently develop proprietary information and techniques that, although functionally equivalent or superior to our intellectual proprietary information and techniques, do not breach our patented or unpatented proprietary rights.

Because the value of our company and common stock is rooted primarily in our proprietary intellectual property, our inability to protect our proprietary intellectual property or gain a competitive advantage from such rights could have a material adverse effect on our business.

In addition, we may inadvertently be infringing on the proprietary rights of other persons and may be required to obtain licenses to certain intellectual property or other proprietary rights from third parties. Such licenses or proprietary rights may not be made available under acceptable terms, if at all. If we do not obtain required licenses or proprietary rights, we could encounter delays in product development or find that the development or sale of products requiring such licenses is foreclosed.

We anticipate that any business model we develop will be subject to change. At this time it is impossible for us to predict the degree to which demand for our products will evolve or whether any potential market will be large enough to provide any meaningful revenue or profit for us.

We have not been profitable since our inception. Although we believe that we may recognize revenues during the next twelve months based on our licence agreement with IPTH, and expressions of interest from third parties, there can be no assurances as to when and whether we will be able to commercialize our products and technologies and realize any revenues. Our technologies have never been utilized on a large-scale commercial basis.

We expect that we will continue to generate losses until at least such time as we can commercialize our technologies. No assurance can be given that we can complete the development of any technology or that, if any technology is fully developed, it can be manufactured and marketed on a commercially viable basis. Furthermore, no assurance can be given that any technology will receive market acceptance. We are subject to all risks inherent in the establishment of a developing or new business. Certain nuclear technologies we are developing may be regulated now or in the future by the

United States Government and may subject to regulatory requirements or export restrictions.

Management of Growth

The Company expects to experience growth in the number of employees relative to its current levels of employment and the scope of its operations. In particular, the Company may need to hire scientists, as well as sales, marketing and administrative personnel. Additionally, acquisitions could result in an increase in employee headcount and business activity. Such activities could result in increased responsibilities for management. The Company believes that its ability to attract, train, and retain qualified technical, sales, marketing, and management personnel, will be a critical factor to its future success. During strong business cycles, the Company may experience difficulty in filling its needs for qualified personnel.

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The Company's future success will be highly dependent upon its ability to successfully manage the expansion of its operations. The Company's ability to manage and support its growth effectively will be substantially dependent on its ability to implement adequate financial and management controls, reporting systems, and other procedures and hire sufficient numbers of financial, accounting, administrative, and management personnel. The Company is in the process of establishing and upgrading its financial accounting and procedures. There can be no assurance that the Company will be able to identify, attract, and retain experienced accounting and financial personnel. The Company's future operating results will depend on the ability of its management and other key employees to implement and improve its systems for operations, financial control, and information management, and to recruit, train, and manage its employee base. There can be no assurance that the Company will be able to achieve or manage any such growth successfully or to implement and maintain adequate financial and management controls and procedures, and any inability to do so would have a material adverse effect on the Company's business, results of operations, and financial condition.

The Company's future success depends upon its ability to address potential market opportunities while managing its expenses to match its ability to finance its operations. This need to manage its expenses will place a significant strain on the Company's management and operational resources. If the Company is unable to manage its expenses effectively, the Company's business, results of operations, and financial condition may be materially adversely affected.

Risks associated with acquisitions

As a major component of its business strategy, the Company expects it may acquire assets, and businesses, and, or technologies relating to or complementary to its business model. Any acquisitions by the Company would involve risks commonly encountered in acquisitions of companies. These risks would include, among other things, the following: the Company could be exposed to unknown liabilities of the acquired companies; the Company could incur acquisition costs and expenses higher than it anticipated; fluctuations in the Company's quarterly and annual operating results could occur due to the costs and expenses of acquiring and integrating new businesses or technologies; the Company could experience difficulties and expenses in assimilating the operations and personnel of the acquired businesses; the Company's ongoing business could be disrupted and its management's time and attention diverted; the Company could be unable to integrate successfully.

Liquidity and Working Capital Risks; Need for Additional Capital to Finance Growth and Capital Requirements

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We have had limited working capital and we are relying upon notes (borrowed funds) to operate. We may seek to raise capital from public or private equity or debt sources to provide working capital to meet our general and administrative costs until net revenues make the business self-sustaining. We cannot guarantee that we will be able to raise any such capital on terms acceptable to us or at all. Such financing may be upon terms that are dilutive or potentially dilutive to our stockholders. If alternative sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans in accordance with the extent of available funding.

New Business

We are a new business and you should consider factors which could adversely affect our ability to generate revenues, which include, but are not limited to, maintenance of positive cash flow, which depends on our ability both to raise capital and to obtain additional financing as required, as well as the level of sales revenues.

Potential fluctuations in quarterly operating results -

Our quarterly operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the interest in our products; seasonal trends in purchasing, the amount and timing of capital expenditures and other costs relating to the development of our products; price competition or pricing changes in the industry; technical difficulties or system downtime; general economic conditions. Our quarterly results may also be significantly impacted by the impact of the accounting treatment of acquisitions, financing transactions or other matters. Particularly at our early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that our operating results will fall below our expectations or those of investors in some future quarter.

Dependence Upon Management

Our future performance and success are dependant upon the efforts and abilities of our management team, directors and key contractors. If we lost the services key members of management or other key employees before we could get a qualified replacement, that loss could materially adversely affect our business. We do not maintain key man life insurance on any of our Management.

Lack of Independent Directors

We cannot guarantee that our Board of Directors will have a majority of independent directors in the future. In the absence of a majority of independent directors, our executive officers, who are also principal stockholders and directors, could establish policies and enter into transactions without independent review and approval thereof. This could present the potential for a conflict of interest between the Company and its stockholders generally and the controlling officers, stockholders, or directors.

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Limitation of Liability and Indemnification of Officers and Directors

Our officers and directors are required to exercise good faith and high integrity in our management affairs. Our Articles of Incorporation provide, however, that our officers and directors shall have no liability to our shareholders for losses sustained or liabilities incurred which arise from any transaction in their respective managerial capacities unless they violated their duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend or stock repurchase, or derived an improper benefit from the transaction. Our Articles and By-Laws also provide for the indemnification by us of the officers and directors against any losses or liabilities they may incur as a result of the manner in which they operate our business or conduct the internal affairs, provided that in connection with these activities they act in good faith and in a manner that they reasonably believe to be in, or not opposed to, the best interests of the Company, and their conduct does not constitute gross negligence, misconduct or breach of fiduciary obligations.

Audit's Opinion Expresses Doubt About The Company's Ability To Continue As a "Going Concern".

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the unaudited condensed consolidated financial statements, the Company has suffered recurring losses from operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Delays in the Introduction of Our Products

The Company may be subject to regulation by numerous governmental authorities. Failure to obtain regulatory approvals or delays in obtaining regulatory approvals by the Company, its collaborators or licensees would adversely affect the marketing of products developed by the Company, as well as hinder the Company's ability to generate product revenues. Further, there can be no assurance that the Company, its collaborators or licensees will be able to obtain the necessary regulatory approvals. Although the Company does not anticipate problems satisfying any of the regulations involved, the Company cannot foresee the possibility of new regulations that could adversely affect the business of the Company.

Dependence on Independent Parties to Produce our Products

The Company may be dependent upon current and future collaborations with and among independent parties to research, develop, test, manufacture, sell, or distribute our products. The Company intends to continue to rely on such collaborative arrangements. Some of the risks and uncertainties related to the reliance on such collaborations include, but are not limited to 1) the ability to negotiate acceptable collaborative arrangements, 2) the fact that future or existing collaborative arrangements may not be successful or may not result in products that are marketed or sold, 3) such collaborative relationships may actually act to limit or restrict the Company, 4) collaborative partners are free to pursue alternative technologies or products either on their own or with others, including the Company's competitors 5) the Company's partners may terminate a collaborative relationship and such termination may require the Company to seek other partners, or expend substantial additional resources to pursue these activities independently. These efforts may not be successful and may interfere with the Company's ability to manage, interact and coordinate its timelines and objectives with its strategic partners.

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Government Regulation

Our products and technologies and our ongoing research and development activities are subject to regulation for safety, efficacy and quality by numerous governmental authorities in the United States and other countries. Depending on the technology, regulatory approvals and certification may be necessary from the Department of Transportation, Department of Energy, Nuclear Regulatory Commission, Environmental Protection Agency, Department of Defense, and other federal, state, or local facilities. Failures or delays by the company or its affiliates or licensees in obtaining the required regulatory approvals would adversely affect the marketing of products that the company develops and our ability to receive product revenues or royalties.

Limited Market Due To Penny Stock

The Company's stock differs from many stocks, in that it is a "penny stock." The Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks." These rules include, but are not limited to, Rules 3a5l-l, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as amended. Because our securities probably constitute "penny stock" within the meaning of the rules, the rules would apply to us and our securities. The rules may further affect the ability of owners of our stock to sell their securities in any market that may develop for them. There may be a limited market for penny stocks, due to the regulatory burdens on broker-dealers. 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. Stockholders should be aware that, according to the Securities and Exchange Commission Release No. 34- 29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. These patterns include: - Control of the market for the security by one or a few broker- dealers that are often related to the promoter or issuer; - Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; - "Boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; - Excessive and undisclosed bid-ask differentials and markups by selling broker- dealers; and - 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. Furthermore, the "penny stock" designation may adversely affect the development of any public market for the Company's shares of common stock or, if such a market develops, its continuation. Broker-dealers are required to personally determine whether an investment in "penny stock" is suitable for customers. Penny stocks are securities (i) with a price of less than five dollars per share; (ii) that are not traded on a "recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed stocks must still meet requirement (i) above); or (iv) of an issuer with net tangible assets less than $2,000,000 (if the issuer has been in continuous operation for at least three years) or $5,000,000 (if in continuous operation for less than three years), or with average annual revenues of less than $6,000,000 for the last three years. Section 15(g) of the Exchange Act, and Rule 15g-2 of the Commission require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account. Potential investors in the Company's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock." Rule 15g-9 of the Commission requires broker- dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for the Company's stockholders to resell their shares to third parties or to otherwise dispose of them.

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Potential Inability of Officers to Devote Sufficient Time to the Operations of the Business

Our officers are not currently being paid all of their salaries. In some cases, officers are not paid at all. Unless we are able to secure additional funding for operations, we cannot guarantee that they will be able to continue to devote sufficient time to the operations of the business.

Sarbanes-Oxley Act of 2002

We will be required to evaluate our internal controls under Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the price of our shares of common stock. Pursuant to Section 404 of SOX, beginning with our annual report on Form 10-K for the fiscal year ended February 29, 2008, we will be required to furnish a report by management on our internal controls over financial reporting.  This report will contain among other matters, an assessment of the effectiveness of our internal control over financial reporting, including a statement as to whether or not our internal control over financial reporting is effective.  This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by our management.  This report must also contain a statement that our auditors have issued an attestation report on our management’s assessment of these internal controls.  Public Company Accounting Oversight Board Auditing Standard No. 2 provides the professional standards for auditors to attest to, and report on, our management’s assessment of the effectiveness of internal control over financial reporting under Section 404.

We cannot be certain that we will be able to complete our assessment, testing and any required remediation in a timely fashion.  During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that such internal control is effective.  If we are unable to assert that our internal control over financial reporting is effective (or if our auditors are unable to attest that our management’s report is fairly stated or they are unable to express an opinion on the effectiveness of our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on our stock price.

Failure to comply with the new rules may make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance.  We may be forced to accept reduced policy limits and coverage and/or incur substantially higher costs to obtain the same or similar coverage.  The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of directors, or as executive officers.

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Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.

During this fiscal quarter, we issued the following common stock:

On July 31, 2007, the company issued Brian Ettinger 527,819 restricted common shares in connection with a consulting services agreement for the development of synthetic ultra-clean diesel projects. The shares were valued at $351,000.

On September 12, 2007, we issued Denise Barbato 3,000,000 common shares valued at $252,000 as a partial payment on the January 8, 2004 debt consolidation agreement.

On September 26, 2007, we issued Jackie Brown 100,000 common shares as payment for the November 12, 2003 Licensing Option Agreement consideration. The shares had been valued on that date at $8,300.

On September 28, 2007, we issued 50,000 common shares to Jim Arnold pursuant to his professional consulting agreement. The shares were valued at $17,000.

On October 24, 2007, we issued Denise Barbato 2,550,000 common shares valued at $214,200 as a partial payment on the January 8, 2004 debt consolidation agreement.

We believe the securities issued above were issued in a private transaction pursuant to Section 4(2) of the Securities Act of 1933, as amended, (the “Securities Act”). These shares are considered restricted securities and may not be publicly resold unless registered for resale with appropriate governmental agencies or unless exempt from any applicable registration requirements.

Item 3. Defaults upon Senior Securities. None.

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

No matter was submitted to a vote of the security holders, through the solicitation of proxies or otherwise, during the quarter of the fiscal year covered by this report.

Item 5. Other Information.

None.

Qualification of Contents of the Transaction Summary:

The following paragraphs contain a limited summary of the principal terms of a Development Agreement and two amendments executed by Fuel Frontiers, Inc., a company subsidiary. The summary below is qualified in its entirety by the terms and conditions of the Development Agreement dated July 30, 2007, the First Amendment of Development Agreement dated August 8, 2007 and the Second Amendment of Development Agreement dated November 12, 2007, all of which are attached to this report as Exhibits 10.1, 10.2 and 10.3 respectively.

Development Agreement and Amendments:

The company received $200,000 as partial payment associated with a Development Agreement with Kentucky Fuel Associates, Inc. (herein, “KFA) which was originally signed on July 30, 2007 and subsequently amended twice. The purpose of the Development Agreement is to initially explore development opportunities for a coal-to-gas-to-liquid fuels (“CTL”) production facility in the State of Kentucky. FFI has focused corporate efforts in the area of CTL production technologies. KFA has expertise and business relationships in Kentucky which may compliment FFI’s CTL efforts.

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KFA has agreed to provide FFI with an initial funding of $2,000,000 for exclusive use in connection with FFI’s costs and expenses associated with the development of a CTL production facility in Kentucky. The $200,000 payment represents an initial advance on the $2,000,000.

FFI has granted KFA the exclusive right to locate and develop CTL production projects in the State of Kentucky and the non-exclusive right to perform the same functions throughout the United States. KFA will also have the right to match any third party’s proposals for CTL production projects in the United States, subject to FFI’s approval.

In consideration of the Development Agreement and for each site located by KFA and accepted by FFI for development, FFI has agreed to pay KFA Seven (7%) percent of the net pre-tax income for each CTL production facility for the life of each facility. Additionally, in consideration for KFA’s $2,000,000 funding, FFI will grant KFA a two and one-half (2.5%) percent equity interest in the first CTL facility developed by KFA.

The Development Agreement has a ten (10) year term and is renewable, at the election of the parties, for an additional five (5) year term. The Agreement may be terminated for a breach of any material provision which remains uncured for more than ninety (90) days following written notice of the breach.

The reader is cautioned not to place undue reliance on the prospect that FFI will receive the initial funding balance of $1,800,000 until it is actually paid to the company.

Item 6. Exhibits

(a) Exhibits:

10.1 Development Agreement dated July 30, 2007

10.2 First Amendment of Development Agreement dated August 8, 2007

10.3 Second Amendment of Development Agreement dated November 12, 2007

31.1 Chief Executive Officer-Section 302 Certification pursuant to Sarbanes-Oxley Act.

31.2 Chief Financial Officer-Section 302 Certification pursuant to Sarbanes-Oxley Act.

32.1 Chief Executive Officer-Section 906 Certification pursuant to Sarbanes-Oxley Act.

32.2 Chief Financial Officer-Section 906 Certification pursuant to Sarbanes-Oxley Act.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: November 14, 2007.

NUCLEAR SOLUTIONS, INC.

By:	/s/Patrick Herda	By:	/s/Kenneth Faith
	Patrick Herda		Kenneth Faith
	Title: President, CEO		Title: CFO

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