20-F 1 v168856_20f.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 20-F

¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended May 31, 2009

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

For the transition period: N/A

¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report: N/A

Commission file number 0-32861

GLOBAL ENVIRONMENTAL ENERGY CORP.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Bahamas

(Jurisdiction of incorporation or organization)

P.O. Box CB-13277, Cable Beach, Nassau, Bahamas

(Address of principal executive offices)

Dr. Christopher McCormack, Chief Executive Officer

P.O. Box CB-13277, Cable Beach, Nassau, Bahamas

Phone: +1 242 323 0086 Fax: +1 561 892 7930

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act. None

Securities registered or to be registered pursuant to Section 12(g) of the Act.

Common Stock

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. N/A

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.125,661,618 shares of Common Stock

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ¨ Yes x No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨ Yes ¨ No

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

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP x

International Financial Reporting Standards as issued by the International Accounting Standards Board o

Other ¨

Indicate by check mark which financial statement item the registrant has elected to follow.

x Item 17 ¨ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

GLOBAL ENVIRONMENTAL ENERGY CORP.

TABLE OF CONTENTS

		Page
PART I

Item 1.	Identity of Directors, Senior Management and Advisors	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
Item 4.	Information on the Company	6
Item 4A.	Unresolved Staff Comments	16
Item 5.	Operating and Financial Review and Prospects	16
Item 6.	Directors, Senior Management and Employees	22
Item 7.	Major Shareholders and Related Party Transactions	25
Item 8.	Financial Information	26
Item 9.	The Offer and Listing	26
Item 10.	Additional Information	28
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 12.	Description of Securities Other Than Equity Securities	31

PART II

Item 13.	Defaults, Dividend Arrangements and Delinquencies	31
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	31
Item 15T.	Controls and Procedures	31
Item 16A.	Audit Committee Financial Expert	31
Item 16B.	Code of Ethics	32
Item 16C.	Principal Accountant Fees and Services	32
Item 16D.	Exemptions from the Listing Standards for Audit Committees	32
Item 16E.	Purchase of Equity Securities by the Issuer and Affiliated Purchasers	32
Item 16F.	Change in Registrant’s Certifying Accountant	32
Item 16G.	Corporate Governance	32

PART III

Item 17.	Financial Statements.	33
Item 18.	Financial Statements.	33
Item 19.	Exhibits	33

	Signatures	34

Introductory Note

In this Annual Report, the “Company”, “Global” and the terms “we”, “us”, “our” and similar terms refer to Global Environmental Energy Corp. (organized in The Bahamas) and its consolidated subsidiaries, unless the context otherwise requires.

Forward-Looking Statements

This report contains certain forward-looking statements and information relating to the Company that are based on the beliefs and assumptions made by the Company’s management as well as information currently available to the management. When used in this document, the words “anticipate”, “believe”, “estimate”, and “expect” and similar expressions, are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are discussed in this report under the caption “Risk Factors” in Part I, Item 3 “Key Information”. The Company does not intend to update these forward-looking statements.

PART I

Item 1.

Identity of Directors, Senior Management and Advisors.

Not applicable.

Item 2.

Offer Statistics and Expected Timetable.

Not applicable.

Item 3.

Key Information.

Selected Financial Data

The selected financial data set forth for the years ended May 31, 2009, 2008, 2007, 2006 and 2005 are derived from the Company’s audited consolidated financial statements and relate solely to the Company’s current business operations. The selected financial data should be read in conjunction with the Company’s consolidated financial statements, related notes thereto and other financial information included elsewhere in this report.

	2009		2008		2007		2006		2005

Revenues		-		-		-		-		-

General and administration expenses		23,674,922		17,549,385		23,159,781		54,188,389		26,008,302

Net loss from continuing operations		23,674,922		17,549,385		23,159,781		54,188,389		26,008,302

Interest expense		1,875,131		1,440,060		1,172,404		742,621		491,782

Net Loss		25,550,053		18,989,445		24,332,185		54,931,010		26,500,084

Net loss per share from continuing operations		0.20		0.16		0.31		0.94		0.67

Shares outstanding		125,661,618		125,031,618		115,031,618		67,045,916		49,058,921

Total Assets		112,160		2,500		2,500		2,500		27,456,904

Total Current liabilities		13,839,210		25,526,264		44,100,072		227		1,677,465

Total Long-term Liabilities		94,003,445		60,412,935		27,452,019		55,612,138		42,151,623

Common stock		251,325		250,065		230,065		134,093		98,119

Preferred stock		-		-		-		-		-

Accumulated Deficit		173,397,609		147,847,556		128,858,111		104,525,926		49,594,915

Risk Factors

In addition to other information and financial data set forth elsewhere in this report, the following risk factors should be considered carefully in evaluating the Company.

LIMITED OPERATING HISTORY. We have a limited operating history and our future operating results will depend upon many factors, including,

our ability to raise adequate working capital;

the marketing success of our Biosphere Systems;

the demand our Biosphere Systems;

the level of our competition;

our ability to attract and maintain key management and employees; and

our ability to develop markets for our Biosphere Systems;

To achieve profitable operations, we must, alone or with others, successfully execute on the factors stated above. If we are not successful in executing any of the above stated factors, our business will not be profitable and may never even generate any revenue, which may make our common shares a less attractive investment and may harm the trading of our common shares trading on the OTC Bulletin Board.

LIKELIHOOD OF LOSING INVESTMENT. At this stage of our business, even with our good faith efforts, potential investors have a high probability of losing their investment. Because the nature of our business is expected to change as a result of shifts in available technologies, competition, and the development of new and improved technology, management forecasts are not necessarily indicative of future operations and should not be relied upon as an indication of future performance. Our Management may incorrectly estimate projected occurrences and events within the timetable of its business plan, which would have an adverse effect on our results of operations and, consequently, make our common shares a less attractive investment and harm the trading of our common shares trading on the OTC Bulletin Board. Investors may find it difficult to sell their shares on the OTC Bulletin Board.

NEED FOR ADDITIONAL CAPITAL. If capital is not available to us to fund future operations, we will not be able to pursue our business plan and operations would come to a halt and our common shares would be nearly worthless. We will require substantial additional capital to develop our biosphere business. Because we currently do not have any cash flow from operations we need to raise additional capital, which may be in the form of loans from current shareholders and/or from public and private equity offerings. Our ability to access capital will depend on our success in participating in projects or biosphere sales at profitable prices. It will also be dependent upon the status of the capital markets at the time such capital is sought. Should sufficient capital not be available, the development of our business plan could be delayed and, accordingly, the implementation of our business strategy would be adversely affected. In such event it would not be likely that investors would obtain a profitable return on their investments or a return of their investments at all.

DEPENDENCE ON CHIEF EXECUTIVE OFFICER. We are heavily dependent on Dr. CA McCormack, our CEO, President and Chairman, both technically and financially. The loss of Dr. CA McCormack, whose knowledge, leadership, technical expertise and finance upon which we rely, would harm our ability to execute our business plan. Our success depends heavily upon the continued contributions of Dr. CA McCormack, whose knowledge, leadership and technical expertise would be difficult to replace. Our success is also dependent on our ability to retain and attract experienced engineers, and other technical and professional staff. We do not maintain any key person insurance on Dr. CA McCormack. If we were to lose his services, our ability to execute our business plan would be harmed and we may be forced to cease operations until such time as we could hire a suitable replacement for Dr. CA McCormack.

OUR BUSINESS IS SUBJECT TO VARIOUS OPERATING RISKS. The MSW recycling business, biosphere manufacturing and power generation, are all businesses that involve numerous uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses. Our operations and activities may be unsuccessful for many reasons, including weather, cost overruns, equipment shortages and mechanical difficulties. Moreover, the successful manufacture and deployment of a biosphere system does not ensure a profit on investment. A variety of factors, both local and market-related, can cause an operational biosphere to become uneconomical or only marginally economical.

Electricity generation at land fill sites involves a variety of operating risks, including:

fires;

explosions;

natural disasters, such as hurricanes and other adverse weather conditions;

pipe, cement, or pipeline failures;

environmental hazards, such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases.

If we experience any of these problems, it could effect operations, gathering systems and processing facilities, which could adversely affect our ability to conduct operations. We could also incur substantial losses as a result of:

injury or loss of life;

severe damage to and destruction of property, natural resources and equipment;

pollution and other environmental damage;

clean-up responsibilities;

regulatory investigation and penalties;

suspension of our operations; and

repairs to resume operations.

POLITICAL OR ECONOMIC INSTABILITY OR UNEXPECTED REGULATORY CHANGE. Certain of our business is conducted in countries, provinces and states more likely to be subject to political and economic instability, or unexpected legislative change, than is usually the case in certain other countries, provinces and states. Our activities could be adversely effected by:

political instability and violence;

war and civil disturbance;

expropriation and nationalization;

change in fiscal regimes;

fluctuations in currency exchange rates;

high rates of inflation;

underdeveloped industrial and economic infrastructure;

changes in the regulatory environment governing mineral properties; and

unenforceability of contractual rights.

THE COMPANY IS SUBJECT TO FOREIGN CURRENCY FLUCTUATIONS. The Company operates in more than one country and fluctuations in and among the various currencies in which the Company operates could have a material effect on the Company’s operations and its financial results.

OUR BUSINESS IS SUBJECT TO COMPLEX LAWS AND REGULATIONS. We are subject to complex laws and regulations, including environmental regulations, which can adversely affect the cost, manner or feasibility of doing business. Development, production, sale and operation of biosphere systems in all countries are subject to extensive laws and regulations, including environmental laws and regulations. We may be required to make large expenditures to comply with environmental and other governmental regulations. Matters subject to regulation include:

location of systems;

the handling of MSW and waste materials;

accounting for and payment of royalties;

bonds for ownership, development and production of electrical power;

distribution agreements for electrical power;

operation of biosphere systems; and

taxation.

Under these laws and regulations, we could be liable for personal injuries, property damage, discharge of hazardous materials, remediation and clean-up costs and other environmental damages. Failure to comply with these laws and regulations also may result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties. Moreover, these laws and regulations could change in ways that substantially increase our costs. Accordingly, any of these liabilities, penalties, suspensions, terminations or regulatory changes could materially adversely affect our financial condition and results of operations enough to possibly force us to cease our business operations.

FACTORS BEYOND OUR CONTROL. The potential profitability of biosphere operations depends upon factors beyond the control of the Company. For instance, world prices and markets for electrical power are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect our financial performance.

WE MAY INADVERTENTLY FAIL TO COMPLY WITH LOCAL LAWS OF OTHER COUNTRIES IN CONNECTION WITH THE NEGOTIATION AND EXECUTION OF CERTAIN AGREEMENTS. As part of our international business, we may negotiate with and enter into contracts with strategic partners, clients, suppliers, employees and other third parties in various countries. We may inadvertently fail to comply with their laws which may result in lawsuits or penalties, which could adversely affect our business or results of operations.

SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE OPERATIONS. Our auditors’ opinion on our May 31, 2009 financial statements includes an explanatory paragraph in respect of there being substantial doubt about our ability to continue as a going concern. As reflected in the accompanying financial statements, the Company incurred net losses of $25,550,053, $18,989,445, and $24,332,185 for the years ended May 31, 2009, 2008, and 2007 respectively and an accumulated deficit of $173,397,609 at May 31, 2009. There are significant uncertainties with regard to the Company’s ability to generate sufficient cash flows from operations or other sources to meet and fund its commitments with regard to existing liabilities and recurring expenses. The Company intends to finance future operations from the proceeds of a subscription agreement for the sale of shares of common stock and an additional financing from the stockholders'. The loans/advances received from stockholders’ are not payable in the next twelve months. Further, interest on loans/advances from stockholders’ has been accrued and no payments have been made to date. Based on the financial position of the Company and its inability to generate cash from operations, the stockholders have agreed to the repayment after the Company begins to generate future cash flows. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

COMPETITION. We may not be able to compete with current and potential waste to energy companies, some of whom have greater financial resources and experience than we do. The waste to energy business is intensely competitive, highly fragmented and subject to rapid change. We may be unable to compete successfully with our existing competitors or with any new competitors. We compete with many companies which have significantly greater personnel, financial, managerial, and technical resources than we do. This competition from other companies with greater resources and reputations may result in our failure to maintain or expand our business.

LOSSES ARE EXPECTED TO CONTINUE. We expect losses to continue in the future because we as of the date of this report no revenue to offset losses. Based upon the fact that we currently do not have any operational projects from which to derive revenue, we expect to incur additional operating losses in next 12 months. The operating losses will occur because there are expenses associated with the acquisition and development of projects. Failure to generate revenues may cause us to go out of business. We will require additional funds to achieve our current business strategy and our inability to obtain additional financing will interfere with our ability to expand our current business operations.

OUR SECURITIES ARE HIGHLY SPECULATIVE. Due to our limited operating history, our securities must be considered highly speculative. We are engaged in the business of commercially exploiting the biosphere process system through Biosphere Development Corp. Biosphere has to date not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon the success of our contemplated biosphere projects, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through loans from existing shareholders, the sale of our equity securities or strategic arrangement with a third party in order to continue our business operations.

WE MAY ISSUE ADDITIONAL SHARES; DILUTIVE EFFECT. There are significant risks relating to our common shares. We may, in the future, issue additional common and preferred shares, which would reduce investors’ percent of ownership and may dilute our share value. We are authorized to issue 1,000,000,000 shares of Common Stock, with a par value of two tenths of one cent ($0.002) each, and 20,000,000 shares of Preferred Stock which shall have a par value of one hundredth of a cent ($0.0001) each and which may be issued in series, The future issuance of our authorized common or preferred shares may result in substantial dilution in the percentage of our shares held by our then existing shareholders. We may value any common or preferred shares issued in the future on an arbitrary basis. The issuance of common or preferred shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common shares.

WE ARE SUBJECT TO THE PENNY STOCK RULES. Our common shares are subject to the “Penny Stock” Rules of the SEC and we have no established market for our securities, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock. The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than USD $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

that a broker or dealer approve a person’s account for transactions in penny stocks; and

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

obtain financial information and investment experience objectives of the person; and

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

sets forth the basis on which the broker or dealer made the suitability determination; and

that the broker or dealer received a signed, written agreement from the investor prior to the transaction

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common shares and cause a decline in the market value of our stock. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

LACK OF INFORMATION ABOUT US. We are a “foreign private issuer”, and you may not have access to the information you could obtain about us if we were not a “foreign private issuer”. We are considered a “foreign private issuer” under the Securities Act of 1933, as amended. As a foreign private issuer we will not have to file quarterly reports with the SEC nor will our directors, officers and 10% stockholders be subject to Section 16(b) of the Exchange Act. As a foreign private issuer we will not be subject to the proxy rules of Section 14 of the Exchange Act. Furthermore, Regulation FD does not apply to non-U.S. companies and will not apply to us. Accordingly, you may not be able to obtain information about us as you could obtain if we were not a “foreign private issuer”.

NO DIVIDENDS. Because we do not intend to pay any cash dividends on our Common shares, our stockholders will not be able to receive a return on their shares unless they sell them. Whereas we retain the right to pay cash dividends we intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common shares in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.

DIFFICULTY IN BRINGING AND ENFORCING ACTIONS. Because all of our assets and all of our officers and directors are located outside the United States, it may be difficult for an investor to enforce within the United States any judgments obtained against us or any of our officers and directors. All of our assets are located outside of the United States and we do not currently maintain a permanent place of business within the United States. In addition, our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult or impossible for an investor to effect service of process or enforce within the United States any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts of the Commonwealth of the Bahamas would recognize or enforce judgments of United States courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. There is even uncertainty as to whether the Bahamian courts would have jurisdiction to hear original actions brought in the Bahamas against us or our directors and officers predicated upon the securities laws of the United States or any state thereof.

CURRENT LEVELS OF MARKET VOLATILITY COULD HAVE ADVERSE IMPACTS. The capital and credit markets have been experiencing volatility and disruption. If the current levels of market disruption and volatility continue or worsen, there can be no assurance that the Company will not experience adverse effects, which may be material. These effects may include, but are not limited to, difficulties in raising additional capital or debt and a smaller pool of investors and funding sources. There is thus no assurance the Company will have access to the equity capital markets to obtain financing when necessary or desirable.

GENERAL DETERIORATION IN ECONOMIC CONDITIONS MAY HAVE ADVERSE IMPACTS. The current global economic environment is challenging and uncertain. Worldwide financial markets have experienced extreme disruption since 2007, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades and declining valuations of investments. These disruptions are likely to have an ongoing adverse effect on the world economy. We are unable to predict how long the economic downturn will last. A continuing economic downturn and financial market disruptions may adversely impact our business. In addition, the risks associated with the industry in which the Company operates may become more acute in periods of a slowing economy or slow growth.

Item 4.

Information on the Company.

Background

Global Environmental Energy Corp.’s (Bahamas) (the “Company” or “Global”) was formed to become a fully integrated energy company whose interests include traditional oil and gas exploration and production, alternative energy sources, environmental infrastructure and electrical micro-power generation through it subsidiaries.

In May 2004 the Board of Global Environmental Energy Corp. (Delaware) (a Delaware Corporation) (formerly Life Energy & Technology Holdings Inc., formerly Health Pak Inc., formerly Morgan Windsor Ltd., originally incorporated on December 28, 1978) approved the formation and incorporation of Global Environmental Energy Corp. (Bahamas). Global Environmental Energy Corp. (Bahamas) is a Bahamian Corporation (No. 134791 B) incorporated on June 24, 2004 under the Bahamian International Business Companies Act, 2000.

In August 2004 Life Energy & Technology Holdings, Inc (Delaware) authorized by board resolution a name change for the Company to Global Environmental Energy Corp. (Delaware) and approved a change of its domicile from Delaware to the Commonwealth of the Bahamas maintaining its principal place of business in New Orleans Louisiana.

On September 1, 2004 Global Environmental Energy Corp. (Delaware) OTCBB trading symbol GEEC, CUSIP number # 379 44, and Global Environmental Energy Corp. (Bahamas) completed a one for one share exchange. Upon the completion of the share exchange Global Environmental Energy Corp. (Delaware) became a wholly owned subsidiary of Global Environmental Energy Corp. (Bahamas). On May 19, 2005 Global Environmental Energy Corp. (Delaware) commenced its reorganization in Federal Bankruptcy Court in New Orleans, Louisiana.

In December 2004 the Board of Global Environmental Energy Corp. (Bahamas) authorized the formation and incorporation of two subsidiary companies, Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas) with offices in New Providence, Commonwealth of the Bahamas.

Biosphere Development Corp. (Bahamas) (“Biosphere”) is a Bahamian Corporation, (No. 134790 B) incorporated on December 17, 2004 under the Bahamian International Business Companies Act, 2000. Biosphere Development Corp. (Bahamas) is an operating subsidiary of Global Environmental Energy Corp. (Bahamas) and is actively pursuing overseas opportunities for the Biosphere Process™ System a unique licensed proprietary technology, EcoTechnology™, that supplies energy through an efficient and environmentally safe process. Biosphere has no assets or operations for the years ended May 31, 2009 and 2008.

Sahara Petroleum Exploration Corp. (Bahamas) is a Bahamian Corporation (No. 134791 B) formed under the Bahamian International Business Companies Act, 2000. Sahara Petroleum Exploration Corp (Bahamas) is a subsidiary for Global Environmental Energy Corp. (Bahamas) and is inactive.

On February 25, 2005, Global Environmental Energy Corp. (Bahamas) received notification from the NASD to begin trading as a foreign corporation. Global Environmental Energy Corp. (Bahamas) was issued with both a new trading symbol GEECF and a CINS number P 477255 10 9 which denotes a foreign company trading on the OTCBB.

On April 28, 2005 Global Environmental Energy Corp. (Bahamas) announced its intention to dividend Global Environmental Energy Corp. (Delaware) to the shareholders of Global Environmental Energy Corp. (Bahamas), with a record date of May 28, 2005. All shares of common stock of Global Environmental Energy Corp. (Delaware) owned by Global Environmental Energy Corp. (Bahamas) were to be distributed as a stock dividend on a pro-rata basis to all of the shareholders of Global Environmental Energy Corp. (Bahamas) as of May 28, 2005. The distribution of the common stock of Global Environmental Energy Corp. (Delaware) was anticipated to be delivered to the shareholders of Global Environmental Energy Corp. (Bahamas) on June 10, 2005 after which date Global Environmental Energy Corp. (Bahamas) owned no shares of stock or equity in Global Environmental Energy Corp. (Delaware). However, on May 19, 2005 Global Environmental Energy Corp. (Delaware), filed a voluntary petition and commenced its reorganization pursuant to section 327(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Federal Rule of Bankruptcy Procedure 2014(a) in the Eastern District of Louisiana number 05-142201, which has been converted to Chapter 7 liquidation.

Subsidiaries

The consolidated financial statements included with this report include the accounts of the Company and its subsidiaries namely, Global Environmental Energy Corp. (Delaware) which is 100% owned by the Company, and Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas), both of which are 85% owned subsidiaries. As of May 31, 2007, Sahara Petroleum Exploration Corp. (Bahamas) is inactive. Global Environmental Energy Corp. (Delaware), a fully owned subsidiary of the Company, has proceeded to file under Chapter 7 of the Bankruptcy Code as described above. Global Environmental Energy Corp. (Delaware) has been consolidated into the financial statements as it has proceeded to liquidate under the Bankruptcy laws. The Delaware Company had no assets as at May 31, 2009 and 2008 and had long-term liabilities and an accumulated net deficit of approx $10.5 million for the years ended May 31, 2009 and 2008. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

On the December 4, 2007 the Company, acquired 97.12% of the shares of Biosphere (Shaoxing) Technology Co. Ltd., a company formed in the Peoples Republic of China. No consideration was paid for the acquisition of the ownership interest. In January 2009 the company granted a Biosphere Technology License number BTLA-200901 to Wister Associated Inc. (“Wister”), under which agreement the Company transferred its entire shareholdings in Biosphere (Shaoxing) Technology Co. Ltd to Wister along with its ownership interests in other companies described below.

On October 22, 2007 Biosphere Development Corp. (Bahamas) entered into an agreement with Freedom Renewable Energy Corp. (“Freedom”) to license a right to the use of Biosphere Processing System Technology for a consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and a stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom.

In January 2009 Biosphere Development Corp. (Bahamas), one of the 85% owned subsidiaries of the Company, granted a Biosphere Technology License number BTLA-200901 to Wister Associated Inc., under which agreement the Company transferred its 97.12% shareholding in Biosphere (Shaoxing) Technology Co. Ltd. (as described above), 31% shareholding in Biosphere Asia Pacific, its 45% shareholding in Hong Kong based Biosphere (HK) Ltd, and its 31% shareholding in International Environmental Energy Corp to Wister.

Sahara Petroleum Exploration Corp. (Bahamas), an 85% owned subsidiary of the Company, has been inactive since May 2007.

The flowchart below represents our ownership interest in the various companies referred to above.

The Business Overview

The Company is currently involved in the commercialization of the Biosphere Process™ System. Prior to fiscal 2007, the Company was also involved in the acquisition and development for sale of oil and gas reserves and other energy related products through Sahara Petroleum Exploration Corp., its majority owned subsidiary. Sahara is currently inactive.

Biosphere Process™ System

General Background

The Company enjoys a licensing agreement with McCormack Consulting, the inventors, developers and owners of the Biosphere Process™ System (Patent Pending) and all rights and title thereto. The Biosphere Process™ System provides for the conversion of waste materials (which includes municipal solid waste, agricultural or forestry surpluses or wastes, industrial or medical waste materials or traditional fossil fuels) in a process that includes, initially, the automatic separation of metals and plastics, the formation of organic compost and the heating of the organic residue left from the separation process to very high temperatures in a separate chamber, which is deprived of oxygen. The heating of the organic waste in this manner (i.e. in an oxygen deprived environment) prevents combustion, smoke and odour, and transforms the waste into steam and other gasses, which then run a turbine to produce electricity. The remaining solid waste then becomes a pulverized powder, which can be sold as a by-product for use in the building industry.

The Biosphere Process™ System heats and converts solid waste in an atmosphere that does not produce smoke or odour and therefore is capable of being placed directly in the centre of a town with no pollution to the atmosphere. The System can also be used specifically for the purpose of producing electricity for local use - ability in great demand in developing countries. Additionally, the Biosphere Process™ System is effective for the elimination of infectious medical and toxic waste.

When the Company’s operating plans are fully implemented, the Biosphere Process™ System is expected to produce revenues from garbage tipping fees, recycling of metals, the sale of building products, papers and plastics, and the sale of electrical power and steam.

The Functioning of the Biosphere Process™ System

The Biosphere Process™ is most easily described in a format where it is operated using Municipal SolidWaste (MSW) as a feedstock - although the Biosphere Process™ System operates equally well as a micro power generation system consuming any waste material, including agricultural or forestry surpluses or wastes, industrial or medical waste materials or traditional fossil fuels.

The Biosphere Process™ System when operated on MSW takes place in five distinct stages:

Stage One: MSW is collected and brought to a centralized Biosphere Process™ facility. Each facility is designed as a “one stop shop” providing for up to 100% recycling of the total tonnage of MSW collected. The Biosphere Process™ facilities are economically viable at as little as 5-8 Tons/hr and can be constructed in closed facilities of as little as 3000 square ft. Each Biosphere Process™ facility is designed to be a stand-alone facility, with internal positive air control ensuring that the facility does not emit any non-permit able emissions to the atmosphere.

Stage Two: The MSW is sorted to provide separation for compost production, plastics and rubber recovery, metals, glass and aggregate recovery, and finally, electrical power generation. Typically operating at a rate of 30 tons/hour, each receiving line separates MSW into two feedstock streams comprising putrescible (organic) and non-putrescible (non-organic) materials.

Putrescible materials usually comprise around 20% by volume are rapidly composted and recycled into high nutrient value soil additives and fertilizers using a proprietary vertical accelerated composter. Non-putrescible materials are further sorted to allow plastics and rubber recovery at around 10% of volume before being shredded in advance of valuable metals recovery. All of the recoverable aluminum and ferrous metals are removed from the waste stream, using rotating trammels equipped with band magnets, and hand picking stations designed to achieve the maximum possible percentage recovery of these materials. Finally glass, aggregates, concrete products and sand are removed using a Biosphere Separator™2 which achieves the following separation percentages; metals, 3.1%, glass 5.2%, aggregates, concrete, dirt and sand 8.0% and finally residual materials suitable for power generation equal to not more than 53.7% by volume of the initial MSW.

Stage Three: In stage three of the process, all other material in the waste stream is forced through a Biosphere Densifier™3, which compacts the MSW into 20g flakes with 15-20% moisture termed Biosphere Flakes™4 at the rate of 30Tons/hour, these flakes drive the Biosphere Process.

Stage Four: The Biosphere Flakes™ are converted into a 1000(degree)C - 1800(degree)C flux using a Biosphere Venturi™5. The process is designed to produce a high value inert pozzolanic material, which is then recycled into concrete products for the building industry, thus ensuring up to 100% recycling of all MSW handled through the Biosphere Process™ completely replacing traditional land filling as a method of waste disposal.

Stage Five: The 1000(degree)C - 1800(degree)C flux produced in stage four is used to power a turbine for micro power generation, a by-product of which is electricity and steam which can be used to power local industry including desalination facilities.

Economic Need for the Biosphere Process™

Every man, woman and child, the population of the developed world, produces up to one-half ton of MSW per annum; the vast majority of which is, at present, simply land filled and allowed to decay. Not only is such a practice outdated, having changed little in hundreds of years, but also it is costly and wasteful of what have for some time been recognized as finite natural resources. The Biosphere Process™ is a new development that allows for up to 100% recycling of the resource that MSW represents.

The Biosphere Process™ in addition to consuming MSW as a feedstock is an “omnivorous” micro power generation system. The Biosphere Process™ will operate and generate electricity using MSW, traditional fossil fuels, agricultural wastes or surpluses, forestry wastes or surpluses, industrial waste streams, cellulose or hemicelluloses biomass waste streams, lignin, or any manner of waste material.

Such energy credits, form the basis of the greenhouse-gas trade, and are the backbone of a developing global industry. This expected trade will provide a further impetus for multinational companies, national governments and member states in both the European Union and elsewhere to champion the commercial use of MSW and waste materials and importantly the remediation of existing landfills, which conversely are fast becoming a natural resource. Not only are landfills a rich source of metals, 8-10% high grade aluminium and ferrous metals, and of silicates, sands and building aggregates, but they also contain significant volumes of combustible fuel material with an exceptionally high calorific content, highly suitable for power generation. The Biosphere Process™ System can also be fuelled by traditional fossil fuels, oil, and natural gas.

Manufacture

The Company and its subsidiaries subcontract all of their manufacturing requirements. Pursuant to Biosphere Technology License Agreements, the Company has also sub-licensed a number of entities to manufacture, sell and operate Biosphere Process™ Systems. These agreements will provide for turnkey manufacturing, installation and maintenance of the Biosphere Process™ Systems.

Marketing Plan

Biosphere Development Corp. (Bahamas) is a Bahamian Corporation established in December of 2004, as an operating subsidiary of the Company for the purpose of pursuing overseas opportunities for the Biosphere Process System. At present, management relies upon agreements with independent sales agents to secure contracts for its Biosphere Process™ Systems.

Licensing Agreements

The Company grants and relies upon its non-exclusive Biosphere Technology License agreements as its potential source of royalty income. On May 20, 2009, the Board of Directors of the Company resolved that in order to better protect the Company’s intellectual property rights, all existing and new Biosphere Technology License agreements be reviewed and renewed or cancelled based upon performance or the lack thereof annually, subject to the terms of the applicable agreement. This annual renewal is intended to take place on or about May 20th of each year. The Company intends to effect any required contract changes in advance of the May 31st financial year end annually, although there can be no assurance that any or all of such licensees will voluntarily agree to any such necessary changes.

The Company currently has non-exclusive biosphere technology licensing agreements with several parties including:

Spectrum Blue Steel Corporation, a Philippines corporation (“Spectrum”). On June 2, 2008, Spectrum was granted a non-exclusive license in the Philippines to market, sell, lease and operate Biosphere Process Systems. In 2009, Spectrum placed an order with the Company for an initial Biosphere System for deployment in the Philippines. In connection therewith, the Company has arranged to have its consulting engineers visit and survey Spectrum’s intended site for this installation. As of the date of this report, Global had still not received funds from Spectrum towards the purchase of that system. The Company exercises no control over Spectrum, its officers or its employees. In the event of continued non-performance under this license by Spectrum, the Company may seek to cancel this agreement in 2010. The Company has already provided Spectrum with notice to this effect.

Freedom Renewable Energy Corp., a Delaware corporation (“Freedom”). On October 22, 2007, Freedom was granted a non-exclusive license in the United States to market, sell, lease and operate Biosphere Process Systems for a partial consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. Global has received a partial deposit from Freedom for its initial Biosphere system intended for deployment in Georgia in the United States. The Company’s Chairman and Chief Executive Officer, Christopher A. McCormack, has visited Freedom’s intended site for this installation in 2009. However, as of the date of this report, the Company has received no further funds from Freedom for the intended manufacture of the Biosphere system. The Company has been advised by Freedom that they are experiencing funding difficulties and allied staff problems. Therefore, there can be no assurance when or if Freedom will pay the balance of the monies due to complete a Biosphere System purchase. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom which makes her a related party. Notwithstanding the foregoing, the Company exercises no control over Freedom, its officers or its employees. In the event of continued non-performance under this license by Freedom, the Company may seek to cancel this agreement in 2010. The Company has already provided Freedom with notice to this effect.

Global NRG, Ltd., a corporation incorporated under the laws of The British Virgin Islands, operating in Australia (“Global NRG”). On October 1, 2007, Global NRG was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in the countries of Australia, New Zealand, the Pacific Islands of Papua Nuigini, Fiji, Noumea, Vanuatu, Western Samoa, Tonga and Cook Islands and Africa, with exceptions of Libya, Angola, Cote D’Ivore, Mauritius, Cape Verte and Algeria. In 2008, Global NRG defaulted on the payment of a deposit to the Company for a Biosphere System. As of May 20, 2009, the Company provided notice to Global NRG that its license has been revoked as at May 20, 2009. The Company exercises no control over Global NRG its officers or its employees.

Wister Associates Inc., a corporation organized under the laws of the Republic of Panama (“Wister”). On January 1, 2009, Wister was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in the People’s Republic of China. Pursuant to the agreement, the Company also transferred its 31% shareholding in Biosphere Asia Pacific, its 45% shareholding in Hong Kong based Biosphere (HK) Ltd, and its 31% shareholding in International Environmental Energy Corp to Wister. The Company is hopeful that Wister will perform under this licence in 2010. The Company exercises no control over Wister, its officers or its employees.

Indisporne Limited, a corporation incorporated under the laws of The British Virgin Islands, operating in Thailand (“Indisporne”). On June 2, 2008, Indisporne was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in Thailand. Indisporne has not yet performed upon its agreement with the Company. The Company exercises no control over Indisporne, its officers or its employees. In the event of continued non-performance under this license by Indisporne, the Company may seek to cancel this agreement in 2010. The Company has already provided Indisporne with notice to this effect.

SC Waste to Energy SRL, a Romanian Corporation (“SC Waste”). On June 5, 2009, SC Waste was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in Romania. SC Waste has not yet performed upon its agreement with the Company but the Company is hopeful that SC Waste will perform under this licence in 2010. The Company exercises no control over SC Waste, its officers or its employees.

Jet Black Kenya Limited, a Kenyan Corporation (“Jet Black”). On December 23, 2008, Jet Black was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in Africa. Jet Black has not yet performed upon its agreement with the Company. The Company exercises no control over Jet Black, its officers or its employees. In the event of continued non-performance under this license by Jet Black, the Company may seek to cancel this agreement in 2010. The Company has already provided Jet Black with notice to this effect.

North West Lawyer Agency, a Russian corporation (“Russian North West”). On August 17, 2007, Russian North West was granted a non-exclusive license to market, sell, lease and operate Biosphere Process Systems in Russia. Russian North West has not yet performed upon its agreement with the Company. The Company exercises no control over Russian North West, its officers or its employees. In the event of continued non-performance under this license by Russian North West, the Company may seek to cancel this agreement in 2010. The Company has already provided Russian North West with notice to this effect.

Oil and Gas Development

Sahara Petroleum Exploration Corp. (Bahamas) is a Bahamian Corporation established on December 17, 2004, as an operating subsidiary of the Company for the purpose of exploring for and developing oil projects, primarily in Africa. Sahara had been in negotiation for to complete the acquisition of two oil exploration blocks in North Africa. Sahara has been inactive since May 31, 2007. As a result, the Company is no longer involved in oil and gas development.

Status of Recent Publicly Announced Developments

The following public announcements have been made by the Company and by third parties since the beginning of the fiscal year ended May 31, 2009 relating to the Company and its products:

On June 20, 2008, the Company announced that its Philippine licensee, Spectrum Blue Steel Corporation (“Spectrum”) is planning to deploy 1,500 Biosphere Systems under its license. The Company has had engineers visit Spectrum’s intended site for the initial Biosphere System in the Philippines. To the Company’s knowledge, Spectrum has made progress in developing its initial site, acquiring ancillary equipment and embarking upon an extensive program of civil engineering. In addition, to the Company’s knowledge, Spectrum has been applying for and pursuing the required local and national permits to allow Spectrum to operate Biosphere Systems in the Philippines. However, as of the date of this report, Spectrum has not completed its order for Biosphere Systems for the Philippines, and no assurance can made when or if Spectrum will complete its order.

On July 30, 2008, Spectrum announced a strategic partnership with Al Manhal International Group of Abu Dhabi to market the Company’s Biosphere Systems in Gulf, Arab, other Asian and European countries. The Company has not yet visited Al Manhal and no orders to purchase Biospheres have been received from Al Manhal to date. The Company is unable to confirm the truth or accuracy of the statements made in this announcement. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On September 26, 2008, the Company acknowledged Dr. Albert Reynolds African Initiative is to deliver 1,120 Biosphere Systems to Africa. The Company reported that Dr. Reynolds confirmed the funding of USD$90,000,000 from private donations to the Initiative which has enabled funding of the first 10 to 1,120 Biospheres. The Company stated that these systems are currently being manufactured for delivery to South Africa, Botswana and the Cote d’Ivoire. This press release was made by the Company to resolve confusion arising from Dr. Reynolds’ Press Release of September 25, 2008. That press release was made by Dr. Reynolds without the authorization or approval by the Company prior to its dissemination. To the Company’s knowledge, manufacturing to provide Biosphere Process Systems for the Reynolds Initiative has been delayed due primarily to the ongoing global financial crisis. However, the Company understands that prior to the contract being delayed a significant amount of work was carried out, including the sourcing of large numbers of commercially available subcomponents and the incorporation of specific design modifications to the standard Biosphere System design for its intended use in sub-Saharan Africa. To provide for such a large order the Company intends to use both its current Chinese subcontract manufacturers and has in addition made plans to have several other companies manufacture subcomponents. To this end the Company contracted Thailand based World Green Energy Company Limited in July 2009 under a manufacturing alliance agreement, thereby significantly expanding the Company’s ability to manufacture Biosphere Process Systems by subcontract. The Company has been advised by Dr. Reynolds that notwithstanding the global financial crisis, the private funding for the initial 10 systems is in place and will be received by the Company in early 2010. Dr Reynolds has advised that additional funding is intended to be raised from philanthropic sources to allow the complete 1,120 systems to be manufactured and deployed in Africa. However, the Company cannot confirm the truth or accuracy of the foregoing and no assurance can be made that any or all of such intended systems will be manufactured and deployed in Africa as contemplated. As of the date of this report, no further funding has been received.

In March 23, 2009, the Company acknowledged that it had received deposits from American Waste to Energy Corp. (“AW2E”) for Biosphere Systems to be deployed in the United States. The Company announced that Freedom Renewable Energy and AW2E are to deploy the first of an initial 73 Biosphere Systems at Toombs County, Georgia. In conjunction therewith, on March 24, 2009, American Waste to Energy Corp. (“AW2E”) also announced that it will be deploying the first Biosphere Gasification System in Georgia at such project site in Toombs County. AW2E is a subsidiary of Freedom Renewable Energy Corp. with full marketing and deployment rights to the Biosphere Gasification System throughout the United States. The Company received deposits from AW2E in March 2009 and the Chairman of the Company visited Toombs County Georgia to assess the intended site for the initial Biosphere Process System. Additional payments from AW2E were due in July 2009. These payments were not received. The Company has been made aware by Freedom Renewable Energy of several sources of available funding to allow Freedom complete its Biosphere purchase. The Chairman has met with several of the parties interested in funding Freedom’s planned developments. As of the date of this report, however, no additional payments have been received by the Company.

On April 22, 2009, Spectrum announced the establishment of a Biosphere Pilot facility in the Philippines which is set to be installed within a one hectare portion of the existing landfill in the City of San Fernando, Pampanga. The Company has had consulting engineers visit Spectrum in the Philippines and the intended installation site. The Company has also assisted Spectrum in the planning, design and specification of civil works needed at the initial intended installation site. However, as of the date of this report, Spectrum has not completed its order for Biosphere Systems for the Philippines. The Company did not authorize or approve of this announcement prior to its dissemination by Spectrum nor did it receive a copy prior to its release.

On July 2, 2009, Spectrum announced during the groundbreaking of the Pilot Biosphere Project in Pampanga that three more sites are ready for the installation and deployment of the Biosphere Process and Technology in the Philippines. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination by Spectrum nor did it receive a copy prior to its release. As of the date of this report, Spectrum has not completed its order for Biosphere Systems for the Philippines.

On September 24, 2009, Spectrum announced among other things that it had signed contracts with the City of San Fernando in Pampanga, Philippines for Biosphere machines and by September 30, 2009, it will be signing another joint venture agreement with Joesfino M. Angeles, the mayor of Santa Rosa, Nueva Ecija in central Philippines. The Company did not authorize or approve of the announcement prior to its dissemination by Spectrum nor did it receive a copy prior to its release. Although the Company is unable to confirm the truth or accuracy of the statements made in the announcement, the Company has seen copies of the contracts referred to in the release. However, as of the date of this report, Spectrum has not completed its order for Biosphere Systems for the Philippines.

On September 30, 2009, Spectrum announced that it had signed a joint venture agreement to develop, finance, design and engineer the construction and operation and maintenance of the new Biosphere gasification facility in the city of Santa Rosa, Nueve Ecija, Philippines. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On October 19, 2009, Spectrum announced that the construction for the San Fernando access road from the Mega Dike to the Project Site as well as perimeter fencing is now ready to start. Spectrum announced that the contractor who has been awarded the construction is Saint J's builders, who is a major construction company located in San Augustin city of San Fernando. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On October 28, 2009, Spectrum announced that it has defined itself by a distinct focus on resource efficiency and sustainability, rising and unstable energy prices, scarcity of resources driven by population growth, affluence and climate change. Spectrum stated that its ability to facilitate and deploy the Biosphere system is truly a compelling investment thesis that has both young and old listening. Spectrum stated that the Biosphere system enables significant environmental benefits at a scale appropriate to the urgency of the need for green solutions to clean and save planet earth by turning waste into energy. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On November 16, 2009, Spectrum announced plans to open their new office on the corner of 4(th) and 27(th) street in the global city of Fort Bonifacio Philippines. With the arrival of this new office space, Spectrum Blue Steel will have many new green jobs available for Filipino citizens. In January 2010 Spectrum will start a sizeable hiring campaign for new green energy jobs. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On November 20, 2009, Spectrum announced that True Energy Group and NT Energy are set to meet the Government of Argentina with the CEO of Global Environmental Energy Corp. True Green Energy Group and NT Energy who are promoters of world power and green energy solutions are partners with Spectrum Blue Steel who is the license holder of the Biosphere MKV system. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release. The Company has not yet visited True Energy Group, NT Energy or their clients in Argentina. The Company has been invited to visit Argentina to present the Biosphere Technology to government officials, but has not yet accepted the invitation. None of these parties have placed orders to purchase Biosphere Systems.

On November 23, 2009, Spectrum and TGEG announced their go green campaign for 2010. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination nor did it receive a copy prior to its release.

On December 2, 2009, Spectrum announced that it is emerging as one of the fastest growing green energy companies on the planet. Through the efforts of True Green Energy Group and True Green Planet's President and Recycling Specialist Leroy Johnston, who has been in the recycling business for over 25 years, stated that Spectrum Blue Steel is light years ahead of everyone and is setting the stage for spectacular earnings because of the bi products recovered by using the Biosphere MKV. The Company is unable to confirm the truth or accuracy of the statements made in the announcement. The Company did not authorize or approve of the announcement prior to its dissemination by Spectrum nor did it receive a copy prior to its release.

On December 4, 2009, Spectrum announced that True Green Energy Group, through Spectrum Blue Steel, and the Biosphere MKV power plant have been cultivating the recovery of garbage and in landfills on a global scale. The Biosphere process of gasification harnesses the combustibility of solid wastes to create a heat source that produces an extremely hot steam that will then generate green electricity. Spectrum Blue Steel reported that the President of True Green Energy Group, Mr. John Lamb, along with the founder of Spectrum Blue Steel Ronald Flynn, announced Spectrum Blue Steel's newest partner Mr. Eugene B Jones, who is the Executive Director for Southern Waste Information exchange, Inc. (SWIX), which is a non-profit clearinghouse and repository for businesses and government agencies in the USA. The Company is unable to confirm the truth or accuracy of the statements made in the announcement by Spectrum. The Company did not authorize or approve of the announcement prior to its dissemination by Spectrum nor did it receive a copy prior to its release.

Facilities

Each of the Company, Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas) maintains its address in New Providence in the Commonwealth of the Bahamas.

Competition

The Company is currently in competition with local municipalities and private corporations engaged in refuse and waste removal and processing, and with multinational oil and gas companies. Many of these competitors have significantly greater financial resources and established market presence. Many municipalities having to deal with waste may not wish to invest in the costly production of the Biosphere Process™ System or other methods of waste removal due to limited budgets or existing commitments to alternative waste removal methods. Commercially viable alternatives to the Biosphere Process™ system include traditional landfill, large scale recycling and traditional incineration.

Patents and Trademarks

The Company has formulated patent applications and has the trademark protection for the Biosphere Process™ Systems and certain other of its developed technologies. Patent protection for the Biosphere Process System is pending. The Company has as of the date of this filing still to reach a final agreement with McCormack Consulting, the inventor, developer and owner of the technology to acquire the technology rather than having just the right to use the technology. Currently, the Company relies primarily upon trade secrets and proprietary techniques to attain and preserve any commercial advantage. The Company has obtained trademark protection for several of its proprietary trade names none of which are filed or are required to be filed at this time. The Company intends to have a third party negotiate on the Company’s behalf a fair purchase agreement for the technology from McCormack Consulting.

Supplies

The Company at present purchases from independent subcontractors products that are built to licensed specifications and designs. Management does not believe that there is or will be in the near future a significant shortage or inability to obtain adequate supplies of materials needed to fulfill lease obligations.

Employees

At present the Company has three executive officers. As the Company implements the planned expansion of its operation, it will require additional employees both skilled and unskilled. The Company believes that the personnel it will require are readily available at reasonable salary rates. However no assurance can be given that it will be able to attract the type and quantity of employees the operation will require. Furthermore even if such personnel are available, no assurance can be given that they can be hired on terms favorable to the Company.

Government Regulation

In addition to normal employment and company regulation as applied by any government to companies operating in their jurisdiction, the products marketed by the Company are subject to regulation and permitting by for example the China Environmental Protection Industry Association in China, the Environmental Protection Agency and European BATNEEC guidelines in the European Union, the Environmental Protection Agency in the United States of America, and their equivalent agencies in every other jurisdiction where the Company markets its products. The Company expects that any products distributed by the Company will continue to be subject to pervasive and continuing regulation by the Environmental Protection Agency, or its equivalent governmental organization on a country by country basis.

Insurance

At the present time, there are no product liability claims against the Company. The MSW recycling business, biosphere manufacturing and power generation, are all businesses that involve numerous uncertainties and operating risks that can prevent us from realizing profits and can cause substantial losses, such as but not limited to fires, explosions, natural disasters, environmental hazards, injury or loss of life. Because the Company uses subcontractors to manufacture, install, commission, service and support all of its products, the Company relies on its subcontractors to obtain such insurance in order to protect the Company and its clients against all risks. No assurance can be made that any such insurance will in fact be obtained and maintained by such subcontractors, or if so, that any such insurance will provide the Company adequate protection from the risks associated with its business.

Item 4A. Unresolved Staff Comments.

Not applicable.

Item 5. Operating and Financial Review and Prospects.

Background

The consolidated financial statements included with this report include the accounts of the Company and its subsidiaries namely, Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas), which are majority owned subsidiaries.

Global Environmental Energy Corp. (Delaware) is a fully owned subsidiary of the Company and as described above has proceeded to file under Chapter 7 of the Bankruptcy Code. Global Environmental Energy Corp. (Delaware) has been consolidated into the financial statements as it has proceeded to liquidate under the Bankruptcy laws. The Delaware Company had no assets as at May 31, 2009 and 2008 and had long-term liabilities and an accumulated net deficit of approx $10.5 million for the years ended May 31, 2009 and 2008. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

On the December 4, 2007 the Company, acquired 97.12% of the shares of Biosphere (Shaoxing) Technology Co. Ltd., a company formed in the Peoples Republic of China. No consideration was paid for the acquisition of the ownership interest. In January 2009 the Company granted a Biosphere Technology License number BTLA-200901 to Wister Associated Inc., under which agreement the Company transferred its entire shareholdings in Biosphere (Shaoxing) Technology Co. Ltd to Wister along with its ownership interests in other companies described below.

On October 22, 2007 Biosphere Development Corp. (Bahamas) entered into an agreement with Freedom Renewable Energy Corp.. (“Freedom”) to license a right to the use of Biosphere Processing System Technology for a consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom which makes her a related party.

Biosphere Development Corp. is engaged in the commercialization of the Biosphere Process™ System (as described below). Unless the context otherwise requires, the terms “we,” “us” or “our” refer to Global and its consolidated subsidiaries.

The Biosphere Process™ System is a unique proprietary technology to which the Company holds a licence and with which the Company promotes the use of sustainable and renewable energy sources. The Company through Biosphere Development Corp. subcontracts the manufacture of the Biosphere Process™ System to third parties.

The Biosphere Process™ System provides for the conversion of waste materials (which includes municipal solid waste, coal tailings, coal mining wastes, agricultural or forestry surpluses or wastes, industrial waste materials or traditional fossil fuels) in a process that includes, initially, the automatic separation of metals and plastics, the formation of organic compost and the heating of the organic residue left from the separation process to very high temperatures in a separate chamber, which is deprived of oxygen. The heating of the organic waste in this manner (i.e. in an oxygen deprived environment) prevents combustion, smoke and odor, and transforms the waste into steam and other gasses, which then run a turbine to produce electricity. The remaining solid waste then becomes a pulverized powder, which can be sold as a by-product for use in the building industry.

Critical Accounting Policies

Our discussion and analysis of the Company’s financial condition and results of operations are based upon our consolidated financial statements which have been prepared in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our significant accounting policies are described in Note 1 to the consolidated financial statements included elsewhere herein. The application of our critical accounting policies is particularly important to the portrayal of our financial position and results of operations. These critical accounting policies require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We believe the following critical accounting policies reflect the more significant judgments and estimates used in the preparation of the consolidated financial statements.

Revenue and Cost Recognition - The Company recognizes sale revenues upon delivery of the Biosphere Process ™ System to the buyer. Cost of sales includes the costs to manufacture and deliver the system to the purchaser and is recognized upon the complete manufacture and delivery of the system to the buyer. Since each system is intended to be delivered to the clients with different requirements, manufacturing cost accordingly varies. However, in order to make the profit from the sales of systems manufactured on subcontract, the Company intends to make an annual royalty payment of at least 12.5% of the revenue of the system as provided for in license agreements.

Cash and Cash Equivalent - For the purpose of computing the changes in cash flows for the fiscal years, cash equivalents include cash and highly liquid short-term investments with maturities of three months or less.

Property and Equipment - Property and equipment are stated at cost net of accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful life of the asset which approximates three years. Expenditures for major repairs that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred.

Long Lived Assets - The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. This statement establishes financial accounting and reporting standards for the impairment of long-lived assets and certain intangibles related to those assets to be held and used, and for long-lived assets and certain intangibles to be disposed of. SFAS No. 144 requires, among other things, that the Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If this review indicates that the long-lived asset will not be recoverable, as determined based on the estimated undiscounted cash flows of the Company over the remaining amortization period, the carrying amount of the asset is reduced by the estimated shortfall of cash flows. The Company believes that none of the Company's long-lived assets were impaired.

Income Taxes - The Company accounts for income taxes in accordance with the Statement of Financial Accounting Standards No. 109 (SFAS No. 109), Accounting for Income Taxes. SFAS No. 109 requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax basis of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities. The Company is incorporated under the laws in Bahamas, which impose no corporate income tax. Therefore, the Company has not recognized any assets or liabilities in accordance with the provisions of SFAS No 109.

Principals of Consolidation - The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries namely, Global Environmental Energy Corp (Delaware),Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas), which are majority owned subsidiaries. During the year the Company also acquired a 15% ownership interest in Freedom Renewable Energy Corp. (“Freedom). Since Freedom is a related party, the Company has accounted for the license sold to Freedom and the 15% minority interest in Freedom at Freedom’s historical cost which was zero. Upon consolidation, all inter-company accounts and transactions are eliminated.

Reclassification - Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Accounting for investment in subsidiaries - The Company has one subsidiary. Global Environmental Energy Corp. (Delaware) that is a fully owned and as explained above has proceeded to file under Chapter 7 of the Bankruptcy Code. Global Environmental Energy Corp. (Delaware) has been consolidated because the liabilities have not been forgiven or discharged by the bankruptcy court. The Company also has a controlling interest of 85% in Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas). Both these entities have been consolidated in accordance with generally accepted accounting principles in the United States of America. These companies have no assets, liabilities or operations.

The Company acquired non controlling interests in these entities that purchase the Biosphere machine. Sahara Petroleum Exploration Corp. (Bahamas), an 85% owned subsidiary of the Company, has been inactive since May 2007.

Stock-based compensation - Effective May 31, 2006, the grants under the Plan are accounted for in accordance with the recognition and measurement provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised 2004), Share-Based Payment (“SFAS No. 123(R)”), which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and related interpretations. SFAS No. 123(R) requires compensation costs related to share-based payment transactions, including employee stock options, to be recognized in the financial statements.

Prior to May 31, 2006, the Company accounted for similar transactions in accordance with APB No. 25 which employed the intrinsic value method of measuring compensation cost. Accordingly, compensation expense was not recognized for fixed stock options, if the exercise price of the option equaled or exceeded the fair value of the underlying stock at the grant date.

In adopting SFAS No. 123(R), the Company applied the modified prospective approach to transition. Under the modified prospective approach, the provisions of SFAS No. 123(R) are to be applied to new awards and to awards modified, repurchased, or cancelled after the required effective date of December 15, 2005. Additionally, compensation cost for the portion of awards for which the requisite service has not been rendered, that are outstanding as of the required effective date, shall be recognized as the requisite service is rendered on or after the required effective date. The compensation cost for that portion of awards shall be based on the grant date fair value of those awards as calculated for either recognition or pro forma disclosures under SFAS No. 123(R).

Recent Accounting Pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, “Noncontrolling interest in Consolidated Financial Statements”. SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.

On December 4, 2007, the FASB issued SFAS No.141R, “Business Combinations”. SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We have not yet determined the impact of the adoption of SFAS No. 141R on our consolidated financial statements and footnote disclosures.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of adopting SFAS No. 161 on its consolidated financial statements.

In April 2008, the FASB issued Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP FAS 142-3”) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, “Goodwill and Other Intangible Assets” (“FAS No. 142”). FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In June 2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In July 2009, the Financial Accounting Standards Board adopted The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, (the Codification). The Codification is the single source of authoritative U.S. generally accepted accounting principles. The Codification does not change generally accepted accounting principles, but is intended to make it easier to find and research issues and will change the way GAAP is referenced. The Codification is effective for interim and annual periods ending after September 15, 2009. As the Codification is not effective for the Company’s financial statements, references made in this document relate to the standards that were effective prior to the Codification. The Codification will be effective for the Company’s fiscal year ended May 31, 2010 and its adoption is not expected to have a material affect on the financial statements of the Company.

Results of Operations

During the years ended May 31, 2009, 2008 and 2007, we had no revenues.

Total general and administrative expenses were $23,674,922 for the year ended May 31, 2009, compared to $17,549,385 and $23,159,781for the years ended May 31, 2008 and May 31, 2007, respectively. Such increase in general and administrative expenses for fiscal 2009 compared to fiscal 2008 was primarily due to an increase in consulting fees. Such decrease in general and administrative expenses for fiscal 2008 compared to fiscal 2007 was primarily due to a decrease in consulting fees. As the Company continues to issue shares and options for services rendered to various consultants/employees, the cost recognized for these services under FAS 123(R), ‘Share-Based Payments’', decreased by approx $0.5 million for shares issued to consultants and increased approx $0.8 million for options issued.

Our net loss from continuing operations was $23,674,922 for the year ended May 31, 2009 $17,549,385,for the year ended May 31, 2008 and $23,159,781 for the year ended May 31, 2007.

Interest expense was $1,875,131, $1,440,060, and $1,172,404 for the years ended May 31, 2009, 2008 and 2007, respectively. The consistent trend of increase in interest expense is on account of accumulation of advances/loans from stockholders’. The stockholders have agreed to receive interest and repayment of the advance after the Company begins to generate cash from operations.

The Company incurred a net loss of $25,550,053, $18,989,445, and $24,332,185 for years ended 2009, 2008 and 2007, respectively. On a per share basis, fully diluted, the Company experienced loss per share of $0.20, $0.16 and $0.31 for fiscal years 2009, 2008 and 2007, respectively.

Liquidity and Capital Resources

At May 31, 2009, the Company had working capital deficit of $13,729,550 as compared to a working capital deficit of $25,526,264 at May 31, 2008. Total assets were $112,160 for the fiscal year ended May 31, 2009 and $2,500 for the fiscal year ended May 31, 2008 . Total long-term liabilities were $94,003,445 and $60,412,935 at May 31, 2009 and 2008, respectively. Stockholders’ equity increased to a deficit of $107,730,495 from at May 31, 2009 from $85,936,699 at May 31, 2008.

Cash provided (used) by operating activities was $100,434, $0 and $(141) for the years ended May 31, 2009, 2008 and 2007, respectively. The cash used by operations is lower than the net loss from operations on account of the various non-cash transactions relating to issue of shares/options to both consultants/employees and stockholder’s payment for the Company’s expenses. Further, the Company has accrued salary/benefits payable to officers/employees as most of these payments will be made when the Company generates sufficient cash from operations. The cash provided by operations is due to the deposit received from the Company's affiliate.

There was no cash used by investing activities for each of the fiscal years reported.

The cash provided (used) by financing activities for each of the years were $(368), $0 and $141 relating primarily to bank overdraft.

We recognize that there are significant uncertainties with regard to our ability to generate sufficient cash flows from operations or other sources to meet and fund our commitments with regard to existing liabilities and recurring expenses. We intend to finance future operations from the proceeds of subscription agreements for the sale of shares of common stock and additional financing from the stockholders. No assurance can be given that we will be able to make such arrangements on terms acceptable to the Company or at all. The loans/advances received from stockholders are not payable in the next twelve months. Further, interest on loans/advances from stockholders has been accrued and no payments have been made to date. Based on the financial position of the Company and its inability to generate cash from operations, the stockholders have agreed to the repayment after the Company begins to generate future cash flows. These factors, along with the uncertainty expressed in Note 9 to the consolidated financial statements, raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Inflation and Other Considerations

During the past few years, inflation in the United States and most parts of the world has been relatively stable which is expected to have a beneficial effect upon the Company’s operations. In light of the strong perceived demand for the Biosphere system, particularly in developing countries, management believes that the terms it offers for the sale or lease of these systems have been competitively priced in relation to alternative products. Economic analyses indicate that low inflation and relatively stable economic conditions are expected to continue for the foreseeable future. However, should the world economy again experience double digit inflation rates, as was the case in the past, the impact could adversely affect the Company’s ability to effectively compete in its overseas markets. In particular, adverse economic conditions in the world will typically have the most severe impact upon developing countries that, at the present time, constitute the Company’s primary target market. Further, technological changes may also impact the competitiveness of the Company’s pricing for its systems and the imposition of regulatory controls may increase the cost of manufacturing or operating the Biosphere systems in the future.

Reorganization under the Bankruptcy Code

On April 28, 2005 the Company announced its intention to dividend Global Environmental Energy Corp. (Delaware) to the shareholders of the Company, with a record date of May 28, 2005. All shares of common stock of Global Environmental Energy Corp. (Delaware) were to be distributed as a stock dividend on a pro-rata basis to all of the shareholders of the Company as of May 28, 2005. The distribution of the common stock of Global Environmental Energy Corp. (Delaware) was anticipated to be delivered to the shareholders of the Company on June 10, 2005 after which date the Company would own no shares of stock or equity in Global Environmental Energy Corp. (Delaware).

On May 19, 2005 Global Environmental Energy Corp. (Delaware) filed a voluntary petition and commenced its reorganization pursuant to section 327(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Federal Rule of Bankruptcy Procedure 2014(a) in the Eastern District of Louisiana number 05-142201. On June 5, 2007, the Chapter 11 bankruptcy has been converted to Chapter 7 liquidation.

As explained above, Global Environmental Energy Corp. (Delaware) is consolidated into the financial statements as it has proceeded to liquidate under the Bankruptcy laws. Such company had no assets as at May 31, 2008 and 2007 and had liabilities and an accumulated net deficit of approx $10.5 million for the years ended May 31, 2008 and 2007. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

Establishment of Reserves

The extended delays in the delivery of systems to US clients, compounded by uncertainties arising from delays in the Chapter 11 reorganization process and the ongoing failure of US clients to meet contractual requirements have prompted the Company to evaluate the recoverability of the $27,450,000 deposit and consequently to establish a 100% reserve against amount. In the possible eventuality that US clients continue to fail to meet contractual requirements, the Company has as of the date of this report asked its manufacturing vendor to assess the remanufacture of the 5 US specified systems to meet Chinese client standards, thereby allowing for the potential sale of the 5 systems to Biosphere Asia Pacific’s Chinese clients.

The Company received $7,000,000 in fiscal 2004 towards the balance of $14,400,000 receivable on its Kuwait contract. The Company has received no payment on the receivable in 2005 or 2006 as delivery was suspended due to the increasing political instability in the Lebanon. The Company has established a 100% valuation reserve for the receivable of $7,400,000.

During the year ended May 31, 2005 the Company issued 13,125,000 shares of common stock for a 30% stake in International Environmental Energy Corp. The shares were valued at $0.80 per share for a total investment of $10,500,000. Due to the inherent uncertainties with start up entities the company has decided to create a 100% reserve against this investment.

Concentration of Credit Risk

In May 2003, the Kuwaiti lease was assigned to the Company’s manufacturing vendor. As part of the transaction, the vendor agreed to pay the Company $14,400,000. The receipt of this money is contingent upon the delivery of the 48 machines due on the original sales lease and the payment by the buyer of the machines on the 50 machine purchase on the lease in fiscal 2002. The balance of the receivable at May 31, 2004 is $7,750,000.

This exposes the Company to significant credit risk as a result of the possible non-performance by both the manufacturing vendors to deliver the Biosphere Process Systems due and the payment by the buyer on the machines purchased. In the event the receivable resulting from the transaction becomes uncollectible, the financial position of the Company would be materially adversely affected.

The chairman of the Company support’s the Company’s business activities in a significantly material way. A withdrawal of this support would have a material adverse affect on the financial position of the Company.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

Item 6. Directors, Senior Management and Employees.

Identification of Directors and Executive Officers

The following identification of officers and directors, including biographies, sets forth the officers and directors as of May 31, 2009:

Name	Age	Position
Dr. Christopher A. McCormack	46	Chairman of the Board Chief Executive Officer and Director
Mr. Salim Ghafari	47	Vice President, Chief Financial Officer, and Director
Ms. Sharon Trottman	54	Company Secretary and Director

Profiles of the directors and officers of the Company are set forth below. All directors hold office until the next annual shareholders meeting or until their death, resignation, retirement, removal, disqualification or until their successors have been elected and qualified. Vacancies in the board may be filled by majority vote of the remaining directors. Officers of the Company serve after appointment by the President at the will of the board of directors, subject to the terms of employment agreements as discussed below.

Election to the board of directors is for a period of one year and elections are ordinarily held at the Company’s annual meeting of shareholders. The board of directors has regular meetings once a year, after the annual meeting of shareholders, for the purpose of electing the officers of the Company.

Profiles of Officers and Directors

Dr. Christopher A. McCormack, Chairman Chief Executive Officer and Director.

Dr. Christopher A. McCormack was in addition to his position with the Company, Chris was the Chief Executive Officer of Maxol & CB Biofuels and the inventor of the DiGenter Process™9 for BioEthanol™10 production from biomass. Dr. McCormack also serves as a strategic management consultant and Managing Director of McCormack Consultants. Dr. McCormack was educated at University College, Dublin, and the National University of Ireland, (B.Sc., 1st Class Hons, 1995, Ph.D., 1997). Dr McCormack is a postdoctoral alumnus of the University of California at Berkeley and holds an N.I.H.C. awarded by the National Institutes of Health, Bethesda MD., and is both a distinguished Fulbright Scholar and a Fogarty Fellow, with elected memberships to both the Physiological Society and the Association for Research in Vision and Ophthalmology. In addition, Dr McCormack has previously been commended by the Nuffield Foundation and the American Physiological Society and is the author of over 100 technical and scientific contributions, including several patents for the production of ethanol as a green fuel alternative from biomass, surpluses and other waste materials. Dr McCormack’s business experience stems from a firm commitment to the environment and an overriding conviction to socially responsible company development and management. The DiGenter™ process, recognized by the Ford Motor Company as being of global significance (Dublin September 1999), was developed from his interests in extending and preserving finite fossil fuel resources while in addition re-mediating harmful environmental emissions and assisting fossil fuel preservation. A member of the International Road Transport Union since 1996, Dr McCormack served as the first ever Director General of the Irish Road Haulage Association, and was credited with revolutionizing the Irish transport industries public image in Europe. He has previously been involved in and advised a number of environmentally friendly companies promoting alternatives both to landfill and older unsustainable polluting technologies. In addition he has previously advised and provided strategic planning to a number of publicly quoted international oil companies. Dr McCormack is the inventor of and has spearheaded the development of the Biosphere Process™ while simultaneously leading the due diligence efforts examining potential competing technologies whilst the Biosphere Process™ was under development.

Mr. Salim Ghafari, Vice President For Middle Eastern Operations, Chief Financial Officer and Director.

Mr. Ghafari is a specialist in oil and gas operations, having served as an independent consultant to numerous oil and gas companies principally in the Middle East and North Africa from 1986 through 1993. From 1993 to 1999 he was employed by McCormack Consulting as a specialist in oil and gas exploration. Mr. Ghafari received a Masters in Business Administration from the National University of Ireland.

Ms. Sharon Trotman, Company Secretary and Director.

Ms. Sharon Trotman has been Secretary and Director of the Company since October 10, 2008. Since 2001, she had been employed by Kessler Management Services in Nassau, The Bahamas. She is a Bahamian citizen.

There are no other directors of the Company other than those individuals named above, No family relationship exists between any of the directors or senior management. There are no arrangements or understandings with major stockholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a director or member of senior management.

Executive Compensation

The following table sets forth information relating to compensation to officers and directors as of May 31, 2009, the end of the Company’s most recent fiscal year, as well as indicating the compensation for fiscal 2008 and 2007 (no cash payments have been made to date during such periods and all cash compensation has been accrued):

						Stock Based		Other Annual
	Year	Salary ($)		Bonus ($)		Compensation(1) ($)		Compensation ($)		Total

Dr.Christopher McCormack	2009		633,195		442,444		1,239,634		1,135,587		3,450,860
Chairman of the Board & CEO	2008		603,043		421,376		624,600		1,081,511		2,730,530
	2007		553,815		386,978		704,968		993,218		2,638,979

Tom Kessler (2)	2009		-		-		-		-		-
Former Company Secretary & Director	2008		-		-		-		-		-
	2007		147,684		-		-		-		147,684

Salim Ghafari	2009		168,852		-		309,366		48,243		526,461
Vice President, CFO and Director	2008		160,811		-		208,200		45,946		414,957
	2007		147,684		-		234,990		42,189		424,863

Ivy Grant (3)	2009		-		-		-		-		-
Former Company Secretary & Director	2008		138,915		-		-		-		138,915
	2007		57,881		-		-		-		57,881

Sharon Trotman (4)	2009		-		-		-		-		-
Company Secretary & Director

(1)	Represents the dollar amount recognized for financial reporting purposes of stock based compensation awarded.

(2)	Mr. Kessler resigned as an officer and director of the Company as of December 28, 2006.

(3)	Ms. Grant was an officer and director of the Company from December 28, 2006 until her death on October 10, 2008.

(4)	Ms. Trotman has been Company Secretary and director since October 10, 2008.

Employment Agreements

The Company has ten year compensation agreements with its officers beginning February 25, 2005 replacing contracts entered into in November 2000. The agreements call for a base compensation in year one that increases 5% per year in years two through ten. Certain of the employees will receive a base monthly unaccountable expense allowance that also increases 5% per year in years two through ten. Payments are due monthly in cash or common stock of the company or may be accrued by the company by mutual agreement until the Company makes a profit. Additionally certain of the employees were awarded share options as part of their original contracts with exercise prices ranging between of $0.13 and $0.30 per share for certain employees. These options with exercise prices ranging between of $0.13 and $0.30 per share were adopted and incorporated into the 2005 contracts. Annual payments are also due for bonuses and pension which increase 5% per annum. The contracts also call for the payment of medical, dental, health and life insurance at prevailing rates. As at May 31, 2009 and 2008, salaries and benefit payable were $69,717,957 and $54,011,666, respectively.

Remaining commitments under the employment contracts are as follows:

			Unaccountable
Year ending May 31,	Salaries		Expense		Bonus		Pension		Total

2010		2,196,910		1,322,737		1,222,608		1,876,466		6,618,721
2011		2,306,756		1,388,874		1,283,738		1,970,289		6,949,657
2012		2,422,093		1,458,318		1,347,925		2,068,804		7,297,140
2013		2,543,198		1,531,234		1,415,321		2,172,244		7,661,997
2014		2,670,358		1,607,796		1,486,087		2,280,856		8,045,097
Thereafter		6,642,414		3,966,615		3,576,714		5,275,884		19,461,627
		18,781,730		11,275,575		10,332,393		15,644,542		56,034,240

The compensation agreements also call for the issuance of options as follows:

Option

Options

Total

Exercise

Employee

Per Year

Options

Price

Expiration

CEO

3,000,000

30,000,000

0.13

2/28/05-2/28/15

Officer

1,000,000

10,000,000

0.13

2/28/06-2/28/16

Except as herein above described, the Company has no other employment contracts. Further, it has no retirement, pension, and profit sharing, insurance or medical reimbursement plan covering its officers or directors.

Share Ownership

The following table sets forth at May 31 2009, the stock ownership of each of the officers and directors of the Company.

	Relationship	Number		Percentage
	to Company	of Shares		of Class

Dr. Christopher McCormack	Officer, Director		6,194,204		5.0	%

Salim Ghafari	Officer, Director		-0-		0	%
Sharon Trotman	Officer, Director		-0-		0	%

Item 7. Major Shareholders and Related Party Transactions.

Major Shareholders

The following table sets forth at May 31 2009, the stock ownership of each person known by the Company to be a beneficial owner of five per cent (5%) or more of the Company’s Common Stock, individually and as a group.

	Relationship	Number		Percentage
Name and Address	to Company	of Shares		of Class

Dr. Christopher McCormack, PO Box AP59205-S3315, Nassau, Bahamas	Officer, Director		6,194,204		5.0	%
International Environmental Energy Corp., Hopewell Centre, 183 Queens Road Hong Kong			10,125,000		8.1	%

Related Party Transactions

On October 22, 2007 Biosphere Development Corp. (Bahamas) entered into an agreement with Freedom Renewable Energy Corp. (“Freedom”) to license a right to the use of Biosphere Processing System Technology for a consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom, which makes her a related party. The Company paid accounting related fees of $9,594 on behalf of Freedom. The amount due is payable on demand and does not accrue interest. The Company received a deposit of $300,000 from Freedom.

Payable to stockholder is the payment the stockholder made for the Company. The payable bears a stated interest taye of 8.5% per annumn and is due to be paid on November 1, 2012. As at May 31, 2009 and 2008, the amount outstanding including accumulated interest were $7,372,130 and 6,051,269, respectively. For the year ended May 31, 2009 and 2008, interest expense for payable to stockholder were $577,540 and $224,125, respectively.

On May 24, 2007, in a private transaction, a stockholder transferred a note receivable from the Company to a related party. The note is for an amount of $6,545,239 at a stated interest rate of 8.5% per annum. The note is due to be paid on November 1 2012. The holder of the note has the option to receive the payment in the form of common stock. Should the note holder choose to convert the note, the share is to be issued at $0.13 per share which has been agreed to be the fair value of the stock on the date of the agreement. As at May 31, 2009, the amount outstanding including accumulated interest was $7,717,780.

The Company borrowed $1,456,677 from Eden Development Ltd, Chelise Investment Ltd and Mcintosh Enterprises and $1,415,635 from Sean O’Cearbhaill. These borrowings were made from these related parties during the fiscal year 2000. The notes are repayable in 2012 and have a stated interest rate of 8.5%. At May 31, 2009, the amounts outstanding including accumulated interest amounted to $8,845,578.

For the year ended May 31, 2009 and 2008, interest expense for notes payable to stockholders were $1,297,591 and $1,195,935, respectively.

See “Employment Agreements” above for information on compensation agreements entered into with officers.

Item 8. Financial Information.

A. Con solidated Statements and Other Financial Information.

Please refer to Item 17 for our consolidated financial statements and the report of the independent registered public accounting firm.

Legal Proceedings

As explained in Note 1 to the audited financial statements included with this report, the Delaware Company is consolidated into the financial statements as it has proceeded to liquidate under the Bankruptcy laws. The Delaware Company had no assets as at May 31, 2008 and 2007 and had long-term liabilities and an accumulated net deficit of approx $10.5 million for the years ended May 31, 2008 and 2007. The liabilities have not been discharged by the bankruptcy court at this time. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

There are no other material pending legal proceedings to which the Company is a party or to which any of its property is subject.

Dividend Distribution Policy

We have not paid any cash dividends to date and we do not intend to pay cash dividends in the foreseeable future.

B. Significant Changes.

Except as otherwise disclosed in this Annual Report, there has been no significant change in our financial position since May 31, 2009.

Item 9. The Offer and Listing.

Offer and Listing Details

The Company’s Common Stock is presently being traded in the over-the-counter market under the symbol “GEECF” and is listed on the OTC Bulletin Board. The following chart sets forth the range of the high and low sales prices per share of our common stock for each period indicated. The quotations represent prices between dealers and do not include retail markups, markdowns, commissions or other adjustments and may not represent actual transactions.

For the year:

Period	High		Low

Fiscal year ended May 31, 2009	$	0.55	$	0.10
Fiscal year ended May 31, 2008	$	0.67	$	0.03
Fiscal year ended May 31, 2007	$	0.47	$	0.09
Fiscal year ended May 31, 2006	$	1.65	$	0.11
Fiscal year ended May 31, 2005	$	2.88	$	0.15

For the quarter:

Period	High		Low

Fiscal year ending May 31, 2010:

June 1, 2009 to Aug. 31, 2009	$	0.39	$	0.09
Sept. 1, 2009 to Nov. 30, 2009	$	0.30	$	0.14

Fiscal year ended May 31, 2009:

June 1, 2008 to Aug. 31, 2008	$	0.55	$	0.21
Sept. 1, 2008 to Nov. 30, 2008	$	0.42	$	0.14
Dec. 1, 2008 to Feb. 29, 2009	$	0.21	$	0.10
March 1, 2009 to May 31, 2009	$	0.18	$	0.10

Fiscal year ended May 31, 2008:

June 1, 2007 to Aug. 31, 2007	$	0.26	$	0.10
Sept. 1, 2007 to Nov. 30, 2007	$	0.15	$	0.07
Dec. 1, 2007 to Feb. 29, 2008	$	0.34	$	0.03
March 1, 2008 to May 31, 2008	$	0.67	$	0.27

For the month:

Period	High		Low

June 1, 2009 to June 30, 2009	$	0.15	$	0.09
July 1, 2009 to July 31, 2009	$	0.39	$	0.12
Aug. 1, 2009 to Aug. 31, 2009	$	0.22	$	0.15
Sept. 1, 2009 to Sept. 30, 2009	$	0.29	$	0.14
Oct. 1, 2009 to Oct. 31, 2009	$	0.30	$	0.18
Nov. 1, 2009 to Nov. 30, 2009	$	0.29	$	0.18

On May 31, 2009 the reported high and low sales prices for the Company’s Common Stock was $0.105 and $0.105, respectively. The number of record holders of the Company’s common stock on May 31, 2009 was approximately 410. This does not reflect persons or entities that hold their stock in nominee or “street name”.

The Company has not paid any cash dividends to date. Whereas there are no restrictions on the Company’s ability to pay dividends, the Company intends to retain any future earnings to finance the development and expansion of its business and there are currently no plans to pay any cash dividends in the foreseeable future.

Plan of Distribution

Not applicable.

Markets

See “Offer and Listing Details” above.

Selling Shareholders

Not applicable.

Dilution

Not applicable.

Expenses of the Issue

Not applicable.

Item 10. Additional Information.

A. Share Capital.

Not applicable.

B. Memorandum and Article of Association.

The following summarizes certain provisions of the Company’s Memorandum of Association and Articles of Association (hereinafter referred to as “the Memorandum and Articles of Association”). This summary is qualified in its entirety by reference to the Company’s Memorandum and Articles of Association. Information on where investors can obtain copies of the Memorandum and Articles of Association is described under the heading “Documents on Display” under this Item.

Objects and Purposes

The Company was incorporated in the Commonwealth of the Bahamas under the name Global Environmental Energy Corp. Its registered office in the Commonwealth of The Bahamas is located at CB13277, Cable Beach, Nassau, Bahamas. The Registered Agent in charge thereof is Raynard Rigby.

Clause 3 of the Company’s Memorandum of Association provides that its objects and purposes are to engage in any object or purpose not prohibited by the International Business Companies Act, 2000, or by any other law for the time being in force in the Bahamas.

Directors

Directors need not be a member of the Company and no shareholding qualification shall be necessary to qualify a person as a Director. The remuneration, if any, of the Directors shall from time to time be determined by the Members in general meeting or by Resolution of Directors at any time and such remuneration shall be deemed to accrue from day to day. The Directors may also be paid all traveling, hotel and other expenses properly incurred in attending and traveling to and returning from meetings of the Directors or of any committee of the Directors or general meeting of the Members or in connection with the business of the Company.

Shares of Stock

The shares in the Company shall be issued in the currency of the United States of America. The total authorized capital of the Company shall be $202,000. The Company shall be authorized to issue two (2) classes of Shares. One class shall be designated as Common Stock and shall be voting stock of the Company and the other class shall be Preferred Stock which shall be non-voting stock of the Company. The total number of Shares of Common Stock which the Company is authorized to issued is 1,000,000,000 shares, with a par value of two tenths of one cent ($0.002) each. The total number of Shares of Preferred Stock which the Company shall have authority to issue shall be 20,000,000 shares which shall have a par value of one hundredth of a cent ($0.0001) each and which may be issued in series, The terms, conditions and character of the Preferred Stock shall be fixed by the Board of Directors of the Company at or prior to the time any of such Preferred Stock is issued by the Company.

C. Material Contracts

The following is a summary of the material contracts in which we or any of our subsidiaries have been a party to for the past two years, other than contracts entered in the ordinary course of business:

See “Item 4. Information on the Company – Biosphere Process System – Licensing Agreements” for information on licensing agreements entered into by the Company with other parties.

In addition, on July 24, 2009, the Company entered into a manufacturing agreement with World Green Energy Company Limited whereby World Green will act as a non-exclusive general contractor in Thailand to manufacture Biosphere Process Systems and install such systems as designated by the Company and provide start-up service, support and maintenance for such systems in Thailand.

D. Exchange Control.

Under Bahamian law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

E. Taxation.

Certain U.S. Federal Income Tax Considerations

The following is a general discussion of certain U.S. federal income tax consequences to the acquisition, ownership and disposition of our shares. For purposes of this discussion, a “U.S. Holder” means an individual citizen or resident of the United States, a corporation or entity treated as a corporation organized under the laws of the United States or of any state or political subdivision thereof, or an estate or trust the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source.

Rules regarding partnerships are complex. Partners in partnerships should consult their tax advisers regarding the implications of owning our shares.

This discussion is not intended to be exhaustive and is based on statutes, regulations, rulings and judicial decisions currently in effect. This discussion does not consider any specific circumstances of any particular U.S. Holder and applies only to U.S. Holders that hold our shares as a capital asset. Investors are urged to consult their tax advisers regarding the U.S. federal tax consequences of acquiring, holding and disposing of our shares, as well as any tax consequences that may arise under the laws of any foreign, state, local or other taxing jurisdiction.

IRS Circular 230 Disclosure

To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that: (i) any U.S. federal tax advice contained in this document (including any attachment) is not intended or written by us to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties under the Internal Revenue Code; (ii) such advice was written in connection with the promotion or marketing of the transactions or matters addressed herein; and (iii) taxpayers should seek advice based on their particular circumstances from an independent tax advisor.

Ownership of Our Shares

Dividends on our shares paid to U.S. Holders will be treated as dividend income for U.S. federal income tax purposes to the extent of our undistributed current or accumulated earnings and profits as computed for U.S. federal income tax purposes. In the case of an individual U.S. Holder, such dividend income will be eligible for a maximum tax rate of 15% for dividends received before January 1, 2009, provided that such holder holds the our shares for at least 60 days of the 121-day period beginning 60 days before the date on which our shares become ex-dividend with respect to such dividend and certain other conditions are satisfied. Furthermore, such dividends will generally not be eligible for the dividends received deduction available to certain U.S. corporations under Section 243 of the Internal Revenue Code of 1986, as amended.

We are not a “passive foreign investment company” (a “PFIC”) or a “controlled foreign corporation” (a “CFC”) for U.S. federal income tax purposes. We are not a CFC, since U.S. persons each owning (directly, indirectly or by attribution) 10% or more of the voting power or of our stock (“10% Shareholders”) do not collectively own more than 50% of the voting power or value of our stock. If more than 50% of the voting power or value of our stock were owned (directly, indirectly or by attribution) by 10% Shareholders, we would become a CFC and each such 10% Shareholder would be required to include in its taxable income as a constructive dividend an amount equal to its share of a portion of our undistributed income. If our foreign ownership interests were to decrease, or if U.S. persons were to acquire a greater ownership interest in our foreign stock holders, then it is possible that we could become a CFC if we otherwise satisfied the tests set forth above.

We are not a PFIC because we do not anticipate that more than 75% of our annual gross income will consist of certain “passive” income or more than 50% of the average value of our assets in any year will consist of assets that produce, or are held for the production of, such passive income. If such income and asset tests were not met and we were to become a PFIC, U.S. Holders would, in certain circumstances, be required to pay an interest charge together with tax calculated at maximum rates on certain “excess distributions” (defined to include any gain on the sale of stock).

If we were a PFIC, an individual U.S. Holder would not be eligible for the 15% tax rate on dividends discussed in the first paragraph of this section.

Any gain or loss on the sale or exchange of our shares by a U.S. Holder will be a capital gain or loss. If the U.S. Holder has held such our shares for more than one year, such gain or loss will be a long-term capital gain or loss.

Annual filings of Form 5471 may be required from certain U.S. persons owning 10% or more of our stock.

Certain Bahamian Tax Considerations

The following is a brief and general summary of certain Bahamian tax matters as they may relate to the Company and the holders of the our shares of the Company. The discussion is not exhaustive and is based on Bahamian law currently in effect.

The Bahamas does not impose any income, capital gains or withholding taxes. Therefore, the Company will not be subject to income tax in The Bahamas on an ongoing basis and if we were to pay dividends on our shares to holders thereof, they would not be subject to a Bahamian withholding tax. The Company, however, is subject to gaming taxes and other governmental fees and charges. There are no reciprocal tax treaties with The Bahamas.

F. Dividends and Paying Agent.

Not applicable.

G. Statement by Experts.

Not applicable.

H. Documents on Display.

The Company is subject to the informational requirements of the Securities and Exchange Act of 1934, as amended. In accordance with these requirements we file reports and other information with the Securities and Exchange Commission. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by the Commission at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates from the Public Reference Section of the Commission at its principal office in Washington, D.C. 20549. The SEC maintains a website (http://www.sec.gov.) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

I. Subsidiary Information.

Please refer to “Item 4. Information on the Company” for information on our significant subsidiaries.

Item 11. Quantitative and Qualitative Disclosures About Market Risk.

The Company is a smaller reporting company as defined in Rule 405 of the Securities Act of 1933, as amended, and Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and therefore need not provide the information requested by this item.

Item 12. Description of Securities Other than Equity Securities.

Not applicable.

PART II

Item 13. Defaults, Dividend Arrangements and Delinquencies.

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds.

None.

Item 15T. Controls and Procedures.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of May 31, 2009, these disclosure controls and procedures were not effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure, primarily due to the Company’s minimal financial staff which prevents us from segregating duties which management believes is a material weakness in our internal controls and procedures. We hope to address such weakness and work with our auditors and other outside advisors to improve our controls and procedures.

There have been no material changes in internal control over financial reporting that occurred during the fiscal year covered by this report that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Based on our evaluation, our management has concluded that our internal control over financial reporting was not effective as of May 31, 2009 primarily due to the weakness described above.

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

Item 16A. Audit Committee Financial Expert.

We do not have an audit committee financial expert, as such term is defined in Item 16A of Form 20-F, serving on our audit committee because we have no audit committee and are not required to have an audit committee because we are not a listed security. The entire Board of Directors is the Company’s defacto audit committee.

Item 16B. Code of Ethics.

The Board of Directors has adopted a Code of Ethics applicable to all of our employees, officers and directors(including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions). A copy of the Code of Ethics will be provided to any person without charge upon written request to the Company at P.O. Box CB-13277, Cable Beach, Nassau, Bahamas. In addition, a copy of the Code of Ethics can be found as Exhibit 11.1 to our Annual Report on Form 20-F for the fiscal year ended May 31, 2007.

Item 16C. Principal Accountant Fees and Services

The following is a summary of the fees billed to us by the principal accountants to the Company for professional services rendered for the fiscal years ended May 31, 2009 and May 31, 2008:

Fee Category	2009 Fees		2008 Fees

Audit Fees	$	65,000	$	75,000
Audit Related Fees	$	0	$	0
Tax Fees	$	0	$	0
All Other Fees	$	0	$	0

Total Fees	$	65,000	$	75,000

Audit Fees. Consists of fees billed for professional services rendered for the audit of our financial statements and services that are normally provided by the principal accountants in connection with statutory and regulatory filings or engagements.

Audit Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees”.

Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice and tax planning.

All Other Fees. Consists of fees for product and services other than the services reported above.

Pre-Approval Policies and Procedures

Prior to engaging its accountants to perform a particular service, the Company’s Board of Directors obtains an estimate for the service to be performed. All of the services described above were approved by the Board of Directors in accordance with its procedures.

Item 16D. Exemptions from the Listing Standards for Audit Committees.

Not applicable.

Item 16E. Purchase of Equity Securities by the Issuer and Affiliated Purchasers.

None.

Item 16F. Change in Registrant’s Certifying Accountant.

Not applicable.

Item 16G. Corporate Governance.

Not applicable.

PART III

Item 17. Financial Statements.

See the Financial Statements annexed to this report.

Item 18. Financial Statements.

The Company has elected to provide financial statements pursuant to Item 17.

Item 19. Exhibits.

		Incorporated by
		Reference to

1.1	Memorandum of Association (Bahamas)	Exhibit 3.1 (1)
1.2	Articles of Association	Exhibit 3.2 (1)
4.1	Biosphere Technology License Agreement with Global NRG, Ltd. dated October 1, 2007	Exhibit 4.5 (2)
4.2	Biosphere Technology License Agreement with Freedom Renewable Energy dated October 22, 2007	Exhibit 4.7 (2)
4.3	Biosphere Technology License Agreement with Spectrum Blue Steel Consultants dated June 2, 2008	*
4.4	Biosphere Technology License Agreement with Wister Associated Inc. dated January 1, 2009	*
4.5	Biosphere Technology License Agreement with Indisporne Limited dated June 2, 2008	*
4.6	Biosphere Technology License Agreement with SC Waste To Energy SRL dated June 5, 2009	*
4.7	Biosphere Technology License Agreement with Jet Black Kenya Limited dated December 23, 2008	*
4.8	Biosphere Technology License Agreement with Northwest Lawyer Agency dated August 17, 2007	*
8.1	Subsidiaries of the Company	*
11.1	Code of Ethics	Exhibit 11.1 (3)
12.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)	*
12.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rules 13a-14 and 15d-14 of the Exchange Act)	*
13.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350)	*

*	Filed herewith.

(1)	Filed as an exhibit to the Company’s Current Report on Form 8-K filed on August 31, 2004, and incorporated by reference herein.

(2)	Filed as an exhibit to the Company’s Annual Report on Form 20-F for the fiscal year ended May 31, 2008, and incorporated by reference herein.

(3)	Filed as an exhibit to the Company’s Annual Report on Form 20-F for the fiscal year ended May 31, 2007, and incorporated by reference herein.

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

	GLOBAL ENVIRONMENTAL ENERGY CORP. (Registrant)

Date: December 15, 2009	By:	/s/ Dr. Christopher McCormack
		Dr. Christopher McCormack
		Chairman and Chief Executive Officer

CERTIFIED PUBLIC ACCOUNTANTS, P.C.

15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212) 513-1930

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Global Environmental Energy Corp.

We have audited the accompanying consolidated balance sheets of Global Environmental Energy Corp. and subsidiaries (“the Company”) as of May 31, 2009 and 2008 and the related statements of operations, changes in stockholders’ (deficit) and cash flows for each of the years in the three-year period 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.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Global Environmental Energy Corp. and Subsidiaries at May 31, 2009 and 2008 and the results of its operations and its cash flows for each of the years in the three year period then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s dependence on outside financing, lack of sufficient working capital and its losses from operations raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans as to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.


Kempisty & Company
Certified Public Accountants P.C.
New York, New York

November 24, 2009

F-1

Global Environmental Energy Corp

Consolidated Balance Sheets

	May 31
	2009			2008
ASSETS

Current Assets:
Cash in bank	$	100,066		$	-
Due from affiliate (Note 6)		9,594			-
Total Current Assets		109,660			-

Equipment deposit Net of Reserve (Note 8)		-			-
Other Assets		2,500			2,500

TOTAL ASSETS	$	112,160		$	2,500

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities:
Bank overdraft	$	-		$	368
Accrued expenses		3,379,081			100,000
Advance receipt-affiliate (Note 6)		300,000			-
Current portion of notes payable to shareholders (Note 8)		10,160,129			25,425,896

Total Current Liabilities		13,839,210			25,526,264

Long-term Liabilities:
Salaries and benefits payable		69,717,957			54,011,666
Notes payable to stockholders (Note 7)		16,563,358			-
Deferred Revenue		350,000			350,000
Payable to stockholder (Note 6)		7,372,130			6,051,269
Total Long-term Liabilities		94,003,445			60,412,935

Total Liabilities		107,842,655			85,939,199

Commitment and contingencies:

Stockholders’ Deficit:
Series A preferred stock, one share convertible to one share of common; par value $0.001, 10,000,000 shares authorized, none issued and outstanding					-
Series B preferred stock, one share convertible to one share of common, par value $0.001, 16,000,000 shares authorized, none issued and outstanding					-
Common stock, $0.002 par value, 1,000,000,000 shares authorized, 125,661,618 and 125,031,618 shares issued and outstanding as of May 31, 2009 and 2008, respectively		251,325			250,065
Additional paid in capital		65,415,789			61,660,792
Accumulated Deficit		(173,397,609	)		(147,847,556	)
Total Stockholders’ Deficit		(107,730,495	)		(85,936,699	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	112,160		$	2,500

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

F-2

Global Environmental Energy Corp

Consolidated Statements of Operations

	For the Year Ended May 31,
	2009			2008			2007

General and administrative expenses:
Consulting fees	$	19,785,348		$	13,716,598		$	19,683,225
Administrative expenses		423,117			1,180,450			1,105,880
Stock based compensation		3,466,457			2,652,337			2,370,676
Total general and administrative expenses		23,674,922			17,549,385			23, 159,781

Net Loss from continuing operations		(23,674,922	)		(17,549,385	)		(23,159,781	)

Other expense:
Interest expense		(1,875,131	)		(1,440,060	)		(1,172,404	)
Net Loss	$	(25,550,053	)	$	(18,989,445	)	$	(24,332,185	)

Basic and fully diluted net loss per common share:
Loss per share	$	(.20	)	$	(0.16	)	$	(0.31	)

Weighted average number of shares used in computing basic and diluted loss per share		125,630,550			119,364,951			77,404,311

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

F-3

Global Environmental Energy Corp

Consolidated Statements of Cash Flows

	For the Year Ended May 31,
	2009			2008			2007

CASH FLOWS ACTIVITIES OPERATING ACTIVITIES:
Net Loss	$	(25,550,053	)	$	(18,989,445	)	$	(24,332,185	)
Adjustments to reconcile net loss to net cash used in operating activities:
Shares issued for consulting service					780,000			-
Shares issued for services		289,800			390,000			4,071,783
Stock based compensation		3,466,457			2,652,337			2,370,676
Expense paid by stockholder		743,321			2,935,086			2,872,058
Changes in operating assets and liabilities:
Current assets		(9,594	)
Accrued expenses		3,279,081			(680,000	)		780,000
Advance receipt-affiliate		300,000
Salaries and benefits payable		15,706,291			11,471,962			13,065,123
Payable to stockholder-interest accrual		577,540			244,125			-
Notes payable to stockholders-interest accrual		1,297,591			1,195,935			1,172,404
Total adjustments		25,650,487			18,989,445			24,332,044
CASH PROVIDED (USED) IN OPERANTING ACTIVITIES:		100,434			-			(141	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft		(368	)		-			141

CASH PROVIDED (USED) BY FINANCING ACTIVITIES		(368	)		-			141

NET INCREASE IN CASH		100,066			-			-

CASH
Beginning of year		-			-			-
End of year	$	100,066		$	-		$	-

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid in cash during the year	$	-		$	-		$	-

NON-CASH FINANCING ACTIVITIES:
Note assigned from stockholder to related party	$	-		$	-		$	6,545,239
Issuance of common stock for debt	$	-		$	780,000		$	1,950,000
Expense paid by stockholder	$	743,321		$	2,935,086		$	2,872,058

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

F-4

Global Environmental Energy Corp

Consolidated Statements of Changes in Stockholders’ Deficit

For the Year Ended May 31, 2009, 2008 and 2007

	Common Stock				Additional						Total
	Par Value $0.002				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Deficit
Balances May 31, 2006		67,045,916	$	134,093	$	48,781,968		$	(104,525,926	)	$	(55,609,865	)

Shares issued for services		16,855,702		33,712		4,038,071			-			4,071,783

Shares issued for investment in affiliate		16,130,000		32,260		(32,260	)		-			-

Value of stock warrants issued for services		15,000,000		30,000		1,920,000			-			1,950,000

Stock options issued as compensation		-		-		2,370,676			-			2,230,676

Net Loss		-		-		-			(24,332,185	)		(24,332185	)

Balances at May 31, 2007		115,031,618		230,065		57,078,455			(128,858,111	)		(71,549,591	)

Shares issued for consulting service		3,000,000		6,000		774,000			-			780,000

Shares issued for investment in affiliate		1,000,000		2,000		388,000			-			390,000

Shares issued for debt conversion		6,000,000		12,000		768,000			-			780,000

Stock options issued as compensation		-		-		2,652,337			-			2,652,337

Net Loss		-		-		-			(18,989,445	)		(18,989,699	)

Balances at May 31, 2008		125,031,618		250,065		61,660,792			(147,847,556	)		(85,936,699	)

Shares issued for consulting service		630,000		1,260		288,540						289,800

Stock options issued as compensation						3,466,457						3,466,457

Net Loss									(25,550,053	)		(25,550,053	)

Balances at May 31, 2009		125,661,618	$	251,325	$	65,415,789		$	(173,397,609	)	$	(107,730,495	)

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

F-5

Global Environmental Energy Corp

Notes to Consolidated Financial Statements

May 31, 2009, 2008 and 2007

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Background

Global Environmental Energy Corp’s (Bahamas) (the “Company” or “GLOBAL”) was formed to become a fully integrated energy company whose interests include traditional oil and gas exploration and production, alternative energy sources, environmental infrastructure and electrical micro-power generation through it subsidiaries.

In May 2004 the Board of Global Environmental Energy Corp (Delaware) (a Delaware Corporation) (formerly Life Energy & Technology Holdings Inc., formerly Health Pak Inc., formerly Morgan Windsor Ltd., originally incorporated on December 28, 1978) approved the formation and incorporation of Global Environmental Energy Corp (Bahamas). Global Environmental Energy Corp (Bahamas) is a Bahamian Corporation (No. 134791 B) incorporated on June 24, 2004 under the Bahamian International Business Companies Act, 2000.

In August 2004 Life Energy & Technology Holdings, Inc (Delaware) authorized by board resolution a name change for the Company to Global Environmental Energy Corp (Delaware) and approved a change of its domicile from Delaware to the Commonwealth of the Bahamas maintaining a its principle place of business in New Orleans Louisiana.

On September 1, 2004 Global Environmental Energy Corp (Delaware) OTCBB trading symbol GEEC, CUSIP number # 379 44, and Global Environmental Energy Corp (Bahamas) completed a one for one share exchange. Upon the completion of the share exchange Global Environmental Energy Corp (Delaware) became a wholly owned subsidiary of Global Environmental Energy Corp (Bahamas). On May 19, 2005 Global Environmental Energy Corp (Delaware) commenced its reorganization in Federal Bankruptcy Court in New Orleans, Louisiana.

In December 2004 the Board of Global Environmental Energy Corp (Bahamas) authorized the formation and incorporation of two subsidiary companies, Biosphere Development Corp (Bahamas) and Sahara Petroleum Exploration Corp (Bahamas) with offices in New Providence, Commonwealth of the Bahamas.

Biosphere Development Corp (Bahamas) (“Biosphere”) is a Bahamian Corporation, (No. 134790 B) incorporated on December 17, 2004 under the Bahamian International Business Companies Act, 2000. Biosphere Development Corp (Bahamas) is an operating subsidiary of Global Environmental Energy Corp (Bahamas) and is actively pursuing overseas opportunities for the Biosphere Process™ System a unique licensed proprietary technology, EcoTechnology™, that supplies energy through an efficient and environmentally safe process. Biosphere has no assets or operations as of May 31, 2009 and 2008.

Sahara Petroleum Exploration Corp (Bahamas) is a Bahamian Corporation (No. 134791 B) formed under the Bahamian International Business Companies Act, 2000. Sahara Petroleum Exploration Corp (Bahamas) is an operating subsidiary for Global Environmental Energy Corp (Bahamas) and is inactive as of May 31, 2009 and 2008.

On February 25, 2005, Global Environmental Energy Corp (Bahamas) received notification from the NASD to begin trading as a foreign corporation. Global Environmental Energy Corp (Bahamas) was issued with both a new trading symbol GEECF and a CINS number P 477255 10 9 which denotes a foreign company trading on the OTCBB.

On April 28, 2005 Global Environmental Energy Corp (Bahamas) announced its intention to dividend Global Environmental Energy Corp (Delaware) to the shareholders of Global Environmental Energy Corp (Bahamas), with a record date of May 28, 2005. All shares of common stock of Global Environmental Energy Corp (Delaware) owned by Global Environmental Energy Corp (Bahamas) were to be distributed as a stock dividend on a pro-rata basis to all of the shareholders of Global Environmental Energy Corp (Bahamas) as of May 28, 2005. The distribution of the common stock of Global Environmental Energy Corp (Delaware) was anticipated to be delivered to the shareholders of Global Environmental Energy Corp (Bahamas) on June 10, 2005 after which date Global Environmental Energy Corp (Bahamas) owned no shares of stock or equity in Global Environmental Energy Corp (Delaware). However, on May 19, 2005 Global Environmental Energy Corp (Delaware), filed a voluntary petition and commenced its reorganization pursuant to section 327(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Federal Rule of Bankruptcy Procedure 2014(a) in the Eastern District of Louisiana number 05-142201, which has been converted to Chapter 7 liquidation.

F-6

Basis of presentation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries namely, Global Environmental Energy Corp (Delaware) which is 100% owned by the company, and Biosphere Development Corp (Bahamas) and Sahara Petroleum Exploration Corp (Bahamas), both of which are majority owned subsidiaries. As of May 31, 2009 and 2008, Sahara Petroleum Exploration Corp. (Bahamas) is inactive. Global Environmental Energy Corp. (Delaware) is a fully owned subsidiary of the Company and as described above has proceeded to file under Chapter 7 of the Bankruptcy Code. Global Environmental Energy Corp. (Delaware) has been consolidated into the financial statements as it has proceeded to liquidate under the Bankruptcy laws. The Company neither exercises influence over this Delaware Company nor does it reflect the true financial position of the Company going forward. The Delaware Company had no assets as at May 31, 2009 and 2008 and had long-term liabilities and an accumulated net deficit of approx $10.5 million for the years ended May 31, 2009 and 2008. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

On the December 4, 2007 the Company, acquired 97.12% of the shares of Biosphere (Shaoxing) Technology Co. Ltd., a company formed in the Peoples Republic of China. No consideration was paid for the acquisition of the ownership interest. In January 2009 the company granted a Biosphere Technology License number BTLA-200901 to Wister Associated Inc., under which agreement the company transferred its shareholding in Biosphere (Shaoxing) Technology Co. Ltd to Wister.

On October 22, 2007 Biosphere Development Corp. (Bahamas) entered into an agreement with Freedom Renewable Energy Corp. (“Freedom”) to license a right to the use of Biosphere Processing System Technology for a consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom which makes her a related party.

The Company has evaluated subsequent events through the date that the financial statements were issued, which was December 15, 2009, the date of the Company’s Quarterly Report on Form 20-F for the period ended May 31, 2009.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Accounting for investment in subsidiaries and affiliates

The Company has investments in various entities that are guided through three majority owned subsidiaries. Global Environmental Energy Corp. (Delaware) is a fully owned subsidiary of the Company and as explained above has proceeded to file under Chapter 7 of the Bankruptcy Code. Global Environmental Energy Corp. (Delaware) has been consolidated because the liabilities have not been forgiven or discharged by the bankruptcy court. The Company also has a controlling interest of 85% in Biosphere Development Corp. (Bahamas) and Sahara Petroleum Exploration Corp. (Bahamas). Both these entities have been consolidated in accordance with generally accepted accounting principles in the United States of America.

In January 2009 Biosphere Development Corp. (Bahamas), one of the 85% owned subsidiaries of the Company, granted a Biosphere Technology License number BTLA-200901 to Wister Associated Inc., under which agreement the company transferred its 31% shareholding in Biosphere Asia Pacific, its 45% shareholding in Hong Kong based Biosphere (HK) Ltd, and its 31% shareholding in International Environmental Energy Corp to Wister.

F-7

Sahara Petroleum Exploration Corp (Bahamas), an 85% owned subsidiary of the Company, has been inactive since May 2007.

The flowchart below represents our ownership interest in various the various companies referred to above.

Use of Estimates

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

Revenue and Cost Recognition

The Company recognizes sale revenues upon delivery of the Biosphere Process ™ System to the buyer. Cost of sales includes the costs to manufacture and deliver the system to the purchaser and is recognized upon the complete manufacture and delivery of the system to the buyer.

Since each system is intended to be delivered to the clients with different requirements, manufacturing cost accordingly varies. However, in order to make the profit from the sales of systems manufactured on subcontract, the Company intends to make an annual royalty payment of at least 12.5% of the revenue of the system as provided for in license agreements.

Cash and Cash Equivalents

For the purpose of computing the changes in cash flows for the fiscal years, cash equivalents include cash and highly liquid short-term investments with original maturities of three months or less.

Reorganization under the Bankruptcy Code

On May 19, 2005 Global Environmental Energy Corp (Delaware), a fully owned subsidiary of the Company, filed a voluntary petition and commenced its reorganization pursuant to section 327(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Federal Rule of Bankruptcy Procedure 2014(a) in the Eastern District of Louisiana number 05-142201.

F-8

On April 28, 2005, prior to the filing under Chapter 11, the Company had authorized a dividend of all of the shares of Global Environmental Energy Corp (Delaware) (GEEC) to the existing shareholders of the Company. The dividend was to have been completed on May 28, 2005. The dividend has not been competed due to the filing of the bankruptcy by Global Environmental Energy Corp Delaware. In May 2007, the Chapter 11 bankruptcy has been converted to Chapter 7 liquidation.

Global Environmental Energy Corp (Delaware), a fully owned subsidiary of the Company, filed for liquidation under Chapter 7 of the Bankruptcy Code, has liabilities of $10,510,129. These liabilities have not been discharged by the bankruptcy court at this time. Therefore, the Company has carried the amounts owed by Global Environmental Energy Corp (Delaware) as amounts payable at year-end.

Property and Equipment

Property and equipment are stated at cost net of accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful life of the asset which approximates three years. Expenditures for major repairs that extend the useful life of the asset are capitalized. Minor repair expenditures are charged to expense as incurred.

Long Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement establishes financial accounting and reporting standards for the impairment of long-lived assets and certain intangibles related to those assets to be held and used, and for long-lived assets and certain intangibles to be disposed of. SFAS No. 144 requires, among other things, that the Company reviews its long-lived assets and certain related intangibles for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If this review indicates that the long-lived asset will not be recoverable, as determined based on the estimated undiscounted cash flows of the Company over the remaining amortization period, the carrying amount of the asset is reduced by the estimated shortfall of cash flows. The Company believes that none of the Company's long-lived assets were impaired

Income Taxes

The Company accounts for income taxes in accordance with the Statement of Financial Accounting Standards No. 109 (SFAS No. 109), “Accounting for Income Taxes. SFAS No. 109 requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax basis of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities. The Company is incorporated under the laws in Bahamas, which impose no corporate income tax. Therefore, the Company has not recognized any assets or liabilities in accordance with the provisions of SFAS No 109.

Stock based compensation

Effective May 31, 2006, the grants under the Plan are accounted for in accordance with the recognition and measurement provisions of Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), Share-Based Payment ("SFAS No. 123(R)"), which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and related interpretations. SFAS No. 123(R) requires compensation costs related to share-based payment transactions, including employee stock options, to be recognized in the financial statements.

F-9

As a result of the adoption of , the Company's results for the years ended May 31, 2009, 2008 and 2007 include share-based compensation expense of $3,466,457, $2,652,337 and $2,370,676 respectively.

For the purpose of determining compensation expense, the fair value of the options granted to employees and consultants is measured at the grant date using the Black-Scholes option-pricing model with the following assumptions:

Contractual Term	5 – 10 years
Expected Volatility		186	%
Expected Dividend Yield		0	%
Risk-Free Interest Rate		.4	%
Expected Term	1 – 3 years

The restricted shares issued by the Company values such shares based on the stock price on the grant date. The Company expenses these amounts into the statement of operations based on the vesting terms.

Recent Accounting Pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, “Non-controlling interest in Consolidated Financial Statements”. SFAS No. 160 requires all entities to report non-controlling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.

F-10

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which assume that the Company will continue on a going concern basis, including, the realization of assets and liquidation of liabilities in the ordinary course of business. As reflected in the accompanying consolidated financial statements, the Company incurred net losses of $25,550,053, $18,989,445 and $24,332,185 for the years ended May 31, 2009, 2008 and 2007 respectively and an accumulated deficit of $173,397,609 at May 31, 2009. There are significant uncertainties with regard to the Company’s ability to generate sufficient cash flows from operations or other sources to meet and fund its commitments with regard to existing liabilities and recurring expenses.

The Company intends to finance future operations from the proceeds of a subscription agreement for the sale of shares of common stock and an additional financing from the stockholders'. The loans/advances received from stockholders' are not payable in the next twelve months. Further, interest on loans/advances from stockholders' has been accrued and no payments have been made to date. Based on the financial position of the Company and its inability to generate cash from operations, the stockholders' have agreed to the repayment after the Company begins to generate future cash flows. These factors, along with the uncertainty expressed in Note 8, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 3 – FAIR VALUES OF FINANCIAL INSTRUMENTS

The Company adopted Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”), effective January 1, 2008. The provisions of SFAS 157 are to be applied prospectively.

SFAS 157 clarifies that fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Under SFAS 157, fair value measurements are not adjusted for transaction cost. SFAS 157provides for use of a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

Level 1:

Unadjusted quoted prices in active markets for identical assets or liabilities

F-11

Level 2:

Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3:

Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.

The carrying amounts of the salaries and benefits payable, notes payable to shareholders and other payables reported in the balance sheet approximate fair value as these instruments bear interest at terms that would be available with similar transactions with other third parties.

NOTE 4 – NET LOSS PER SHARE

Net loss per share has been computed in accordance with SFAS No. 128, “Earnings Per Share”. Basic loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the weighted average number of common and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of common stock issuable upon exercise of stock options and warrants using the treasury stock method. No adjustments to earnings were made for purposes of per share calculations. The Company has also issued stock options to employees and consultants for services rendered totaling 36,300,000, 16,000,000, and 13,000,000 for the years ended May 31, 2009, 2008 and 2007 respectively. These common stock equivalents have been excluded for the purpose of computing dilutive loss per share as their effect would have been anti-dilutive.

NOTE 5 –STOCK OPTION COMPENSATION

As part of compensation to employees and consultants, the Company granted stock options during fiscal year 2001 and fiscal year 2003 & 2004. The Company has no formal stock option plan for its employees. For the year ended May 31, 2009, stock-based compensation expense was $3,466,457. The following table summarizes common stock options outstanding from June 1, 2006 to May 31, 2009.

			Weighted Average		Weighted Average Years to		Aggregate Intrinsic
	Amount		Exercise Price		Maturity		Value

Outstanding at June 1, 2006		23,450,000		5.27		1.58		-
Issued		13,000,000		0.34		7.71		-
Expired		-
Exercised		-
Outstanding at May 31, 2007		36,450,000		3.51		3.76		-
Issued		16,000,000		0.22		5.25		-
Expired		-
Exercised		-
Outstanding at May 31, 2008		52,450,000		2.51		4.21		-
Issued		36,300,000		0.14		3.82		-
Expired
Exercised
Outstanding at May 31, 2009		88,750,000		1.54		4.06		-

F-12

(1).The aggregate intrinsic value is computed as the excess of the market price of the stock over the weighted average exercise price, multiplied by the total options outstanding. Where the market price of the stock is below the exercise price, no intrinsic value has been computed.

The following table summarizes the stock options outstanding as of May 31, 2009:

Outstanding					Exercisable
	Number		Weighted average		Weighted
Range of	Outstanding		Remaining		average		Number exercisable
Exercise prices	at May 31, 2009		contractual life		Exercise price		at May 31, 2009

$0.08-$0.16		37,250,000		4.26	$	0.10		37,250,000
$0.30-$0.34		37,000,000		4.87	$	0.32		37,000,000
$0.55		1,500,000		1.25	$	0.55		1,500,000
$1-$40		13,000,000		1.46	$	9.25		13,000,000

As of May 31, 2009, the fair value of unamortized compensation cost related to vested stock option awards was $2,242,953. Unamortized compensation cost as of May 31, 2009 is expected to be recognized in the next fiscal year end.

In January 2009 the company granted 25,300,000 shares of common stock valued at $3,289,000 based on the stock price on the date of the grant and 25,300,000 stock options valued at $2,549.160 to six of it’s consultants as part of their buy-out plan. As a result the company recorded $3,073,950 in consulting expense for this fiscal year ended May 31, 2009 with $1,962,968 of unamortized expenses to be recognized in the 2010 fiscal year. The shares were not been issued at the end of the fiscal year and have been recorded as a stock liability payable.

On June 19, 2008 the company issued 630,000 shares of common stock to consultants. As a result, the company recorded $289,800 in consulting expense in the statement of operations for the fiscal year ended May 31, 2009.

During fiscal year May 31, 2006, the Company issued 8,000,000 warrants exercisable at $.13 per share of common stock. As a result, the company recorded salary based compensation expense of $382,500 in the statement of operations.

In August 2005 the company granted to the Shenzhen Branch of Yankuang Group Co., Ltd., or any other party designated by Shenzhen Branch of Yankuang Group Co., Ltd., the option to purchase 1,500,000 shares of Global Environmental Energy Corp., at $0.558 per share. As a result, the Company recorded $1,266,822 in consulting expense in the statement of operations for the fiscal year ended May 31, 2006.

On August 30, 2005 the Company granted to Hong Kong based Prosper Commercial Company Limited or its registered assigns the option to purchase 6,500,000 shares of Global Environmental Energy Corp. expiring August 30, 2010. The options were exercisable at various prices, ranging from $1 to $40. As a result, the Company recorded $2,814,020 in consulting expense in the statement of operations for the fiscal year ended May 31, 2006.

In January 2006 the company granted to Singapore based Wister Associated Inc, a Panamanian Corporation (No. 9262) organized under the General Corporation Law of Panama or its registered assigns the option to purchase 6,500,000 shares of Global Environmental Energy Corp. expiring August 30, 2010. The options were exercisable at various prices, ranging from $1 to $40. As a result the Company recorded consulting expense of $4,081,530 in the statement of operations for the fiscal year ended May 31, 2006.

NOTE 6 – RELATED PARTY TRANSACTIONS

Investment in Freedom Renewable Energy Corp (“Freedom”)

On October 22, 2007 Biosphere Development Corp (Bahamas) entered into an agreement with Freedom to license a right to the use of Biosphere Processing System Technology for a consideration of $5 million. Freedom could not honor payment on this agreement and therefore, subsequently, on December 18, 2007, entered into forgiveness agreement with the Company wherein Freedom agreed to sell a 15% minority ownership interest to the Company in exchange for the amounts due to be paid to Biosphere Development Corp. The Company accounts for the investment in Freedom under the cost method of accounting. Based on the available facts, the Company will not recognize revenue from this transaction or report the related asset as Noreen Griffin, a former Chairperson of Global Environmental Energy Corp. (Delaware) and currently a consultant and stockholder of the Company, is non-executive Chairman, director and one of the stockholders of Freedom, which makes her a related party.

F-13

Due from affiliate

The Company paid accounting related fees of $9,594 on behalf of on of its affiliates Freedom Renewable Energy Corp. The amount due is payable on demand and does not accrue interest.

Advanced Receiptt- affiliate

The Company received a deposit of $300,000 from it’s affiliate Freedom Renewable Energy Corp.

Payable to Stockholder

For the year ended May 31, 2009 and 2008, interest expense for payable to stockholder were $577,540 and $224,125, respectively.

NOTE 7 – NOTES PAYABLE TO STOCKHOLDERS'

On May 24, 2007, in a private transaction, a stockholder transferred a note receivable from the company to a related party. The note is for an amount of $6,545,239 at a stated interest rate of 8.5% per annum. The note is due to be paid on November 1, 2012. The holder of the note has the option to receive the payment in the form of common stock. Should the note holder choose to convert the note, the share is to be issued at $0.13 per share which has been agreed to be the fair value of the stock on the date of the agreement. As at May 31, 2009 and 2008, the amount outstanding including accumulated interest were $7,717,780 and 7,113,161, respectively.

The Company borrowed $1,456,677 from Eden Development Ltd, Chelise Investment Ltd and Mcintosh Enterprises, respectively and $1,415,635 from Sean O’Cearbhaill. These borrowings were made from these related parties during the fiscal year 2000. The notes are repayable in November 2012 and have a stated interest rate of 8.5%. At May 31, 2009 and 2008, the amounts outstanding including accumulated interest amounted to $8,845,578 and $8,152,606, respectively.

For the year ended May 31, 2009 and 2008, interest expense for notes payable to stockholders were $1,297,591 and $1,195,935, respectively.

NOTE 8 – REORGANIZATION UNDER THE BANKRUPTCY CODE

On April 28, 2005 the Company announced its intention to dividend Global Environmental Energy Corp (Delaware) to the shareholders of the Company, with a record date of May 28, 2005. All shares of common stock of Global Environmental Energy Corp (Delaware) were to be distributed as a stock dividend on a pro-rata basis to all of the shareholders of the Company as of May 28, 2005. The distribution of the common stock of Global Environmental Energy Corp (Delaware) was anticipated to be delivered to the shareholders of the Company on June 10, 2005 after which date the Company would own no shares of stock or equity in Global Environmental Energy Corp (Delaware).

On May 19, 2005 Global Environmental Energy Corp (Delaware) filed a voluntary petition and commenced its reorganization pursuant to section 327(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Federal Rule of Bankruptcy Procedure 2014(a) in the Eastern District of Louisiana number 05-142201. On June 5, 2007, the Chapter 11 bankruptcy has been converted to Chapter 7 liquidation.

F-14

The Delaware Company had no assets as at May 31, 2009 and 2008 with an accumulated net deficit of approx $10.5 million for the years ended May 31, 2009 and 2008. These balances have been consolidated in the financial statements in accordance with the policy of the Company because the liabilities have not been forgiven.

The following is the Combined Condensed Balance Sheets of the Company at May 31, 2009 and 2008 which includes Global Environmental Energy Corp (Delaware) and the Company and its other subsidiaries.

	May 31, 2009									May 31, 2008
	Global & Subsidiaries			Global Delaware			Total			Global & Subsidiaries			Global Delaware			Total
ASSETS

Cash in bank	$	100,066		$	-		$	100,066		$	$ -		$	$ -		$	-
Due from affiliate		9,594						9,594
Property and equipment-net		-			-			-		$	-		$	-			-

Other Assets:
Equipment deposit					27,450,100			27,450,100						27,450,100			27,450,100
Reverse against equipment
Deposit					(27,450,100	)		(27,450,100	)					(27,450,100	)		(27,450,100	)
Trademark and copyrights		2,500			-			2,500			2,500			-			2,500

TOTAL ASSESTS	$	112,160		$	-		$	11 2,160		$	2,500		$	-		$	2,500

LIABILITIES AND
SHAREHOLDERS’ DEFICIT
Current Liabilities
Bank overdraft					-									-			368
Accrued Expenses		90,091						90,091			100,000						100,000
Customer deposit		300,000						300,000
Stock Liability		3,289,000						3,289,000
Current Portion of Notes
Payable to Shareholders		-			10,160,129			10,160,129			15,265,767			10,160,129			25,425,896
Salaries and benefits payable		-			-						54,011,666			-			54,011,666
Total Current Liabilities		3,679,091			10,160,129			13,839,210			69,377,801			10,160,129			79,537,930

Long-term Liabilities:

Salaries and benefits payable		69,717,957						69,717,957
Notes payable to shareholders		16,563,358
Deferred revenue		-			350,000			350,000						350,000			350,000
Payable to shareholders		7,372,131			-			7,372,131			6,051,269			-			6,051,269
Total Long-term Liabilities		93,653,446			10,510,129			94,003,446			6,051,269			350,000			6,401,269

Total Liabilities

Stockholders’ Deficit:
Common Stock		251,325			-			251,325			250,065			-			250,065
Additional paid in capital		65,415,789			-			65,415,789			61,660,792			-			61,660,792
Accumulated Deficit		(162,887,480	)		(10,510,129	)		(173,397,609	)		(137,337,42	)		(10,510,129	)		(137,337,427	)
Total Shareholders’ Deficit		(97,220,336	)		(10,510,129	)		(107,730,495	)		(75,426,570	)		(10,510,129	)		(85,936,699	)

TOTAL LIABILITIES AND
STOCKHOLDERS’ DEFICIT	$	112,160			-		$	112,160		$	2,500		$	-		$	2,500

F-15

NOTE 9 –RESERVE AGAINST EQUIPMENT DEPOSIT/INVESTMENTS

NOTE 10 – CONCENTRATIONS OF CREDIT RISK

NOTE 11 – COMMITMENTS AND CONTINGENCIES:

Consulting agreements:

The Company entered into various contracts in prior years to provide consulting in the areas of international sales and marketing, and engineering sales and technology for the next five to ten years. The contracts consisted of fees, monthly unaccountable expense allowances, bonus and pension benefits with increases of 5% per year. Payments were due monthly in cash or common stock of the Company or may be accrued by the Company by mutual agreement until the Company makes a profit. On January 2, 2009 the Company entered into an agreement with a majority of its consultants to terminate future obligations. The termination was based on the issuance of 25,300,000 shares of common stock and 25,300,000 stock options in the aggregate, valued at $3,289,000 which has been expensed by the Company and included as consulting expense in the accompanying consolidated financial statements. Accordingly, the disclosure below reflects the remaining commitments under contracts that are still in effect.

Remaining commitments under the consulting contracts are as follows:

			Unaccountable
Year ending May 31,	Salaries		Expense		Bonus		Pension		Total

2010		1,386,420		849,951		2,116,296		1,106,230		4,100,642
2011		1,455,741		892,449		2,222,110		1,161,541		4,305,674
2012		1,528,528		937,071		2,333,216		1,219,619		4,520,958
2013		1,604,955		983,925		2,449,877		1,280,599		4,747,006
2014		1,685,202		1,033,121		2,572,371		1,344,629		4,984,356
Thereafter		4,974,422		2,993,619		7,847,123		3,690,735		14,279,411

F-16

Employment agreements

The Company has ten year compensation agreements with its officers beginning February 25, 2005 replacing contracts entered into in November 2000. The agreements call for a base compensation in year one that increases 5% per year in years two through ten. Certain of the employees will receive a base monthly unaccountable expense allowance that also increases 5% per year in years two through ten. Payments are due monthly in cash or common stock of the company or may be accrued by the company by mutual agreement until the Company makes a profit. Additionally certain of the employees were awarded share options as part of their original contracts with exercise prices ranging between of $0.13 and $0.30 per share for certain employees. These options with exercise prices of $0.13 per share were adopted and incorporated into the 2005 contracts. Annual payments are also due for bonuses and pension which increase 5% per annum. The contracts also call for the payment of medical, dental, health and life insurance at prevailing rates. As at May 31, 2009 and 2008, salaries and benefit payable were $69,717,957 and $54,011,666 respectively.

Remaining commitments under the employment contracts are as follows:

			Unaccountable
Year ending May 31,	Salaries		Expense		Bonus		Pension		Total

2010		2,196,910		1,322,737		1,222,608		1,876,466		6,618,721
2011		2,306,756		1,388,874		1,283,738		1,970,289		6,949,657
2012		2,422,093		1,458,318		1,347,925		2,068,804		7,297,140
2013		2,543,198		1,531,234		1,415,321		2,172,244		7,661,997
2014		2,670,358		1,607,796		1,486,087		2,280,856		8,045,097
Thereafter		6,642,414		3,966,615		3,576,714		5,275,884		19,461,627
		18,781,730		11,275,575		10,332,393		15,644,542		56,034,240

The compensation agreements also call for the issuance of options as follows:

Option

Options

Total

Exercise

Employee

Per Year

Options

Price

Expiration

CEO

3,000,000

30,000,000

0.13

2/28/05-2/28/15

Officer

1,000,000

10,000,000

0.13

2/28/06-2/28/16

NOTE 12 – COMMON STOCK TRANSACTIONS

During fiscal 2009, the Company issued shares for consulting services rendered by consultants of 630,000 shares of common stock valued at $289,800.

During fiscal 2008, the Company issued shares for services rendered by consultants in 2007. As the performance conditions were met in 2007, the Company recorded a liability of $780,000 in connection with the issuance of 3,000,000 shares which was estimated to be approximate the fair value of the services rendered. The Company off-set the liability created in 2007 with the issuance of shares during the current fiscal year. The Company had notes payable to two stockholders amounting to $780,000 in the aggregate that we converted into 6,000,000 shares of common stock at the option of the note holder. Further, the Company also issued 1,000,000 in stock for services to consultants aggregating $390,000.

During the fiscal year 2007, the Company issued 15,000,000 shares for the conversion of notes totaling $1,950,000. Further, the Company also issued 19,856,062 shares for a total value of $4,851,783 to consultants for services provided to the Company. During the fiscal year 2007, in a private transaction, a shareholder assigned $6,000,000 of a note to a related party. The note is payable in 2012. There were no other changes to the note.

F-17