The Green Baron Report

Wednesday, May 19, 2010 – After Market Close

Green Baron New “Stock Alert”

Octus Energy, Inc.

(OTC BB: OCTI – $.14 per share)

www.OctusEnergy.com

Common Shares Outstanding / 44.867 million

Market Cap / $6.25 million

52-Week High / $.64

52-Week Low / $.0132

Average Price / $.2096 (50-day) .2190 200-day)

Average Volume / 30,320 (50-day) 23,398 (200-day)

Significant News Announced Yesterday;

Octus Announces Definitive Agreement to Acquire Quantum Energy Solutions

Leading Smart Energy Efficiency Company to Acquire a Pioneer in Energy Efficiency Project Development and Smart Energy Product Commercialization

Quantum’s Principals Have Executed More Than 1,500 Energy Projects Totaling Over $100 Million

Green Baron Believes OCTI Has Just Bottomed and Definitive Acquisition Announcement Sets Stage for Much More to Come; New Investor Interest from Purchase Agreement Expected to Drive Shares Higher

State and local government deficits are now at record levels. In order to shore up funds, the government plans to tax or raise prices on just about everything it has control of. One of the easiest targets is energy bills. Large utility customers are likely going to see big hikes in energy bills and may even begin to see new carbon surcharges. Now more than ever, it makes sense to significantly reduce the amount of energy we use, but HOW?

Today, The Green Baron Report officially introduces Octus Energy, Inc. (BB: OCTI) as our new Green Baron “Stock Alert”, and we strongly suggest members accumulate OCTI as close to our profile price as possible. Results compiled from the most recent trade prior to dissemination of this report to the subsequent high will be closely monitored at www.thegreenbaron.com and through email updates to members. Again, although we have very aggressive price projections for OCTI, we still suggest our members try to accumulate shares as close to our profile price as possible.

TRADER’S NOTES: OCTI is a fully reporting company traded on the OTC Bulletin Board and OTC QB with moderate volume on most days. Other than a few spikes, OCTI has traded for the past 52 weeks in a range primarily between .10 and .35 per share. Key news announced yesterday temporarily sent the shares up off of a historically low price. It appears there is not much stock available below .20 per share where the 50-day and the 200-day averages converge.

Market makers for OTBI are more active on the OTCQB exchange. For a real-time Level 2 market on OCTI that usually shows a tighter bid/offer spread, see

http://www.otcmarkets.com/pink/quote/quote.jsp?symbol=octi. We also suggest you compare this inside quote with your normal level 2 montage on the BB that can be found on many websites for free.

Octus, Inc. is a smart energy management company that reduces energy costs for commercial and institutional building by 50% or more through energy-efficient lighting, HVAC and energy management systems. Octus makes buildings smart and efficient through its proprietary Smart Energy Platform (OctusSEP) -- a portfolio of smart devices, sensors, network appliances and software-enabled energy management services.

The company's energy management software, Octus SmartPortal, enables building owners and managers to command, control and monitor energy use in real time, from any device. In addition, the company develops energy projects through the implementation and financing of energy-efficient lighting, mechanical and energy management measures. Octus was founded in 1983 and is headquartered in Davis, California.

The Green Baron Report believes Octus Energy stock OCTI makes sense as an investment right now for the following primary reasons:

Energy Efficiency is Now Important to Most Businesses – For years, businesses resisted spending money to save money. Rising energy costs and forced implementation of “green” energy solutions are quickly causing building owners to reconsider. Octus Energy can typically reduce energy costs by 30-50%.

Definitive Agreement to Acquire Quantum Energy Solutions – We view this as a “done deal” and predict the combination will bring tremendous interest into OCTI. Quantum and its principals have a rich history of successfully deploying energy efficiency projects throughout the United States and Canada.

Quantum Energy’s Client List - Quantum's principals have executed more than 1,500 energy projects totaling more than $100 million in value for clients including ARCO, Bank of America, Blockbuster, Chevron, Delta Airlines, Frito Lay, Hewlett-Packard, Home Depot, IKEA, Nabisco, Pepsi, Petco, Safeway, Sears, Siemens, and University of California.

Octus SmartCenter™ - The Company’s IP-based energy services appliance wirelessly connects and optimizes the energy-efficiency of commercial lighting and HVAC systems.

Wickool - Wickool is a passive evaporative cooling solution that generates efficiencies through the reuse of condensate created by commercial rooftop HVAC units. The product is a simple add-on to packaged HVAC systems – no moving parts, no electricity, installed in less than 10 minutes.

Strong Management Team - Octus is managed by a team of proven, entrepreneurial executives, and is supported by a world-class group of strategic partners and industry and professional advisors.

Huge market - The market for Octus’s solutions in the U.S. is an estimated $50 billion per year, based on the potential energy savings for commercial buildings. Octus monetizes the energy savings it creates.

Good Technicals – The stock of OCTI just bounced off strong support at about .10 per share and appears ready to challenge the 50-day and 200-day moving averages both at .20 per share. OCTI spent a lot of time this past year trading between .25 and .35 per share with the expectation of much higher prices.

About Octus Energy, Inc.

Octus Energy (OTCBB: OCTI.OB) is a smart energy efficiency company that significantly reduces energy costs for commercial and institutional building owners through the sale, implementation and management energy-efficient lighting, HVAC and energy automation systems. The market for Octus’s solutions in the U.S. is an estimated $50 billion per year, based on the potential energy savings for commercial buildings. Octus monetizes the energy savings it creates through three business units:

· Smart Energy Technologies: Proprietary and best-in-class energy-efficiency solutions including Wickool®, a passive evaporative cooling solution exclusively licensed from the University of California and commercially demonstrated by major retailers.

· Energy Project Development: Development, financing and management of commercial building energy retrofits, where the energy savings fund facility improvement. Octus and its partners have developed more than 1,500 energy-efficiency projects.

· The Octus Smart Energy Platform (OctusSEP): A portfolio of smart devices, sensors, network appliances and software-enabled energy management services that enable building managers to command, control and monitor energy use in real time, from any device.

Commercial development is propelled through affiliations with leading energy institutions, including the California Lighting Technology Center and the Western Cooling Efficiency Center. Octus was founded in 1983 and is headquartered in Davis, California.

Octus performs no-cost energy analyses, including Energy Star benchmarking, for building owners, managers and investors. The analysis includes recommendations for energy-savings activities, measures and retrofit projects to provide customers with the information needed to intelligently decide how to reduce energy use and costs.

Products

Measure. Manage. Save. That’s smart.

Introducing Octus SmartCenter™, an IP-based energy services appliance that wirelessly connects and optimizes the energy-efficiency of commercial lighting and HVAC systems. SmartCenter is simple to install and enables owners to save money immediately and, for years to come.

Networked Energy Efficiency

· Real-time reporting of when and where energy is used

· Control and program lighting and HVAC systems

· Monitor and verify energy use and savings

· Manage energy loads through automated demand response

· Real-time and historic energy use and savings reporting tools

· Consolidated, multi-site reporting and cost accounting

· Service alerts and equipment diagnostics

· Open, standards-based architecture and communication protocols

· Compatible with existing and future smart control systems

HVAC energy efficiency via evaporative cooling

Wickool is a passive evaporative cooling solution that generates efficiencies through the reuse of condensate created by commercial rooftop HVAC units. The product is a simple add-on to packaged HVAC systems – no moving parts, no electricity, installed in less than 10 minutes.

Smart Energy, Proven Performance

· Energy Efficiency: 5-10% efficiency gain; 2-3 year payback

· HVAC Operation: Enhance RTU operating efficiency and life; reduce maintenance

· Environmental: Reduce energy consumption; reuse/reclaim water

· Installation: Durable, simple, easy-to-install retrofit

Wickool was developed by the UC Davis Western Cooling Efficiency Center, with funding from the California Energy Commission and testing by Wal-Mart and Target.

Frequently Asked Questions from the Customer:

How much will the energy analysis cost?
Nothing. Our Company does not get paid until we develop and implement money-saving solutions.

What does an Energy Analysis include?
We begin by calculating the facilities’ ENERGY STAR rating. We then identify measures to make lighting systems and building envelope more energy efficient and to reduce the operational energy loads on the building. Finally, we will work with the HVAC contractor to improve the energy efficiency of the heating and cooling system. All analyses are focused on identifying immediate opportunities to save money. Customers will receive a report with initial findings, analyses, and recommendations for energy-savings activities, measures and retrofit projects to provide them with the information needed to intelligently decide how to reduce energy use and costs.

How much money can I save?
Most facilities waste energy. Octus can typically reduce energy costs by 30% to 50%.

I pass electrical expenses through to my tenants. Why should I invest in improving my building and reducing my energy costs?
First, building owners pay the electrical expenses for vacant space. Second, by reducing the tenants’ overall cost to occupy the building, the owner will increase chances of renewing their leases when they expire, avoiding the costs of new tenant improvements, commissions and unreimbursed expenses during vacancies. Third, energy-efficient buildings command higher lease rates. And fourth, the value of the building increases as it becomes more energy efficient.

What do you need from me to evaluate the potential savings?
All we need are the prior 24 months of utility bills and access to your building.

Is my building large enough to benefit from an Energy Analysis?
The following minimum building sizes are appropriate for an energy analysis:

Office: 20,000 Sq. Ft.

Retail: 20,000 Sq. Ft.

Warehouse/Distribution: 100,000 Sq. Ft.

Manufacturing: 50,000 Sq. Ft.

What are your qualifications to do this work?
Octus and its team have completed more than 1,500 energy analyses for similar buildings in the last 30 years. This is what we do – work with building owners to identify, develop and manage energy-savings initiatives.

How long does it take to complete the Energy Analysis?
Generally, once we’ve received the necessary information from the building manager, the initial analysis is performed – and recommendations are delivered – within four weeks.

Can Octus secure financing, utility company rebates and incentives, and federal tax credits for energy efficiency initiatives?
Yes. Octus works with a number of qualified project and equipment financing institutions to facilitate financing where the energy cost savings subsidize facility improvement investments. In addition, Octus and its partners have more than 30 years experience partnering with utility companies to design and implement rebates and incentives for building owners.

Recent Key Press Releases

Tuesday, May 18, 2010 – Octus Announces Definitive Agreement to Acquire Quantum Energy Solutions - DAVIS, CA - (MARKET WIRE) - Octus, Inc. (OTCBB: OCTI), a leading smart energy efficiency company, today announced the signing of a definitive agreement to acquire privately held Quantum Energy Solutions, Inc., a pioneer in energy efficiency project development and smart energy product commercialization.

"Quantum and its principals are energy industry leaders with a rich history of successfully deploying energy efficiency projects throughout the United States and Canada," said Chris Soderquist, Octus CEO. "When the transaction is completed, we believe the fusion of our companies, our capabilities, and our sales pipelines will significantly and immediately expand Octus's ability to develop energy efficiency projects. This will be a seminal step in Octus's growth as a leading developer of smart energy efficiency solutions."

Founded in 1974, Quantum was one of the first energy management companies in the United States to specialize in energy efficiency. Quantum's principals have executed more than 1,500 energy projects totaling more than $100 million in value for clients including ARCO, Bank of America, Blockbuster, Chevron, Delta Airlines, Frito Lay, Hewlett-Packard, Home Depot, IKEA, Nabisco, Pepsi, Petco, Safeway, Sears, Siemens, and University of California.

"Over the past three decades Quantum has helped evolve the energy-efficiency industry," said Quantum President Jim Collins. "Octus's project development approach -- including integration of innovative energy efficiency technologies and organization of creative project financing -- fills an unmet and rapidly expanding opportunity in the commercial building market space. In addition, we look forward to marketing the Octus Smart Energy Platform to Quantum's client base. The time to act is now, and together we are well poised to capitalize opportunities."

Wednesday, April 21, 2010 - Octus Secures Contract to Demonstrate LED Parking Garage Lighting System at Northern California Hotel-Casino - Octus, Inc. (OTCBB: OCTI), a leading smart energy efficiency company, today announced it has secured a contract to test and demonstrate energy-efficient LED parking garage fixtures for one of the largest hotel-casinos in Northern California.

"This is a sound opportunity for Octus to demonstrate how a major hotel-casino can reduce its energy use, expenses and carbon impact through a solid-state LED lighting system," explained Octus CEO Chris Soderquist. "In addition to the economic and environmental benefits for the hotel-casino, we anticipate the safety, security, visibility and visual comfort of the parking facility will greatly improve."

Octus is demonstrating two solid-state LED parking garage lighting products and concurrently performing an energy and technology analysis to:

· Provide a baseline technical and economic analysis of the hotel-casino's parking facilities to include energy use, operational cost and carbon footprint;

· Provide energy conservation and operational cost control alternatives, and a description of operating and maintenance procedures that will reduce energy consumption and operational costs;

· Project the amount of energy and operational costs that will be saved annually by the equipment, procedures and services recommended;

· Provide a 10-year financial model that shows anticipated facility costs and savings; and,

· Generate a report summarizing the audit, analysis, technology demonstration, and economic and environmental attributes.

The demonstration and analysis are scheduled to be completed by June 5, 2010.

Monday, April 19, 2010 - Octus Adds Commercial Real Estate and Product Marketing Executives to Its Management Team - Octus, Inc. today announced the addition of two executives to its management team, in preparation for the company's commercialization of the Octus Smart Energy Platform (OctusSEP) and the development, implementation and financing of its energy project pipeline. Joining the company are Katie Bolich as Marketing Manager, OctusSEP, and George Condon as Development Manager, Smart Energy Projects.

"The opportunity to automate, manage and finance smart energy initiatives -- to make buildings smart and efficient -- is core to our strategy," said Chris Soderquist, Octus CEO. "Katie Bolich is an accomplished technology industry executive who has created, marketed, and licensed innovative technologies with world-class companies. George Condon's experience as developer and manager of more than five million square feet of commercial properties is invaluable to our marketing, development, financing and management of energy efficiency projects. Together, Katie and George bring a wealth of immediately applicable experience to Octus."

Ms. Bolich has more than 15 years of business development and product marketing experience. She was Vice President of Licensing with WagerWorks, a pioneer in online gaming, where she developed and executed the company's licensing and intellectual property strategy, including establishing strategic partnerships with companies such as Sony and Hasbro. Previously, Ms. Bolich was the Director of Marketing for Silicon Gaming, a highly innovative slot manufacturer, whose games and system hardware helped reshape the slot machine industry. WagerWorks and Silicon Gaming were acquired by International Game Technology. Ms. Bolich earned a BA degree from Stanford University.

Mr. Condon has 22 years of commercial real estate experience. Prior to joining Octus, he developed more than 3.1 million square feet of industrial and office real estate for Panattoni Development Company, one of the largest commercial real estate development firms in the U.S. Prior to joining Panattoni, Mr. Condon managed more than 2.4 million square feet of office, industrial and R&D properties for clients such as Prudential, Equitable, Kaiser Permanente, and Wells Fargo. He earned a BS from Santa Clara University and an MBA from the University of California, Davis

Thursday, April 1, 2010 – Octus Presents Wickool Update to HVAC and Utility Industry Leaders - Octus, Inc. presented an update of the commercial development of Wickool, its proprietary evaporative cooling product, at the March 31, 2010 Western Cooling Efficiency Center's annual affiliate meeting. The presentation was delivered by Octus Senior Manager of Smart Energy Products, John Walter.

"The Western Cooling Efficiency Center drives innovation in the HVAC industry," said Walter. "This annual event provided Octus an opportunity to highlight the commercial efficacy and development of Wickool to an audience of HVAC industry leaders, including utility company, big box retail, and HVAC OEM executives. Based on their immediate feedback, we have a clear roadmap for Wickool's commercialization."

Wickool updates included:

· Initial product sales and installations executed in Q1, 2010.

· Late-stage commercial rooftop testing conducted by the Western Cooling Efficiency Center with Target Corp.

· Additional in-lab product development and testing.

· Intellectual property protection, including the grant of a trademark for the Wickool name and the University of California's filing of a patent application for the technology.

"Wickool addresses an important niche in cooling more efficiently," said Mark Modera, Ph.D., director of the WCEC and a Sempra Energy Distinguished Scholar in Energy Efficiency. "It makes use of the condensate water that is normally wasted from existing roof-top packaged air conditioners to improve their cooling efficiency, and can be applied as a retrofit accessory. Moreover, the cost of installing Wickool can be significantly offset by avoiding the need for condensate piping."

On September 1, 2009, Octus executed an exclusive worldwide license with the University of California, in all fields of use and with full rights to sublicense, for the Wickool technology.

Senior Management

Octus is managed by a team of proven, entrepreneurial executives, and is supported by a world-class group of strategic partners and industry and professional advisors.

Chris Soderquist, President, CEO & Director
Mr. Soderquist has 17 years experience founding, managing, advising, capitalizing and selling companies in the clean tech, high tech, professional services and private equity industries. Most recently, he co-founded and served as Managing Director of Crescendo, a luxury real estate investment firm that was acquired in 2008 by Abercrombie & Kent. He also created and sold a marketing strategy firm that he grew to 130 clients, and founded and directed several software companies. Previously Mr. Soderquist managed two business incubators, Technology Development Center and Venture Lab, and served on the board of directors of waste-to-energy company Sierra Energy, the Sacramento Entrepreneurship Academy(of which he was president for three years), the Sacramento Area Regional Technology Alliance, and UC Davis Connect. He earned a BS from Cal Poly, San Luis Obispo, and an MBA from the University of California, Davis.

George Ecker, CFO and Director
Mr. Ecker is the President and Director of Nova Mobility Systems, a company specializing in the design and manufacture of rugged handheld mobile computers. He has more than 25 years of entrepreneurial and management experience in international and domestic ventures. Previously, Mr. Ecker was the President and Managing Director of Channel Financial Group, a financial services company providing corporate consulting and strategic services to international private equity managers. He holds a Bachelor of Science degree in Finance, with honors, from the University of the State of New York.

John Argo, Director, Energy Projects & Finance
Mr. Argo has 21 years experience in large-scale project and technology management. Prior to joining Octus, Mr. Argo founded and was CEO of Q1 NanoSystems (Bloo Solar). He is co-inventor on 11 pending patents for ultra-thin film solar cells and nanostructured devices. He is a certified Project Management Professional and a member of the American Council on Renewable Energy (ACORE) Founding 500 and Solar Energy Industry Association (SEIA). He led teams implementing leading-edge solutions at Hewlett-Packard and Electronic Data Systems. Mr. Argo earned an MBA from the University of California, Davis and is currently President of the Graduate School of Management Alumni Association. He is also a founder and partner of Crystal Basin Cellars, a California winery.

Siva Gunda, Senior Engineer, Smart Energy Solutions
Mr. Gunda is the Southern California Edison International Energy Efficiency Fellow and an Emerging Venture Analyst with the UC Davis Energy Efficiency Center, where he commercializes energy efficiency technologies germinating from the California Lighting Technology Center and Western Cooling Efficiency Center. Previously, he was an industrial designer with General Electric and held positions with Pacific Gas and Electric, the California Air Resources Board, and the California Fuel Cell Partnership, where he garnered invaluable experience in both design and policy in energy efficiency. Gunda is completing his Ph.D. in mechanical engineering, with a focus on energy systems, at UC Davis.

Mananya Chansanchai, Energy Services Program Manager
Ms. Chansanchai was a PG&E Energy Efficiency Fellow and Emerging Venture Analyst for the UC Davis Energy Efficiency Center (EEC) where she focused on the development and commercialization of energy efficient technologies. Her work through the EEC included market sizing of lighting technologies for K-12 schools in conjunction with the California Lighting Technology Center (CLTC), background research of HVAC opportunities for educational facilities in conjunction with the Western Cooling Efficiency Center (WCEC), and developing a life cycle cost calculator for energy efficiency projects. Previously she worked at McKesson Corporation and Citibank. She earned an MBA from UC Davis and a B.A. from UC Santa Cruz.

John Walter, Senior Manager, Smart Energy Products
Mr. Walter has more than 25 years experience creating and leading high technology initiatives. Most recently, he was a consultant to Itron and a Vice President with Isaacson, Miller, an executive search firm. Previously, Mr. Walter was Managing Partner with The MarketTech Group, where he led high-level market research engagements for clients including Agfa, Boston Scientific, GE, Phillips, and Siemens. His prior experience includes work with Lawrence Livermore National Laboratory and Chevron, where he was a Reservoir and Production Engineer. Mr. Walter earned BS, MS and Degree of Engineer (Engineering Management) degrees from Stanford University, and an MBA from the University of California, Davis.

Katie Bolich, Marketing Manager, OctusSEP
Ms. Bolich has more than 15 years of business development and product marketing experience. She was Vice President of Licensing with WagerWorks, a pioneer in online gaming, where she developed and executed the company’s licensing and intellectual property strategy, including establishing strategic partnerships with companies such as Sony and Hasbro. Previously, Ms. Bolich was the Director of Marketing for Silicon Gaming, a highly innovative slot manufacturer, whose games and system hardware helped reshape the slot machine industry. WagerWorks and Silicon Gaming were acquired by International Game Technology (NYSE: IGT). Ms. Bolich earned a BA degree from Stanford University.

George Condon, Development Manager, Smart Energy Projects
Mr. Condon has 22 years of commercial real estate experience. Prior to joining Octus, he developed more than 3.1 million square feet of industrial and office real estate for Panattoni Development Company, one of the largest commercial real estate development firms in the U.S. Prior to joining Panattoni, Mr. Condon managed more than 2.4 million square feet of office, industrial and R&D properties for clients such as Prudential, Equitable, Kaiser Permanente, and Wells Fargo. He earned a BS from Santa Clara University and an MBA from the University of California, Davis.

Green Baron Conclusion

Octus Energy, Inc. is perfectly positioned to benefit from macroeconomic changes going on in the utility industry. Large customers are going to find they must implement significant and aggressive tools to reduce, what we anticipate, are going to be skyrocketing utility bills.

The definitive agreement to combine Quantum Energy Solutions appears to be ideal timing, and it will bring world class management and experience to Octus. Quantum’s rich history and client list is impressive. We are confident the combination has been well thought out, and we anticipate positive developments and synergies to occur soon.

The Green Baron Report believes OCTI has just put in a short-term bottom and is now going to trend higher. It is a perfect situation as a “Stock Alert”, and we anticipate increasing volume to go along with a move higher particularly over the near-term. Be sure to grab OCTI near the current profile price as we expect the stock to at least double over the next 30 to 60 days.

Contact:

Chris Soderquist

Octus

Email Contact

530/564-0200

http://octusenergy.com