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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          -----------------------------

                                    FORM 8-K
                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                 Date of Report:

                        (Date of earliest event reported)

                                  JUNE 19, 1006

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                               BLUE HOLDINGS, INC.
               (Exact name of registrant as specified in charter)

                                     NEVADA
         (State or other Jurisdiction of Incorporation or Organization)


       000-33297                                           88-0450923
(Commission File Number)                       (IRS Employer Identification No.)

                       5804 E. SLAUSON AVE., COMMERCE, CA
                                      90040
                         (Address of Principal Executive
                              Offices and zip code)

                                 (323) 725-5555
              (Registrant's telephone number, including area code)

                                       N/A
          (Former Name or Former Address, if Changed Since Last Report)


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing  obligation  of  registrant  under any of the
following provisions:

[_]      Written  communications  pursuant to Rule 425 under the  Securities Act
         (17 CFR 230.425)

[_]      Soliciting  material  pursuant to Rule 14a-12(b) under the Exchange Act
         (17 CFR 240.14a-12(b))

[_]      Pre-commencement  communications  pursuant to Rule  14d-2(b)  under the
         Exchange Act (17 CFR 240.14d-2(b))

[_]      Pre-commencement  communications  pursuant to Rule  13e-4(c)  under the
         Exchange Act (17 CFR 240.13e-4(c))

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ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

         On June 19, 2006,  Blue  Holdings,  Inc.  entered into an Agreement and
Plan of Merger ("Merger Agreement") among LR Acquisition Corporation, a District
of Columbia corporation and our wholly-owned subsidiary ("LR Acquisition"), Long
Rap, Inc., a District of Columbia  corporation ("Long Rap"), the stockholders of
Long Rap and Charles  Rendelman,  as the Long Rap stockholders'  representative,
pursuant  to which  Long Rap will  merge  with and into LR  Acquisition  with LR
Acquisition  surviving the merger. The consideration payable by us in connection
with the merger  consists of  $16,000,000 in cash and shares of our common stock
having a value of $16,000,000  based on the average  closing price of our common
stock during the 10-day trading period immediately  preceding the effective time
of the merger  (collectively  the "Merger  Consideration").  Each stockholder of
Long  Rap  will  receive  its   proportionate   share  of  the  cash  and  stock
consideration payable under the merger agreement as Merger Consideration,  based
on such  stockholder's  percentage  ownership of Long Rap's outstanding  capital
stock.

         Notwithstanding  the above,  the aggregate  share portion of the Merger
Consideration (the "Share Consideration") to be issued at the closing will in no
event represent in excess of 19.99% of our voting power outstanding  immediately
prior to the effective time of the merger, or otherwise equal a number of shares
of our  common  stock in excess of 19.99% of the  number of shares of our common
stock issued and  outstanding  immediately  prior to the  effective  time of the
merger.  If, as a result  of the  foregoing  limitation,  the value of the Share
Consideration to be issued at the closing is less than $16,000,000, then we will
pay the difference, i.e., $16,000,000 less the value of the Share Consideration,
in cash,  provided  that  such  cash  payment  does  not  adversely  affect  the
determination  of the merger as a  "reorganization"  under Section 368(a) of the
Code.  In  the  event  that  any  such  payment  would   adversely   affect  the
determination  of the Merger as a  "reorganization"  under Section 368(a) of the
Code,  then  the  Merger  shall  be  abandoned  and the  Merger  Agreement  will
terminate.

         At the effective time of the merger,  the articles of incorporation and
bylaws of LR Acquisition will be the articles of incorporation and bylaws of the
surviving company, except that such articles of incorporation will be amended to
change the name of the surviving  company to "Long Rap,  Inc." Each  outstanding
share of the  capital  stock of Long Rap  will be  converted  into the  right to
receive a proportionate share of the Merger  Consideration,  and each issued and
outstanding  share of the common stock of LR Acquisition  will remain issued and
outstanding   and  shall   represent   one  validly   issued,   fully  paid  and
non-assessable  share of the common stock of the surviving  company.  The merger
will become  effective upon the filing and acceptance of articles of merger with
the Department of Consumer and Regulatory Affairs of the District of Columbia in
accordance with the District of Columbia Business Corporation Act.

         The consummation of the merger is conditioned on, among other customary
requirements, the registration of the shares of our common stock to be issued as
Merger  Consideration  to holders of outstanding  shares of the capital stock of
Long Rap, our  completion of due diligence of Long Rap, the delivery by Long Rap
of the audited  financial  statements  of Long Rap, and our  obtaining  adequate
financing  to fund the cash portion of the Merger  Consideration  payable to the
stockholders  of Long Rap  under the  Merger  Agreement  and to obtain  adequate
working capital to fund both our and Long Rap's operations post-merger.


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         At the  effective  time of the merger,  we will  deposit into an escrow
fund a portion of the Merger  Consideration  equal to $1,000,000 and a number of
shares of our common  stock having a value of  $1,000,000  (based on the average
closing price of our common stock during the 10-day trading  period  immediately
preceding the effective  time of the merger) as security for claims for which we
may seek indemnification under the Merger Agreement.

         Each of Long Rap's  stockholders  agreed to execute a lock-up agreement
at the closing of the merger pursuant to which each such  stockholder will agree
not to offer,  sell,  assign,  transfer,  pledge or  otherwise  dispose  of such
stockholder's  shares of our common stock acquired as Merger Consideration for a
period of 24 months after the  effective  time of the merger except for the sale
or transfer  of up to 50,000  shares of our common  stock in each 90-day  period
after the first anniversary of the effective time of the merger, the transfer of
up to 125,000 shares per stockholder to specified advisors and employees of Long
Rap, and the transfer of shares of our common  stock to family  members,  trusts
and other entities for estate planning purposes.

         We agreed to  indemnify  Long Rap's  stockholders  and  certain of Long
Rap's  affiliates  against damages  incurred by or asserted against such parties
based  upon or  resulting  from (i)  taxes for which  certain  liabilities  were
accrued  or  reserved  as of  April  30,  2006 and  taxes  accrued  or  reserved
subsequent  to such date in the ordinary  course of  business,  (ii) third party
claims  relating to any  liability or obligation of Long Rap accrued or reserved
as of April 30,  2006 or  accrued  or  reserved  subsequent  to such date in the
ordinary course of business (other than specified  liabilities disclosed to us),
(iii) any liability or  obligation of a stockholder  as a guarantor or surety as
to payment or performance of Long Rap's  obligations  under its existing  credit
facility  or any  other  guaranty  liability  or  obligation  set  forth  in the
applicable  section  of Long  Rap's  disclosure  letter,  and (iv) any breach or
inaccuracy of any representation,  warranty or covenant made by us in the Merger
Agreement and exhibits and schedules  thereto,  and any cost or expense  related
thereto, for all amounts in excess of $200,000.

         Our aggregate  liability for losses incurred under the Merger Agreement
is  $500,000,  except  (i) with  respect  to any  breach of our  representations
regarding the valid issuance of shares to be issued as Merger  Consideration  or
our authority to consummate  the merger,  which results in the forfeiture of any
of the Merger Consideration  received by Long Rap's stockholders,  in which case
our aggregate  liability shall be limited to the amount of Merger  Consideration
forfeited  plus  reasonable  costs  and  expenses,   or  (ii)  breaches  of  our
representations   regarding  our  filings  with  the   Securities  and  Exchange
Commission and financial  statements,  in which case our aggregate liability for
losses shall be $5,400,000  less the aggregate value of the shares of our common
stock issued in the merger based on a formula specified in the Merger Agreement.
These  limitations  are not  applicable in instances of fraud on our part or for
losses in connection  with taxes,  third party claims or guarantees for which we
have agreed to indemnify Long Rap's stockholders.

         Long Rap's  stockholders  agreed to indemnify us, the surviving company
and certain of our affiliates  against damages  incurred or asserted against us,
the surviving company or certain of our affiliates based upon or resulting from:
(i) taxes (except taxes for which certain  liabilities  were accrued or reserved
as of April 30, 2006,  and taxes accrued or reserved  subsequent to such date in
the ordinary course of business) owed prior to the effective date of the merger,
(ii) third party  claims  against  Long Rap or the  surviving  company,  whether
arising  before or after the effective  time of the merger but related solely to
facts,  events or  circumstances  in  existence  or occurring on or prior to the
effective  time of the merger  (except to the extent  accrued or  reserved as of
April 30, 2006 or accrued or reserved  subsequent  to such date in the  ordinary
course of business),  and (iii) any breach or inaccuracy of any  representation,
warranty or covenant  made by Long Rap in the Merger  Agreement and exhibits and
schedules thereto,  and any cost or expense related thereto,  for all amounts in
excess of $200,000.


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         Each  stockholder's  aggregate  liability for losses incurred under the
Merger Agreement is $1.8 million  (inclusive of 1/3 of the portion of the Merger
Consideration deposited into the escrow account),  except with respect to losses
arising   from  any  breach  of  Long  Rap's   representations   regarding   its
capitalization  or  authority  to  consummate  the  merger,  in which  case each
stockholder's  aggregate  liability  will not  exceed  the  value of the  Merger
Consideration received by such stockholder. These limitations are not applicable
in  instances  of  fraud  by  Long  Rap or its  stockholders  or for  losses  in
connection  with taxes or third party  claims for which Long Rap's  stockholders
have agreed to indemnify us.

         We may terminate the Merger  Agreement  with Long Rap's mutual  written
consent  provided that such  termination is authorized by our board of directors
and Long Rap's board of directors.  The Merger  Agreement may also be terminated
by us or Long Rap if:  the  closing  of the  merger  does not occur on or before
September 30, 2006; any permanent  injunction or other order of a court or other
competent  government  entity  preventing the consummation of the merger becomes
final and  non-appealable;  or it is  determined  by tax counsel that the merger
will not  qualify  as a  reorganization  under  Section  368(a) of the  Internal
Revenue Code of 1986, as amended.  We may terminate the Merger Agreement if Long
Rap breaches,  which breach remains uncured for 10 days after receipt of written
notice from us of such  breach,  any  representations,  warranties  or covenants
contained in the Merger Agreement that would result in the failure of any of the
conditions  to the  closing of the  merger  set forth in the  Merger  Agreement,
provided that we are not in material  breach of the Merger  Agreement.  Long Rap
may terminate the Merger  Agreement if we breach,  which breach remains  uncured
for 10 days after  receipt of written  notice from Long Rap of such breach,  any
representations,  warranties or covenants contained in the Merger Agreement that
would  result in the  failure  of any of the  conditions  to the  closing of the
merger  set  forth in the  Merger  Agreement,  provided  that Long Rap is not in
material breach of the Merger  Agreement.  In certain  termination  events,  the
terminating  party may be entitled to a termination  fee equal to $50,000 (plus,
with  respect to us,  one-half  of Long  Rap's  audit  expenses  in the event we
terminate or the deal does not close due to reasons other than Long Rap's or its
stockholders' breach), or additionally in our case, if we terminate because Long
Rap  or  its  stockholders  breach  their  obligations  with  respect  to  other
proposals, or as a result of their refusal to consummate the merger, we would be
entitled to a termination fee equal to $300,000.

         During  the  period  from the date of the  Merger  Agreement  until the
earlier of the termination of the Merger  Agreement or the effective time of the
merger,  Long Rap has  covenanted to conduct its business in the usual,  regular
and ordinary course in substantially the same manner as previously conducted and
not to solicit,  accept or participate in discussions  regarding any proposal or
offer from any person relating to a possible acquisition transaction.

         Other than in respect of the Merger Agreement, the parties thereto have
no material relationship.

         On June 20, 2006, we issued a press release announcing the execution of
the Merger  Agreement.  The press release is attached to this Current  Report on
Form 8-K as Exhibit 99.1 and is incorporated herein by reference.


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ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.

         (a)      FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.

         (b)      PRO FORMA FINANCIAL INFORMATION. Not applicable.

         (c)      SHELL COMPANY TRANSACTIONS. Not applicable

         (d)      EXHIBITS.

                  10.1     Agreement  and Plan of  Merger  dated  June 19,  2006
                           among   Blue    Holdings,    Inc.,   LR   Acquisition
                           Corporation, Long Rap, Inc., the stockholders of Long
                           Rap and Charles Rendelman.

                  99.1     Press  Release  issued by the  Registrant on June 20,
                           2006.


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                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
Blue  Holdings,  Inc.  has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

                                      BLUE HOLDINGS, INC.


Date:  June 23, 2006                  By:  /S/ PATRICK CHOW
                                           -------------------------------------
                                           Patrick Chow, Chief Financial Officer
                                           and Secretary


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                                  EXHIBIT INDEX


EXHIBIT NUMBER                     DESCRIPTION OF EXHIBIT
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     10.1         Agreement  and Plan of Merger  dated June 19,  2006 among Blue
                  Holdings,  Inc., LR Acquisition  Corporation,  Long Rap, Inc.,
                  the stockholders of Long Rap and Charles Rendelman.

     99.1         Press Release issued by the Registrant on June 20, 2006.


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