BLUE HOLDINGS, INC.
                                                          

                                                FILED PURSUANT TO RULE 424(b)(3)
                                                     REGISTRATION NO. 333-128288
 

                           PROSPECTUS SUPPLEMENT NO. 4
                    (TO PROSPECTUS DATED SEPTEMBER 28, 2005)
 
         This is a prospectus  supplement to our prospectus  dated September 28,
2005 relating to the resale from time to time by selling  shareholders  of up to
25,284,657  shares of our Common  Stock.  On January 6, 2006,  we filed with the
Securities  and Exchange  Commission an amendment to the Current  Report on Form
8-K, originally filed with the Securities and Exchange Commission on November 4,
2005. The text of the amendment to the Current Report on Form 8-K is attached to
and made a part of this prospectus supplement.

         This  prospectus  supplement  should  be read in  conjunction  with the
prospectus and any prior prospectus supplements,  and this prospectus supplement
is  qualified  by  reference  to  the  prospectus   and  any  prior   prospectus
supplements,  except  to the  extent  that  the  information  provided  by  this
prospectus  supplement supersedes the information contained in the prospectus or
any prior prospectus supplement.

                                     EXPERTS

         The  financial  statements  of Taverniti So Jeans,  LLC (A  Development
Stage  Company) as of December  31, 2004 and for the period  September  13, 2004
(Inception)  to December  31,  2004,  included in this  prospectus  have been so
included  in  reliance  on  the  report  of  Katz  &  Varon,   Certified  Public
Accountants,  given on the  authority  of said firm as experts in  auditing  and
accounting.  The financial  statements of Taverniti So Jeans, LLC (A Development
Stage  Company) as of  September  30, 2005 and for the nine month  period  ended
September  30,  2005,  included  in this  prospectus  have been so  included  in
reliance on the review report of Weinberg & Co.,  P.A.,  independent  registered
accountants,  given on the  authority  of said firm as experts in  auditing  and
accounting.


         THE SECURITIES OFFERED BY THE PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD  CAREFULLY  CONSIDER THE "RISK  FACTORS"  REFERENCED ON PAGE 3 OF THE
PROSPECTUS IN DETERMINING WHETHER TO PURCHASE THE COMMON STOCK.
 
 
 
           THE DATE OF THIS PROSPECTUS SUPPLEMENT IS JANUARY 6, 2006.





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

                                   FORM 8-K/A

                                 AMENDMENT NO. 1

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

                                 DATE OF REPORT:
                        (Date of earliest event reported)
                                OCTOBER 31, 2005 

                               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)



                           MARINE JET TECHNOLOGY CORP.
                       936A BEACHLAND BOULEVARD, SUITE 13
                              VERO BEACH, FL 32963
          (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))





         This Current  Report on Form 8-K/A amends Items  9.01(a) and 9.01(b) of
the  Registrant's  Current  Report on Form 8-K dated October 31, 2005, and filed
with the Securities and Exchange  Commission on November 4, 2005,  regarding the
closing of the transactions  contemplated by a certain Exchange  Agreement dated
October 31, 2005, by and among the Registrant,  Taverniti So Jeans, LLC, and the
members of Taverniti So Jeans,  LLC set forth therein.  The sole purpose of this
amendment  is to  provide  the  audited  financial  statements  of the  business
acquired as of, and for, the fiscal year ended  December 31, 2004, and unaudited
financial  statements  of the business  acquired as of, and for, the  nine-month
period ended September 30, 2005, as required by Item 9.01(a),  and the unaudited
pro forma  balance  sheet as of September  30,  2005,  and  unaudited  pro forma
statements of operations for the nine-month  period ended September 30, 2005 and
for the period from  inception  (September  13, 2004) to December  31, 2004,  as
required by Item 9.01(b),  which  financial  statements  and unaudited pro forma
financial information were excluded from the original Current Report on Form 8-K
in reliance on Items 9.01(a)(4) and 9.01(b)(2), respectively, of Form 8-K.


ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS.

(a)      Financial statements of business acquired.

         Audited Financial  Statements of Taverniti So Jeans, LLC as of December
31,  2004,  and for the period  from  inception  (September  13,  2004)  through
December 31, 2004.


                                       2



                          INDEPENDENT AUDITOR'S REPORT



To the Members
TAVERNITI SO JEANS, LLC
(A DEVELOPMENT STAGE COMPANY)
Commerce, California


    We have audited the accompanying balance sheet of TAVERNITI SO JEANS, LLC (A
DEVELOPMENT STAGE COMPANY) as of December 31, 2004 and the related statements of
operations and members' deficit,  and of cash flows for the period September 13,
2004,  (Inception)  to December 31, 2004.  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 audit in  accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  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 TAVERNITI SO JEANS, LLC (A
DEVELOPMENT  STAGE  COMPANY) as of  December  31,  2004,  and the results of its
operations and its cash flows for the period September 13, 2004,  (Inception) to
December 31, 2004 in conformity with accounting principles generally accepted in
the United States of America.



                                  /s/ Katz & Varon
                                  --------------------
                                      KATZ & VARON

Los Angeles, California
October 19, 2005


                                       3



TAVERNITI SO JEANS, LLC
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
December 31, 2004


                               ASSETS

CURRENT ASSETS:
  Cash ........................................................       $  10,812
   Inventories ................................................         130,431
   Advance Payment of Royalties ...............................         117,000
   Prepaid Expenses and Other Current Assets ..................           6,500
                                                                      ---------

      Total Current Assets ....................................         264,743

Property and Equipment - at cost less
  Accumulated Depreciation ....................................           6,880
                                                                      ---------

TOTAL ASSETS ..................................................       $ 271,623
                                                                      =========

                 LIABILITIES AND MEMBERS' DEFICIT

CURRENT LIABILITIES:
   Accounts Payable ...........................................       $  63,958
   Due to Customers ...........................................          13,434
   Due to Members .............................................         329,375
   State Income Tax Payable ...................................             800
   Accrued Expenses and Other Current Liabilities .............           7,640
                                                                      ---------

      Total Current Liabilities ...............................         415,207

Members' Deficit ..............................................        (143,584)
                                                                      ---------

TOTAL LIABILITIES AND MEMBERS' DEFICIT ........................       $ 271,623
                                                                      =========


                                       4



TAVERNITI SO JEANS, LLC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND MEMBERS' DEFICIT
FOR THE PERIOD SEPTEMBER 13, 2004 (INCEPTION) TO DECEMBER 31, 2004


NET SALES .......................................................     $    --
                                                                      ---------

COST OF GOODS SOLD
   Purchases - Piece Goods ......................................        42,007
             - Trims ............................................        42,646
   Freight-in and duties ........................................        13,628
   Contract Labor ...............................................        32,150
                                                                      ---------

   Cost of Goods Available For Sale .............................       130,431

   Less: Inventories At the End of Period .......................      (130,431)
                                                                      ---------

COST OF GOODS SOLD ..............................................          --
                                                                      ---------
GROSS PROFIT ....................................................          --
                                                                      ---------
OPERATING EXPENSES ..............................................       242,784
                                                                      ---------

LOSS FROM OPERATIONS BEFORE PROVISION FOR STATE INCOME TAX ......      (242,784)

PROVISION FOR STATE INCOME TAXES ................................           800
                                                                      ---------

NET LOSS ........................................................      (243,584)

MEMBERS' CONTRIBUTIONS ..........................................       100,000
                                                                      ---------

MEMBERS' DEFICIT AT END OF PERIOD ...............................     $(143,584)
                                                                      =========


                                       5



TAVERNITI SO JEANS, LLC
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD SEPTEMBER 13, 2004 (INCEPTION) TO DECEMBER 31, 2004


CASH FLOWS FROM OPERATING ACTIVITIES:
   Net (Loss) ...................................................     $(243,584)
   Adjustments to Reconcile Net Loss to Net Cash used by
   Operating Activities:
     Depreciation ...............................................           765
     Allocated Expenses .........................................       130,903
   CHANGES IN ASSETS AND LIABILITIES:
     Merchandise Inventory ......................................      (130,431)
     Other Current Assets .......................................        (6,500)
     Accounts Payable ...........................................        63,958
     Other Current Liabilities ..................................        21,874
                                                                      ---------

   Net Cash used by Operating Activities ........................      (163,015)

CASH FLOWS FROM INVESTING ACTIVITIES:
     Advance Payment of Royalties ...............................      (117,000)
     Acquisitions of Property and Equipment .....................        (7,645)
                                                                      ---------

   Net Cash used by Investing Activities ........................      (124,645)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Members' Capital Contributions .............................       100,000
     Due to Members .............................................       198,472
                                                                      ---------

   Net Cash used by Financing Activities ........................       298,472
                                                                      ---------

NET INCREASE IN CASH AND CASH AT END OF PERIOD ..................     $  10,812
                                                                      =========

SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITY:

   Allocated Expense included in Due to Members .................     $ 130,903
                                                                      =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   Cash Paid for Interest .......................................     $    --
                                                                      =========

   Cash Paid for Income Taxes ...................................     $    --
                                                                      =========


                                       6



                             TAVERNITI SO JEANS, LLC
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2004


NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS

       (a) ORGANIZATION:

           Taverniti So Jeans,  LLC ("the Company" or "Taverniti") was organized
as a California  limited liability company on September 13, 2004, under the laws
of the State of California. The Company commenced operations on the same day.

       (b) NATURE OF OPERATIONS/DEVELOPMENT STAGE:

           The Company is in the development  stage and operates  exclusively in
the  wholesale  apparel  industry.  Taverniti  designs,  develops,  markets  and
distributes  high fashion jeans and accessories  under the brand name "Taverniti
So Jeans." The Company's products include jeans,  jackets,  and knit sportswear.
Taverniti  will sell its products in the United  States,  Canada,  Japan and the
European  Union  directly  to  department   stores  and  boutiques  and  through
distribution  arrangements  in  certain  foreign  jurisdictions.   Taverniti  is
headquartered  in Commerce,  California and maintains  showrooms in New York and
Los Angeles.

NOTE 2 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) USE OF ESTIMATES:

           The preparation of financial statements in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America,  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and 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 these
estimates.

       (b) INVENTORY VALUATION:

           Inventories  are  stated  at the lower of cost  (first-in,  first-out
method) or market.

       (c) REVENUE RECOGNITION:

           Revenue will be recognized when merchandise is shipped to a customer,
based on agreed upon terms.  Revenue will be recorded net of estimated  returns,
chargebacks  and markdowns  based upon  management's  estimates  and  historical
experience.

       (d) ADVERTISING:

           Advertising   costs  are   expensed   as  of  the   first   date  the
advertisements  take place.  Advertising  expenses  included in selling expenses
aggregated $420.


                                       7



       (e) PROPERTY AND EQUIPMENT:

           Property and equipment is stated at cost. Depreciation is provided by
the straight-line method at rates calculated to amortize cost over the estimated
useful lives of the respective  assets.  Upon sale or retirement of such assets,
the related cost and accumulated  depreciation  are eliminated from the accounts
and gains or  losses  are  reflected  in  operations.  Repairs  and  maintenance
expenditures  not anticipated to extend asset lives are charged to operations as
incurred.

       (f) INCOME TAXES:

           The taxes on the income of a Limited  Liability  Company  are payable
individually  by each member.  The amount that might be withdrawn by the members
in order to pay such taxes will be determined as necessary and distributed  from
members equity.  The Company is subject to California  minimum tax of $800 and a
fee based on total annual revenue.

       (g) IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES:

           Long-lived  assets are reviewed  for  impairment  whenever  events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  Recoverability  of assets to be held and used is measured by a
comparison of the carrying  amount of an asset to the future cash flows expected
to be generated by the asset. If such assets are considered to be impaired,  the
impairment  to be  recognized  is measured  by the amount by which the  carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value, less costs to
sell.

       (h) CONCENTRATION OF CREDIT RISK:

           Financial  instruments,  which  potentially  expose the  Company to a
concentration  of credit risk,  will consist  primarily of cash,  trade accounts
receivable  and  amounts  due from  factor.  Concentration  of credit  risk with
respect  to trade  accounts  receivable  will be  limited  due to the  number of
customers comprising the Company's customer base and their dispersion throughout
the United  States,  Europe Union and Asia.  The Company  will extend  unsecured
credit to its customers in the normal course of business.

           The Company's  products will be primarily  sold to department  stores
and specialty retail stores.  These customers can be  significantly  affected by
changes  in  economic,  competitive  or other  factors.  The  Company  will make
substantial sales to a relatively few, large customers. In order to minimize the
risk of loss,  the  Company  will assign a certain  amount of domestic  accounts
receivable to a factor  without  recourse or require  letters of credit from its
customers  prior  to  the  shipment  of  goods.  For  non-factored  receivables,
account-monitoring  procedures  will be utilized  to minimize  the risk of loss.
Collateral will generally not be required.

       (i) MERCHANDISE RISK:

           The Company's  success will be largely  dependent upon its ability to
gauge the fashion tastes of its targeted consumers and provide  merchandise that
satisfies consumer demand. Any inability to provide  appropriate  merchandise in
sufficient quantities in a timely manner could have a material adverse effect on
the Company's business, operating results and financial condition.

       (j) ACCOUNTS RECEIVABLE - ALLOWANCE FOR RETURNS, DISCOUNTS AND BAD DEBTS:

           The Company will evaluate the  collectibility of accounts  receivable
and charge  backs  (disputes  from the  customer)  based upon a  combination  of
factors.  In circumstances  where the Company is aware of a specific  customer's
inability to meet its financial  obligations  (such as in the case of bankruptcy
filings or substantial  downgrading by credit  sources),  a specific reserve for
bad  debts  will be taken  against  amounts  due to  reduce  the net  recognized
receivable  to the amount  reasonably  expected to be  collected.  For all other
customers,  the Company will recognize  reserves for bad debts and uncollectible
chargebacks based on management's judgment.

           If  collection  experience   deteriorates  for  example,  due  to  an
unexpected  material  adverse change in a major  customer's  ability to meet its
financial  obligations to the Company,  the estimates of the  recoverability  of
amounts due could be reduced by a material amount.

       (k) SHIPPING AND HANDLING COSTS:

           Freight-out will be included in distribution expenses.


                                       8



NOTE 3 - DUE FROM FACTOR

           The  Company  will  use a  factor  for  working  capital  and  credit
administration purposes. Under the factoring agreement, the factor will purchase
a substantial  portion of the trade  accounts  receivable and assumes all credit
risk with respect to such approved accounts.

           The factor agreement, which terminates on November 22, 2005, provides
that the  Company  can  borrow an amount up to 85% of the value of its  approved
factored customer  invoices,  less a reserve of 15% of unpaid accounts purchased
and a reserve  of 100% of all such  accounts  which  are  disputed.  The  factor
commission is .8% of the customer  invoice amount for terms up to 90 days,  plus
one quarter of one percent (.25%) for each additional thirty-day term.

           Receivables sold in excess of maximums  established by the factor are
subject to recourse in the event of nonpayment  by the customer.  The Company is
contingently liable to the factor for merchandise disputes,  customer claims and
the like on receivables sold to the factor.

           To the  extent  that the  Company  draws  funds  prior to the  deemed
collection date of the accounts receivable sold to the factor,  interest will be
charged at the rate of 1% over the factor's prime lending rate per annum. Factor
advances  will  be  collateralized  by  the  non-factored  accounts  receivable,
inventories, the personal guarantee of a member and a related party that is 100%
owned by two members of the Company.

NOTE 4 - INVENTORIES

           Inventories are summarized as follows:

            Raw materials ........................          $  9,299

            Work-in-process ......................           121,132
                                                            --------

                                                            $130,431
                                                            ========

NOTE 5 - PROPERTY AND EQUIPMENT

           Property and equipment is summarized as follows:

            Machinery and equipment ....................      $5,629

            Computer equipment .........................       2,016
                                                              ------

                                                               7,645

               Less: Accumulated depreciation ..........         765
                                                              ------

                                                              $6,880
                                                              ======

NOTE 6 - RELATED PARTY TRANSACTIONS

       (a) ALLOCATED EXPENSES:

           During the period  September  13, 2004,  (Inception)  to December 31,
2004,  the Company was allocated  $130,903 for certain  expenses  (consisting of
salaries,  payroll taxes, utilities,  common area services,  rent, insurance and
other office  services) from Blue Concept,  LLC, an entity that is 100% owned by
two members of the  Company.  These  amounts were for the benefit of the Company
and  are  included  in  operating  expenses  in the  accompanying  Statement  of
Operations.

       (b) TAVERNITI HOLDINGS, LLC:

           The following  transaction occurred between the Company and Taverniti
Holdings, LLC, which is 60% owned by a member of the Company:


                                       9



           A  member  of  the  Company  advanced  $117,000  as a  prepayment  of
royalties (see Note 10, Licensing Agreement).

NOTE 7 - MAJOR SUPPLIERS/CONTRACTOR

           For the period September 13, 2004,  (Inception) to December 31, 2004,
two suppliers comprised greater than 10% of the Company's piece goods purchases.
Purchases  from these  suppliers  approximated  $39,000 or 92.8% of gross  piece
goods purchases.

           For the period September 13, 2004,  (Inception) to December 31, 2004,
one  contractor  comprised  greater than 10% of the  Company's  contract  labor.
Contract labor costs from this contractor approximated $20,000 or 62.2% of gross
contract labor.

NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

           The carrying amounts of Cash, Accounts payable, Due to customers, Due
to  Member,  State  income  tax  payable,  Accrued  expenses  and other  current
liabilities approximate fair value because of the short maturity of these items.

NOTE 9 - MEMBERS' EQUITY

           The Company is a limited  liability  company;  therefore,  no member,
manager,  agent or employee of the Company is  personally  liable for the debts,
obligations, or liabilities of the Company, whether arising in contract, tort or
otherwise, or for the acts or omissions of any other member, director,  manager,
agent or employee of the Company,  unless the  individual  has signed a specific
personal guarantee.

           The Company was formed on September 13, 2004 with four  members,  two
of which have a 37.5% ownership interest,  and the other two members each having
a 12.5%  ownership  interest.  Member  contributions  in cash  were as  follows:
contributions  of $75,000 by the 37.5% members and  contributions  of $12,500 by
each 12.5% member.

           The members' equity account, as of December 31, 2004, was as follows:

            Contributions by 37.5% members - cash ....    $  75,000

            Contributions by 12.5% members ...........       25,000
                                                          ---------

                                                            100,000

               Less: Net loss ........................     (243,584)
                                                          ---------

               Total contributions ...................    $(143,584)
                                                          =========

           Net profits and losses are  allocated to the capital  account of each
member at the end of each accounting period as follows:

           Net profits are first allocated to the 37.5% members to the extent of
the amount by which the  cumulative  net losses  for the  current  and all prior
fiscal years of the Company  allocated to such members exceed the cumulative net
profits for the current and all prior fiscal  years of the Company  allocated to
such  members,  thereafter,  to all  12.5%  members,  in the  same  manner  that
allocations  of profits are made to the 37.5%  members and finally to members in
proportion to their respective negative capital accounts, if any.

NOTE 10 - LICENSING AGREEMENT

           The Company entered into a license agreement with Taverniti Holdings,
LLC to use a certain  trademark  worldwide to produce denim and knit  sportswear
for men and women.  The term of the  agreement  begins  June 1, 2004 and ends on
December 31, 2015.


                                       10



           Royalties are as follows:

            ANNUAL NET SALES                            ROYALTY PERCENTAGE
            ----------------                            ------------------

            First $3,000,000 each year of term                  8%

            Over $3,000,000 to $5,000,000                       7%

            Over $5,000,000 to $10,000,000                      6%

            Over $10,000,000                                    5%

           Royalties  accrue when the licensed  products are sold,  distributed,
billed/or  paid  whichever  occurs first.  "Net sales" means gross sales,  less:
discounts,  shown on invoices,  freight  charges and  allowances,  and bona fide
returns, providing such returns do not exceed 10% of gross sales.

           Royalties  payable  on  sales to  affiliates  are  calculated  on the
greater of (a) the highest  wholesale price licensee  receives from  independent
parties,  or (b) the invoice price at which licensed products are resold by such
individual or entity to an unrelated customer in an arms-length transaction.


                                       11



            Unaudited  Financial  Statements  of Taverniti  So Jeans,  LLC as of
September 30, 2005, and for the nine month period ended September 30, 2005.


                                TABLE OF CONTENTS




                                                                            Page
                                                                            ----


PART I     Financial Information


Item 1.    Financial Statements

                Independent Registered Public Accounting Firm's 
                   Review Report                                              13


                Balance Sheet (Unaudited)                                     14


                Statement of Operations (Unaudited)                           15


                Statement of Cash Flows (Unaudited)                           16


                Notes to the Financial Statements (Unaudited)              17-22


                                       12



                                     PART I



          Independent Registered Public Accounting Firm's Review Report



To the Members of Taverniti So Jeans, LLC



         We have reviewed the accompanying  balance sheet of Taverniti So Jeans,
LLC as of September 30, 2005 and the related  statements of operations  and cash
flows for the nine-month period then ended.  These interim financial  statements
are the responsibility of the Company's management.

         We conducted our review in accordance  with the standards of the Public
Company  Accounting  Oversight  Board  (United  States).  A  review  of  interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters. It
is  substantially  less in scope than an audit  conducted in accordance with the
standards of the Public Company  Accounting  Oversight  Board,  the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

         Based on our  review,  we are not aware of any  material  modifications
that should be made to the accompanying interim financial statements for them to
be in conformity with U.S. generally accepted accounting principles.


/s/ Weinberg & Company
----------------------
Weinberg & Company

Boca Raton, Florida
December 2, 2005


                                       13



PART I
FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

a.         BALANCE SHEET

                            TAVERNITI SO JEANS, LLC
                           BALANCE SHEET (UNAUDITED)
                               SEPTEMBER 30, 2005


                               ASSETS

CURRENT ASSETS:
   ACCOUNTS RECEIVABLE, NET OF RESERVES OF $70,000 ............       $  259,056
   DUE FROM RELATED PARTIES ...................................          211,507
   INVENTORIES, NET ...........................................        1,682,000
   PREPAID EXPENSES AND OTHER CURRENT ASSETS ..................            1,200
                                                                      ----------

      TOTAL CURRENT ASSETS ....................................        2,153,763

PROPERTY AND EQUIPMENT, NET OF ACCUMULATED
   DEPRECIATION OF $6,192 .....................................           60,611
                                                                      ----------

TOTAL ASSETS ..................................................       $2,214,374
                                                                      ==========

                    LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES:
   BANK OVERDRAFT .............................................       $   37,641
   ACCOUNTS PAYABLE ...........................................          497,310
   DUE TO FACTOR ..............................................          166,885
   DUE TO RELATED PARTIES .....................................        1,049,059
   ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES .............          191,199
                                                                      ----------

      TOTAL CURRENT LIABILITIES ...............................        1,942,094

      MEMBERS' EQUITY .........................................          272,280
                                                                      ----------

TOTAL LIABILITIES AND MEMBERS' EQUITY .........................       $2,214,374
                                                                      ==========

See Accountants' Review Report And Notes to Financial Statements


                                       14



                            TAVERNITI SO JEANS, LLC
                     STATEMENTS OF OPERATIONS (UNAUDITIED)


                                                                  For the period
                                                                   September 13,
                                                   For the nine         2004
                                                   months ended   (Inception) to
                                                   September 30,   September 30,
                                                        2005            2004
                                                     ----------      ----------

Net Sales .........................................  $4,003,692      $     --

Cost of Goods Sold ................................   1,924,751          15,256
                                                     ----------      ----------

Gross Profit (Loss) ...............................   2,078,941         (15,256)

Total Operating Expenses ..........................   1,662,277          74,273
                                                     ----------      ----------

Income (loss) before provision for income taxes ...     416,664         (89,529)

Provision for income taxes ........................         800            --
                                                     ----------      ----------

Net Income (Loss) .................................  $  415,864      $  (89,529)
                                                     ==========      ==========

See Accountants' Review Report And Notes to Financial Statements


                                       15



                            TAVERNITI SO JEANS, LLC
                      STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                  For the period
                                                                   September 13,
                                                   For the nine         2004
                                                   months ended   (Inception) to
                                                   September 30,   September 30,
                                                        2005            2004
                                                    -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) ................................   $   415,864    $   (89,529)
Adjustment to income not effecting use of cash
   Depreciation ..................................         5,427             91
Changes in assets and liabilities
   Accounts Receivable ...........................      (259,056)          --
   Advance payment of royalty ....................       117,000           --
   Inventories ...................................    (1,551,569)          --
   Prepaid Expenses and other current assets .....         5,300           --
   Accounts Payable ..............................       419,918             15
   Other Current Liabilities .....................       182,759           --
                                                     -----------    -----------
Net cash provided by operating activities ........      (664,357)       (89,423)
                                                     -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment .........................       (59,158)        (5,480)
                                                     -----------    -----------
   Net Cash used in investing activities .........       (59,158)        (5,480)
                                                     -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Due to factor .................................       166,885           --
   Bank overdraft ................................        37,641           --
   Due to related parties, net ...................       508,177         94,903
                                                     -----------    -----------
   Net Cash used in financing activities .........       712,703         94,903
                                                     -----------    -----------

Net Decrease in Cash .............................       (10,812)          --
Cash at the beginning of the period ..............        10,812         10,812
                                                     -----------    -----------

Cash, end of the period ..........................   $      --      $    10,812
                                                     ===========    ===========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW STATEMENT

Cash paid for income tax .........................   $       800    $      --
                                                     ===========    ===========

See Accountants' Review Report And Notes to Financial Statements


                                       16



TAVERNITI SO JEANS, LLC
NOTES TO FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2005 (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION, ORGANIZATION AND NATURE OF OPERATIONS

           The  interim   condensed   consolidated   financial   statements  are
unaudited,  but  in the  opinion  of  management  of the  Company,  contain  all
adjustments,  which include normal recurring  adjustments,  necessary to present
fairly the financial  position at September 30, 2005,  the results of operations
and cash flows for the nine months ended  September  30, 2005 and for the period
September 13, 2004 (Inception) to September 30, 2004.

           The  Company's  results  of  operations  for the  nine  months  ended
September 30, 2005 are not  necessarily  indicative of the results of operations
to be expected for the full fiscal year ending December 31, 2005.

       (a) ORGANIZATION:

           Taverniti So Jeans,  LLC ("the Company" or "Taverniti") was organized
as a California  limited liability company on September 13, 2004, under the laws
of the State of California. The Company commenced operations on the same day.

       (b) NATURE OF OPERATIONS:

           The Company operates  exclusively in the wholesale  apparel industry.
The Company  designs,  develops,  markets and distributes high fashion jeans and
accessories  under the brand name  "Taverniti So Jeans." The Company's  products
include  jeans,  jackets  and knit  sportswear.  Taverniti  currently  sells its
products in the United States,  Canada, Japan and the European Union directly to
department stores and boutiques and through distribution arrangements in certain
foreign  jurisdictions.  Taverniti is headquartered in Commerce,  California and
maintains showrooms in New York and Los Angeles.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       (a) USE OF ESTIMATES:

           The preparation of financial statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and 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 these
estimates.

       (b) INVENTORY VALUATION:

           Inventories  are  stated  at the lower of cost  (first-in,  first-out
method) or market.

       (c) REVENUE RECOGNITION:

           Revenue is  recognized  when  merchandise  is shipped to the customer
based upon agreed terms and is recorded net of estimated  returns,  charge backs
and markdowns based upon management's  estimates and historical  experience.  We
sometimes arrange, on behalf of manufacturers, for the purchase of fabric from a
single supplier.  We have the fabric shipped directly to the cutting factory and
invoice the factory for the  fabric.  The  factories  then pay us for the fabric
with offsets against the price of the finished goods.


                                       17



       (d) ADVERTISING:

           Advertising   costs  are   expensed   as  of  the   first   date  the
advertisements  take place.  Advertising  expenses  included in selling expenses
approximated $27,961for nine months ended September 30, 2005.

       (e) PROPERTY AND EQUIPMENT:

           Property and equipment is stated at cost. Depreciation is provided by
the straight-line method at rates calculated to amortize cost over the estimated
useful lives of the respective assets.

           Upon  sale or  retirement  of  such  assets,  the  related  cost  and
accumulated  depreciation  are eliminated  from the accounts and gains or losses
are  reflected  in  operations.   Repairs  and  maintenance   expenditures   not
anticipated to extend asset lives are charged to operations as incurred.

       (f) INCOME TAXES:

           The taxes on the income of a Limited  Liability  Company  are payable
  individually by each member. The amount that might be withdrawn by the members
  in order to pay such taxes will be  determined  as necessary  and  distributed
  from member's equity. The Company is subject to California minimum tax of $800
  and a fee based on total annual revenue.

       (g) IMPAIRMENT OF LONG-LIVED ASSETS AND INTANGIBLES:

           Long-lived  assets are reviewed  for  impairment  whenever  events or
changes in  circumstances  indicate that the carrying amount of an asset may not
be  recoverable.  Recoverability  of assets to be held and used is measured by a
comparison of the carrying  amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired,  the
impairment  to be  recognized  is measured  by the amount by which the  carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying  amount or fair value less costs to
sell.

       (h) CONCENTRATION OF CREDIT RISK:

           Financial  instruments,  which potentially expose us to concentration
of credit  risk,  consist  primarily of cash,  trade  accounts  receivable,  and
amounts due from our factor.  Concentration of credit risk with respect to trade
accounts  receivable  at  September  30,  2005 is  limited  due to the number of
customers comprising the Company's customer base and their dispersion throughout
the United States.  The Company extends unsecured credit to its customers in the
normal course of business.

           The Company's  cash balances on deposit with banks are  guaranteed by
the Federal  Deposit  Insurance  Corporation up to $100,000.  The Company may be
exposed  to risk for the  amounts  of funds  held in one bank in  excess  of the
insurance limit. In assessing the risk, the Company's policy is to maintain cash
balances with high quality financial institutions.

           The Company's products are primarily sold to specialty retail stores.
These  customers  can  be   significantly   affected  by  changes  in  economic,
competitive or other factors. In order to minimize the risk of loss, the Company
assigns  certain  amount of domestic  accounts  receivable  to a factor  without
recourse or requires  letters of credit from its customers prior to the shipment
of  goods.  For  non-factored  receivables,  account-monitoring  procedures  are
utilized to minimize the risk of loss.  Collateral is generally not required. No
single  customer  accounted  for more than 10% of total sales in the nine months
ended  September 30, 2005,  and only two customers  accounted for 9% in the nine
months ended September 30, 2005, of total sales.

       (i) MERCHANDISE RISK:

           The Company's  success is largely dependent upon its ability to gauge
the  fashion  tastes of its  targeted  consumers  and provide  merchandise  that
satisfies consumer demand. Any inability to provide  appropriate  merchandise in
sufficient quantities in a timely manner could have a material adverse effect on
the Company's business, operating results and financial condition.


                                       18



       (j) ACCOUNTS RECEIVABLE - ALLOWANCE FOR RETURNS, DISCOUNTS AND BAD DEBTS:

           The Company evaluates its ability to collect accounts  receivable and
the  circumstances  surrounding  chargebacks  (disputes from the customer) based
upon a combination of factors.  In circumstances where the Company is aware of a
specific customer's inability to meet its financial  obligations (such as in the
case of bankruptcy  filings or  substantial  downgrading by credit  sources),  a
specific  reserve for bad debts is taken  against  amounts due to reduce the net
recognized receivable to the amount reasonably expected to be collected. For all
other customers, the Company recognizes reserves for bad debts and uncollectible
chargebacks  based  on  its  historical  collection  experience.  If  collection
experience  deteriorates  (for example,  due to an unexpected  material  adverse
change in a major  customer's  ability to meet its financial  obligations to the
Company), the estimates of the recoverability of amounts due could be reduced by
a material amount.

       (k) SHIPPING AND HANDLING COSTS:

           Freight   charges  are   included  in   selling,   distribution   and
administrative  expenses in the statement of operations and approximated $40,920
for the nine months ended September 30, 2005.

NOTE 3 - DUE FROM FACTOR

           The   Company   uses  a  factor  for   working   capital  and  credit
administration  purposes.  Under the factoring agreement, the factor purchases a
substantial portion of the trade accounts receivable and assumes all credit risk
with respect to such accounts.  The factor  agreement  provides that the Company
can borrow an amount up to 85% of the value of its  approved  factored  customer
invoices,  less a reserve of 15% of unpaid  accounts  purchased  and 100% of all
such accounts which are disputed.

           As of  September  30,  2005,  the factor  holds  $745,803 of accounts
receivable  purchased  from us and has made  advances to us of $592,688  against
those  receivables  resulting  in a net  amount  due  to us  of $  153,115.  For
financial  statement  purposes,  this  amount has been  reduced by a reserve for
chargebacks  and other offsets of $320,000 for a net due to factor a $166,885 as
of  September  30,  2005.  The  amount of the  reserve  held by the  factor  was
approximately  $111,200.  The factor  commission is 0.8% of the customer invoice
amount for terms up to 90 days,  plus one quarter of one percent (.25%) for each
additional  thirty-day term.  Receivables sold in excess of maximums established
by the  factor  are  subject  to  recourse  in the  event of  nonpayment  by the
customer.  The  Company is  contingently  liable to the  factor for  merchandise
disputes,  customer claims and the like on receivables sold to the factor. Items
subject to recourse  approximated  $364,207 as of  September  30,  2005.  To the
extent that the Company draws funds prior to the deemed  collection  date of the
accounts  receivable  sold to the factor,  interest is charged at the rate of 1%
over  the  factor's   prime  lending  rate  per  annum.   Factor   advances  are
collateralized  by the  non-factored  accounts  receivable,  inventories and the
personal  guarantee  of  Paul  Guez,  our  Chairman,  Chief  Executive  Officer,
President and majority  shareholder,  and Blue Concept, LLC ("Blue Concept"),  a
company co-owned by Paul Guez and his spouse, Elizabeth Guez.

NOTE 4 - INVENTORIES

           Inventories at September 30, 2005 are summarized as follows:


            Raw Materials ......................          $   66,000
            Work-in-Process ....................             962,000
            Finished Goods .....................             654,000
                                                          ----------

                TOTAL ..........................          $1,682,000
                                                          ==========


                                       19



NOTE 5 - PROPERTY AND EQUIPMENT

           Property  and  equipment  at  September  30,  2005 is  summarized  as
follows:


            Machinery & Equipment .........................   $38,185
            Furniture .....................................     4,286
            Leasehold Improvements ........................    12,100
            Computer Equipment ............................    12,232
                                                              -------
                SUBTOTAL ..................................    66,803

            Less: Accumulated depreciation and Amortization     6,192
                                                              -------
                TOTAL .....................................   $60,611
                                                              =======


NOTE 6 - RELATED PARTY TRANSACTIONS

           During  the  nine  months  ended  September  30,  2005,  the  Company
reimbursed  $168,495 for certain  expenses  (consisting  of  salaries,  payroll,
taxes,  utilities,  common area  services,  rent,  insurance,  and other  office
services)  to Blue  Concept,  LLC, an entity that is co-owned by a member of the
Company.  These  amounts were for the benefit of the Company and are included in
operating expenses in the accompanying Statement of Operations.

           The Company also  purchased  fabric at cost from Blue Concept LLC  an
entity  co-owned by Paul and  Elizabeth  Guez,  the  Company's  Chairman,  Chief
Executive  Officer and  President,  and Chief  Operating  Officer,  respectively
(`Blue Concept') for $613,633 during the nine months ended September 30, 2005.

NOTE 7 - DUE FROM/TO AFFILIATES

           The Affiliates are all Limited Liability  Companies that are co-owned
by a Paul and Elizabeth  Guez who are husband and wife and own 37.5%  membership
interest  each of the Company.  All  non-trade-related  advances have since been
repaid. Trade-related outstanding follow regular payment terms as invoices.

NOTE 8 - MAJOR SUPPLIERS

           During  the  nine  months  ended  September  30,  2005,  3  suppliers
comprised  greater than 10% of the  Company's  purchases.  Purchases  from these
suppliers were 32%, 18% and 12%, respectively.

NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS

           The  carrying  amounts of cash,  due from related  parties,  accounts
receivable,  bank overdraft,  due to factor,  accounts  payable,  due to related
parties,  accrued expenses and other current liabilities  approximate fair value
because of the short maturity of these items.

NOTE 10 - OFF-BALANCE SHEET RISK

           Financial   instruments  that  potentially  subject  the  Company  to
off-balance sheet risk consist of factored accounts receivable.  As described in
Note 3, the Company  sells the majority of its trade  accounts  receivable  to a
factor and is  contingently  liable to the factor for  merchandise  disputes and
other  customer  claims.  The amount of total  factor  receivables  approximated
$745,803 as of September 30, 2005.


                                       20



NOTE 11 - MEMBERS' EQUITY

           The Company is a limited  liability  company;  therefore,  no member,
manager,  agent or employee of the Company is  personally  liable for the debts,
obligations, or liabilities of the Company, whether arising in contract, tort or
otherwise, or for the acts or omissions of any other member, director,  manager,
agent or employee of the Company,  unless the  individual  has signed a specific
personal guarantee.

           The Company was formed on September 13, 2004 with four  members,  two
of which have a 37.5% ownership interest and the other two members each having a
12.5%  ownership  interest.  Member  contributions  in  cash  were  as  follows:
contributions  of $75,000 by the 37.5% members and  contributions  of $12,500 by
each 12.5% member.

           The members' equity account is as follows:

            Initial Members' contribution .........................   $ 100,000

            Loss for the period ended December 31, 2004 ...........    (243,584)
                                                                      ---------

            Members' equity at January 1, 2005 ....................    (143,584)

            Net Income for the nine months ended September 30, 2005     415,864
                                                                      ---------

            Members' equity at September 30, 2005 .................   $ 272,280
                                                                      =========

           Net profits and losses are  allocated to the capital  account of each
  member at the end of each accounting period as follows:

                   Net profits are first  allocated to the 37.5%  members to the
  extent of the amount by which the  cumulative  net losses for the  current and
  all prior  fiscal years of the Company  allocated  to such members  exceed the
  cumulative  net  profits for the  current  and all prior  fiscal  years of the
  Company allocated to such members,  thereafter,  to all 12.5% members,  in the
  same manner  that  allocations  of profits  are made to the 37.5%  members and
  finally  to  members  in  proportion  to  their  respective  negative  capital
  accounts, if any.

NOTE 12 - COMMITMENTS

           The Company entered into a license agreement with Taverniti Holdings,
LLC to use a certain  trademark  worldwide to produce denim and knit  sportswear
for men and women.  The term of the  agreement  begins  June 1, 2004 and ends on
December 31, 2015.

           Royalties are as follows:

            ANNUAL NET SALES                         ROYALTY PERCENTAGE 
            ----------------                         ------------------ 

            First $3,000,000 each year of term                8%

            Over $3,000,000 to $5,000,000                     7%

            Over $5,000,000 to $10,000,000                    6%

            Over $10,000,000                                  5%

           Royalties  accrue when the licensed  products are sold,  distributed,
billed/or  paid  whichever  occurs first.  "Net sales" means gross sales,  less:
discounts,  shown on invoices,  freight  charges and  allowances,  and bona fide
returns, providing such returns do not exceed 10% of gross sales.


                                       21



           Royalties  payable  on  sales to  affiliates  are  calculated  on the
greater of (a) the highest  wholesale price licensee  receives from  independent
parties,  or (b) the invoice price at which licensed products are resold by such
individual  or entity to an unrelated  customer in an  arms-length  transaction.
Royalties  under the agreement for the nine months ended September 30, 2005 were
$303,629 and are included in the accompanying statement of operations.

NOTE 13 - SUBSEQUENT EVENTS

           On October 31, 2005, the Company  entered into an Exchange  Agreement
with Blue Holdings,  Inc.  (formerly  known as Marine Jet Technology  Corp.),  a
Company  controlled  by Mr.  Paul  Guez.  At  the  closing  of the  transactions
contemplated by the exchange  agreement,  Blue Holdings  acquired all the assets
and liabilities of Taverniti So Jeans LLC, which was 100% owned by Paul Guez and
his family in  consideration  for  $750,000 in cash and 500,000 in new shares in
common stock.  The exchange will be accounted  for by Blue  Holdings,  Inc. as a
combination of Companies under common control.


                                       22



(b)        Pro forma financial information.

           Unaudited Pro Forma Financial  Statements of Blue Holdings,  Inc. and
Taverniti So Jeans,  LLC as of September 30, 2005, and for the nine month period
ended  September 30 2005 and the period from  inception  (September 13, 2004) to
December 31, 2004.

           The pro-forma unaudited  financial  statements reflect the closing of
the exchange transaction of Blue Holdings,  Inc. with Taverniti So Jeans, LLC as
of September 30, 2005, for Balance Sheet purposes, and for the nine month period
ending  September  30, 2005 and the period  September  13, 2004  (Inception)  to
December 31, 2004 for Statements of Operations  purposes,  as if the closing had
occurred as of the date of inception. The unaudited pro-forma financial data and
the notes thereto should be read in conjunction  with each of  Registrant's  and
Taverniti So Jeans' historical  financial  statements.  The unaudited  pro-forma
financial  data is based upon certain  assumptions  and  estimates of management
that are subject to change. The unaudited  pro-forma financial data is presented
for illustrative  purposes only and is not necessarily  indicative of any future
results of  operations  or the results that might have  occurred if the exchange
transaction had actually occurred on the indicated date.


BLUE HOLDINGS INC. (FORMERLY KNOWN AS MARINE JET TECHNOLOGY CORP.) & SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 2005 


                      ASSETS
                                                          BLUE
                                                       HOLDINGS,     TAVERNITI,     PRO FORMA      PRO FORMA
Current Assets:                                           INC.          LLC.       ADJUSTMENTS    CONSOLIDATED
                                                      -----------   -----------    -----------    -----------
                                                                                              
   Cash ...........................................   $   489,423   $      --      $      --      $   489,423
   Due from Factor, net of reserves of $293,949 ...     1,932,527          --             --        1,932,527
   Accounts Receivable, net of reserves of $200,000       753,742       259,056           --        1,012,798
   Due from Related Parties .......................          --         211,507         (9,200)       202,307
   Inventories ....................................     6,474,070     1,682,000           --        8,156,070
   Prepaid Expenses and Other Current Assets ......       192,687         1,200           --          193,887
                                                      -----------   -----------    -----------    -----------
      Total Current Assets ........................     9,842,449     2,153,763         (9,200)    11,987,012

   Deferred Income Taxes ..........................       278,639          --             --          278,639
   Property and Equipment, Less Accumulated
      Depreciation ................................        63,186        60,611           --          123,797

Total Assets ......................................   $10,184,274   $ 2,214,374    $    (9,200)   $12,389,448
                                                      ===========   ===========    ===========    ===========

       LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

   Bank Overdraft .................................   $      --     $    37,641    $      --      $    37,641
   Accounts Payable ...............................     1,853,224       497,310           --        2,350,534
   Due to Factor ..................................          --         166,885           --          166,885
   Due to Related Parties .........................       492,472     1,049,059         (9,200)     1,532,331
   Income Taxes Payable ...........................     1,659,673          (800)          --        1,658,873
   Accrued Expenses and Other Current Liabilities .       608,492       191,999        750,000      1,550,491
                                                      -----------   -----------    -----------    -----------
      Total Current Liabilities ...................     4,613,861     1,942,094        740,800      7,296,755
                                                      -----------   -----------    -----------    -----------

Stockholders' Equity

   Members' Equity ................................          --         272,280       (272,280)          --
   Common Stock $0.001 par value
     Authorized 75,000,000 shares
     Issued and outstanding 26,057,200 shares .....        25,557          --              500         26,057
   Additional Paid-in Capital .....................     3,209,070          --         (650,500)     2,558,570
   Retained Earnings ..............................     2,335,786          --          172,280      2,508,066
                                                      -----------   -----------    -----------    -----------
      Total Stockholders' Equity ..................     5,570,413       272,280       (750,000)     5,092,693
                                                      -----------   -----------    -----------    -----------

Total Liabilities and Stockholders' Equity ........   $10,184,274   $ 2,214,374    $    (9,200)   $12,389,448
                                                      ===========   ===========    ===========    ===========



                                       23



Note (A)   The  consolidated  Balance Sheet includes the accounts of the Company
           and its wholly owned subsidiary,  Taverniti So Jeans, LLC. On October
           31,  2005,  the  Company  entered  into an  exchange  agreement  with
           Taverniti  and all its members to acquire the business and all assets
           and liabilities in consideration for $750,000 in cash and 500,000 new
           share of common  stock.  Taverniti was owned by Mr. Paul Guez and his
           immediate   family   members.   Mr.  Guez  is  also  the  controlling
           shareholder  of the company.  As such, the exchange will be accounted
           for as a  combination  of  entities  under  common  control  and  the
           $750,000 will be reflected as a deemed  distribution  to Mr. Guez and
           family members.

Note (B)   At the closing, initial Members' contribution of Taverniti,  $100,000
           will be  reclassed  to  additional  paid-in-capital,  and $172,280 of
           accumulated earnings will be reclassed to retained earnings.


BLUE HOLDINGS, INC. AND SUBSIDIARY
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2005



                                                           TAVERNITI 
                                               BLUE        SO JEANS,      PRO FORMA
                                           HOLDINGS INC.      LLC.      CONSOLIDATED
                                            -----------   -----------   -----------
                                                                       
Net sales ...............................   $20,575,044   $ 4,003,692   $24,578,736

Cost of goods sold ......................    10,431,204     1,924,751    12,355,955
                                            -----------   -----------   -----------

Gross profit ............................    10,143,840     2,078,941    12,222,781

Selling, distribution & administrative
   expenses .............................     4,772,569     1,662,277     6,434,846
                                            -----------   -----------   -----------

Income before expenses relating to
   exchange transaction and provision for
   income taxes .........................     5,371,271       416,664     5,787,935

Expenses relating to exchange transaction       527,617          --         527,617
                                            -----------   -----------   -----------

Income before provision for income taxes      4,843,654       416,664     5,260,318
                                            -----------   -----------   -----------

Provision for income taxes ..............     1,376,114           800     1,376,914
                                            -----------   -----------   -----------

Net income ..............................   $ 3,467,540   $   415,864   $ 3,883,404
                                            ===========   ===========   ===========

Basic and diluted earnings per share ....                               $      0.15
                                                                        ===========

Basic and diluted weighted average shares                                26,057,200
                                                                        ===========



Note: The Consolidated Proforma Statement of Operations includes the accounts of
      the Company and its wholly owned subsidiary, Taverniti So Jeans, LLC.


                                       24




BLUE HOLDINGS, INC. AND SUBSIDIARY
PRO FORMA STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE PERIOD SEPTEMBER 13, 2004 (INCEPTION) TO DECEMBER 31, 2004


                                             BLUE
                                           HOLDINGS,     TAVERNITI,     PRO FORMA
                                             INC.           LLC.       CONSOLIDATED
                                         (Unaudited)     (Audited)
                                         -----------    -----------    -----------
                                                                      
Net sales ............................   $   365,290    $      --      $   365,290

Cost of goods sold ...................       157,545           --          157,545
                                         -----------    -----------    -----------

Gross profit .........................       207,745           --          207,745

Selling, distribution & administrative
   expenses ..........................     1,338,697        242,784      1,581,481
                                         -----------    -----------    -----------

Loss before provision for income taxes    (1,130,952)      (242,784)    (1,373,736)

Provision for income taxes ...........           800            800          1,600
                                         -----------    -----------    -----------

Net loss .............................   $(1,131,752)   $  (243,584)   $(1,375,336)
                                         ===========    ===========    ===========

Basic and diluted earnings per share .                                 $     (0.05)
                                                                       ===========

Basic and diluted average shares .....                                  26,057,200
                                                                       ===========


See Notes to Condensed Consolidated Financial Statements

Note: The Consolidated Proforma Statement of Operations includes the accounts of
      the Company and its wholly owned subsidiary, Taverniti So Jeans, LLC.


                                       25



                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                      BLUE HOLDINGS, INC.



Date: January 6, 2006                 By:  /S/ PATRICK CHOW      
                                           -------------------------------------
                                           Patrick Chow
                                           Chief Financial Officer and Secretary


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