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)

~~September~~February 2313, ~~2008~~2009

___________________________________

Blue Holdings, Inc.

(Exact name of registrant as specified in charter)

Nevada

(State or other Jurisdiction of Incorporation or Organization)

000-33297

(Commission File Number)

88-0450923

(IRS Employer Identification No.)

4901 Zambrano Street,

Commerce, CA 90040

(Address of Principal Executive Offices and zip code)

(323) 726-0297

(Registrant’s telephone

number, including area code)

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

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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

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

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

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Information included in this Current Report on Form 8-K may contain statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended. Those statements include statements regarding our intent, belief or current expectations. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Such risks and uncertainties include, among other things, our ability to face stiff competition, our ability to profitably manage our business, the financial strength of our customers, the continued acceptance of our existing and new products by our existing and new customers, the risks of foreign manufacturing, competitive and economic factors in the textile and apparel markets, the availability of raw materials, the ability to manage growth, weather-related delays, dependence on key personnel, general economic conditions, global manufacturing costs and restrictions, and other risks and uncertainties that may be detailed herein, or from time to time in our other filings made with the Securities and Exchange Commission.

Item 1.01

Entry into a Material Definitive Agreement.

~~Item~~As reported 2in its Current Report on Form 8-K filed on November 4, 2008, effective October 31, 2008, Blue Holdings, Inc.03 ~~Creation~~(the of“Registrant”) entered into a ~~Direct~~Joint Venture ~~Financial~~Agreement ~~Obligation~~with orHeadgear, anInc. ~~Obligation~~pursuant ~~under~~to anwhich ~~Off-Balance~~the ~~Sheet~~Registrant ~~Arrangement~~and Headgear offormed a limited liability company named “Blue Holdings Headgear JV LLC” (the “JV”) to act as the distributor of the Registrant’s apparel lines within the United States.

~~Item~~On February 313, 2009, the Registrant and Headgear entered into a JV Modification Memo (“Memo”) wherein they agreed to amend the original agreement in certain respects, described below.02 ~~Unregistered~~The ~~Sales~~modifications to be effectuated by the Memo are subject to the approval of ~~Equity~~the ~~Securities~~Registrant’s factor, FTC Commercial Corp. (“FTC”), and Gemini Master Fund, Ltd. (“Gemini”). Specifically, the Memo provides that:

On September 23, 2008, the Registrant entered into a Settlement Agreement and Mutual Release with Paul Guez, Elizabeth Guez and their affiliated entities pursuant to which the Registrant rescinded the conversion on March 5, 2008 of $1~~,400,000 of indebtedness under a line of credit agreement with Mr~~. ~~Guez~~The ~~(the~~JV ~~“Revolving~~will ~~Line”)~~be ~~into 1,750,000 shares of~~ the ~~Registrant’s~~operating ~~common~~company ~~stock,~~50% ~~Mr.~~owned ~~Guez~~by ~~forgave~~each ~~$700,000~~ of ~~indebtedness~~ ~~under~~ the ~~Revolving Line, the~~ Registrant ~~issued an 8% Senior Secured Convertible Note with a 30-month term to Mr. Guez~~ and ~~Elizabeth~~Headgear ~~Guez in the principal amount of approximately $1,618,093 (the “Note”) in settlement of all amounts owed to Mr. Guez~~ and ~~his~~that ~~affiliates as of September 23, 2007 (other than certain amounts outside of~~ the ~~Revolving~~Registrant ~~Line~~will ~~accrued~~not ~~during~~provide ~~fiscal~~any ~~2008~~goods ~~and~~or ~~set~~services ~~forth in the Settlement Agreement and Mutual Release), the Registrant issued a Warrant~~ to ~~Mr. Guez to purchase 1,415,832 shares of~~ the ~~Registrant’s~~ ~~common stock at a per share exercise price of $0~~JV.~~40 and a term of 5 years (the “Warrant”), and the Registrant and Mr. Guez mutually release each other from existing claims.~~

2. The ~~Note carries~~ ~~interest~~JV atwill 8%source, ~~per~~acquire ~~annum~~and onfinance ~~the~~new ~~unpaid/unconverted~~inventory. ~~principal~~Twenty ~~balance, and~~percent isof ~~secured~~the oncost aof ~~third~~the ~~priority~~newly ~~basis~~purchased ~~against~~inventories ~~all~~will ofbe ~~the~~loaned ~~assets~~by of the ~~Registrant.~~ ~~One-twenty-fourth~~JV ofto the ~~principal~~Registrant ~~amount~~but ofpaid ~~the~~directly ~~Note,~~to ~~and~~the ~~accrued but~~Registrant’s ~~unpaid interest~~creditors, ~~are~~including ~~due~~FTC, Gemini and ~~payable~~trade ~~monthly~~creditors, inas 24selected ~~installments~~by ~~beginning on April~~the ~~1, 2009~~JV. ~~These~~All ~~installment~~loans ~~payments~~to ~~can~~the beRegistrant ~~made~~from inthe ~~cash~~JV orwill ~~through~~bear the ~~issuance~~ ofsame ~~stock~~interest ~~provided~~rate that ~~certain~~the ~~equity~~JV ~~conditions~~pays ~~(as~~either ~~further~~to ~~set~~FTC ~~forth in~~or ~~the~~its ~~Note)~~other ~~are met~~lenders. The ~~Note~~JV iswill ~~convertible,~~act atas ~~the~~sales ~~option~~agent offor the ~~holder prior to~~sale ~~its maturity, into approximately 4,045,233 shares~~ of the Registrant’s ~~common stock (subject~~ available-to-sell ~~adjustment~~inventories, asin ~~provided~~process or in the ~~Note,~~finished ~~including~~goods ~~pursuant to economic anti-dilution adjustments)~~inventories, ~~based~~and onwill apay ~~conversion~~the ~~price~~proceeds ~~equal~~from tothe ~~$0.40 per~~sale ~~share.~~of ~~Additionally,~~those ~~beginning~~inventories ~~September~~to ~~23, 2010,~~ the Registrant’s ~~can require~~creditors, ~~the~~after ~~holder~~deducting toa ~~convert~~5.0% ~~the~~handling ~~Note~~fee ~~into~~and ~~shares~~actual ofsales ~~the~~commissions ~~Registrant’s~~paid. ~~common stock~~All ifaccounts ~~the~~sold ~~volume-weighted~~by ~~average~~the ~~price~~JV ~~(as~~will ~~determined~~become ~~pursuant~~accounts ~~to the Note)~~ of the ~~common~~JV. ~~stock~~The ~~for~~provisions ~~any~~of 20the ~~out~~original ofagreement 30related ~~consecutive~~to ~~trading~~purchases ~~days~~by ~~exceeds~~the ~~$0.80 and~~JV ~~certain~~from ~~equity~~the ~~conditions~~Registrant ~~(as~~are ~~further~~superseded ~~set~~by ~~forth~~the interms of the ~~Note) are met~~amendment.

3. The ~~Note and the~~ ~~Warrant~~JV ~~provide that~~will ifhire the Registrant has not obtained shareholder approval, the Registrant may not issue, upon conversion or exercise of the Note and the Warrant, as applicable, a number of shares of the Registrant’s common stock which, when aggregated with any ~~shares~~existing ofemployees ~~the Registrant’s common stock issued on or after September 23, 2008 and prior to expiration~~ of the ~~Warrant~~registrant ~~and the maturity of the Note (A) in connection with the conversion of the Note or~~ as ~~payment~~ ofit ~~principal,~~deems ~~interest~~necessary orfor ~~liquidated~~its ~~damages, and (B) in connection with the exercise of the Warrant, would exceed 19~~operations.~~99% of the number of shares of the Registrant’s common stock outstanding on September 23, 2008.~~

~~On July 30,~~4. ~~2008,~~The ~~the~~JV ~~Registrant~~will ~~obtained~~be ~~the~~responsible ~~written~~for ~~consent~~all ofoperations ~~holders~~necessary ofto adesign, ~~majority of~~source ~~the~~and ~~outstanding~~deliver ~~shares~~products to all existing credit worthy customers of the Registrant’s, ~~capital~~including ~~stock~~international sales. All royalties and license fees from sales (other than certain international sales) will belong to the ~~transactions contemplated~~JV, ~~under~~including royalties for products developed by the ~~Settlement~~JV ~~Agreement~~that ~~and~~are ~~Mutual~~not ~~Release~~denim jeans, and ~~intends to file~~the anJV ~~information~~will ~~statement~~have unrestricted ability to ~~effectuate~~license the ~~actions~~Registrant’s ~~approved~~products ~~therein~~and ~~in the future~~brands.

5. The ~~issuance~~ ofJV ~~the~~will ~~Note,~~have the ~~Warrant~~right ~~and the shares underlying the Note and the Warrant was intended~~ to beuse ~~exempt from registration under~~ the ~~Securities~~Registrant’s ~~Act pursuant~~Marina toDel ~~Section~~Rey, ~~4(2)~~California ~~thereof~~facility, ~~and~~which ~~Rule~~is ~~506~~owned ofby ~~Regulation~~Paul DGuez, asrent ~~promulgated by the~~free ~~SEC~~for ~~under~~one ~~the Securities Act~~year, asand ~~such~~if ~~securities~~the ~~were~~JV ~~and~~elects ~~will be issued~~ to ~~accredited~~ ~~investors~~use ~~and~~that ~~were~~facility ~~not~~thereafter, ~~originated~~at ~~through~~the ~~any~~prevailing ~~general~~market ~~solicitation or advertisement~~rental rate.

~~Item~~6. 8The Registrant’s brands, including Taverniti, Yanuk and Antik, will be deposited in escrow.01 ~~Other~~The ~~Events~~sales and profitability targets established in the original agreement for the 12 month period ended June 30, 2010, are amended so that the measuring period is the 12 month period ended December 31, 2010. If the sales and profitability “targets” specified in the original agreement are attained by December 31, 2010, the escrowed brands will be transferred to the JV for no additional consideration. All other shares required to be placed in escrow under the terms of the original agreement, as described below, shall remain unchanged. Upon attainment of the “targets” for sales and profitability by December 31, 2010, the escrowed shares will be transferred in accordance with the original agreement, as described below. The Taverniti label is owned 60.0% by Paul Guez and 40.0% by Jimmy Taverniti; however, Jimmy Taverniti has a 50.0% interest in the income (royalties) earned.

~~The registrant~~7. ~~intends~~When ~~to file restated financial statements on or before October 3, 2008 pursuant to an amendment to its Form 10-K for~~ the ~~fiscal~~escrow ~~year~~is ~~ended~~dissolved ~~December 31, 2007,~~ and ~~amendments to its Form 10-Qs for~~ the ~~fiscal~~“targets” ~~quarters~~have ~~ended~~been ~~March 31~~met, ~~June~~ 30Headgear ~~and~~will ~~September~~sign ~~30,~~a ~~2007~~guaranty, toif ~~correct~~Paul ~~accounting errors in the Registrant~~Guez’s ~~related~~ ~~party~~guarantee ~~accounts for those~~has ~~periods.~~not ~~The~~been ~~Registrant~~released, ~~intends~~in tofavor ~~file~~of ~~Form~~FTC ~~10-Qs~~ for ~~the~~up ~~fiscal~~to ~~quarters ended~~50.0% ~~March~~of 31the ~~and~~then ~~June~~existing ~~30,~~FTC ~~2008~~loan onto orthe ~~before October 3~~Registrant, ~~2008~~if any.

Previously, Headgear had advanced $500,000 to the Registrant to finance an initial order of merchandise. Pursuant to the original agreement, Headgear advanced an additional $750,000 to the Registrant and was to advance an additional $250,000 to the Registrant in each of February and March 2009, which amounts were available to the Registrant as working capital and were to be repaid out of the Registrant’s portion of the operating profits of the JV. Under the amended agreement, Headgear’s obligation to provide $250,000 in each of February and March 2009 is deemed to have been satisfied by the initial advance of $500,000, and the total existing obligations of $1,250,000 is only payable out of future profits of the JV.

Actual development costs will, to the extent actually paid and demonstrated to the satisfaction of the JV as being for products that the JV will sell, will be an obligation of the JV and remain an obligation of the JV and upon documentation of such payments be payable to the creditors of the Registrant, including past due payroll to the former employees of the Registrant hired by the JV.

Concurrently with the effectiveness of the original agreement, the Registrant, Headgear and Paul Guez entered into an Ancillary Agreement (the “Ancillary Agreement”) with respect to certain other matters related to the formation of the JV and the operations of the Registrant. Pursuant to the Ancillary Agreement Mr. Guez and his affiliates are to convert the 1,000,000 shares of Series A Preferred Stock of the Registrant they currently hold into 4,623,589 shares of the Registrant’s Common Stock. The Ancillary Agreement further provides that Mr. Guez and his affiliates are to deposit into escrow 10,415,975 shares of the Registrant’s common stock and 707,916 warrants to purchase the Common Stock of the Registrant currently held by them (collectively, the “Escrowed Securities”). If, as a result of the modifications contemplated by the Memo, (a) the JV achieves (i) sales during the twelve months ended December 31, 2010, equal to or greater than 150% of the full price sales revenue of the Registrant during the year ended December 31, 2008, and (ii) a net profit of $1.5 million, (b) Headgear signs a guaranty in favor of FTC for up to 50% of the Registrant’s then existing indebtedness to FTC, (c) neither the Registrant nor Headgear defaults in any of its material obligations under the Agreement or the Operating Agreement of the JV, and (d) certain other conditions are met, the Escrowed Securities will be delivered to Headgear. In addition, if the Escrowed Securities are delivered to Headgear and Mr. Guez shall exercise his right to convert any of the Registrant’s 8% Senior Secured Convertible Promissory Note in the principal amount of $1,618,093 into shares of the Registrant’s Common Stock, Headgear shall have the right to purchase one-half of such shares from Mr. Guez at the conversion price.

As consideration for their entry into the Ancillary Agreement, the Company issued to Headgear an option to purchase 10 million shares of its Common Stock at 25 cents per share and to Mr. Guez an option to purchase 3 million shares of its Common Stock at 25 cents per share, provided that both options may only be exercised if the Escrowed Securities are released to Headgear as described above.

Pursuant to the Ancillary Agreement Mr. Guez assigned his 60% membership interest in Taverniti Holdings, LLC, the entity that owns the “Taverniti So Jeans” brand to the Registrant. The assignment of such interest is to be effective upon the release of the Escrowed Securities to Headgear and requires receipt of the approval of such transfer by Jimmy Taverniti, the other member of Taverniti Holdings LLC. Mr. Guez also assigned to the Registrant all revenues and distributions to be derived from his interest in Taverniti Holdings pending receipt of the consent of Mr. Taverniti and release of the Escrowed Securities. In consideration for such assignments, effective upon the release of the Escrowed Securities to Headgear, Mr. Guez is to receive 5 million shares of the Registrant’s Common Stock. In addition, Mr. Guez, effective upon the release of the Escrowed Securities to Headgear, assigned his interest in the Yanuk brand to the Registrant, along with all revenues and distributions to be derived from the Yanuk brand pending completion of the assignment of the brand to the Registrant, except that Mr. Guez retained the right to all revenues derived from the brand outside the United States. In consideration for such assignments of the Yanuk brand, effective upon the release of the Escrowed Securities to Headgear, Mr. Guez is to receive 2 million shares of the Registrant’s Common Stock.

In addition to the rights and obligations described above, the Ancillary Agreement provides that if the Escrowed Securities are released to Headgear and certain other conditions are satisfied, than no later than January 2, 2011, for no additional consideration, the operations of the JV shall be merged or consolidated into the Registrant. Pending such merger, Headgear shall have the right to appoint one individual to the Board of Directors of the Registrant.

Item 8.01

Other Information.

The Registrant’s financial condition and lack of liquidity has impaired its ability to continue its operations as previously conducted. Further, the Registrant financial condition and liquidity continue to deteriorate precipitously. Consequently, the Registrant intends to file a Form 15 with the Securities and Exchange Commission terminating its registration under section 12 (g) of the Securities and Exchange Act of 1934, as amended, and suspending its obligation to file reports under the Securities and Exchange Act of 1934, as amended, since the number of record holders of its common stock as of January 1, 2009 was less than 300.

Item 9.01

Financial Statements and Exhibits

Exhibit No.	Description


10.1	JV Modifications Memo

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: September 30, 2008	By:	/s/ Glenn S. Palmer
Date: February 19, 2009	By:	/s/ Paul Guez
		Glenn S. Palmer
		Chairman
		Chief Executive Officer

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