SECURITIES
          AND EXCHANGE COMMISSION
 WASHINGTON,
          D.C.20549
 
 FORM 10-QSB/A
 
 QUARTERLY
          REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
 SECURITIES
          EXCHANGE ACT OF 1934
 
 FOR
          THE
          QUARTERLY PERIOD ENDED **March 31, 2007**
 
 Commission
          File #000-31935
 
 **EARTHBLOCK
          TECHNOLOGIES, INC.**
 (Exact
          name of small business issuer as specified in its charter)
 
 **NEVADA**
 (State
          or
          other jurisdiction of incorporation or organization)
  **65-0729440**
 (IRS
          Employer Identification Number)
 
 **2637
          Erie Avenue, Suite 207, Cincinnati, OH 45208**
 (Address
          of principal executive offices) (Zip Code)
 
 **(513)533-1220**
 (Registrant’s
          telephone no., including area code)
 
 Indicate
            by check mark whether the registrant (1) has filed all reports required
            to be
            filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
            the
            preceding 12 months (or for such shorter period that the registrant was
            required
            to file such reports), and (2) has been subject to such filing requirements
            for
            the past 90 days.
 
 Yes
            [X]
            No [ ]
 
 Title
            of
            Class Number of Shares Outstanding: Common
            Stock, par value $.001 per share 96,965,018 outstanding as of May 14,
            2007. Preferred
            Stock, par value $.001 per share two (2) outstanding
            as of May 14, 2007.
 
 Documents
            Incorporated by Reference: None
 -1-
  EARTHBLOCK TECHNOLOGIES,
          INC.
  FORM 10-QSB
 
 Table
          of
          Contents
 PART
                      I-- FINANCIAL INFORMATION
                3Item
                      1-- Financial Statements
                3Item
                      2-- Management's Discussion and Analysis or Plan of
                      Operation
                19Item
                      3-- Controls and Procedures
                20PART
                      II-- OTHER INFORMATION
                21Item
                      2-- Changes in Securities and Use of
                      Proceeds
                21Item
                      6-- Exhibits and Reports on Form
                      8-K
                21SIGNATURES
                22
  -2-
 Part
              I - Financial Information
 Item
            1 Financial Statements
  *Pollard-Kelley
                Auditing Services, Inc......................................................................*
 *Auditing
                Services                                              4500
                Rockside Road, Suite 450 Independence OH  44131
                330-836-2558*
 
 
 
 
 
 *Report
                of Independent Certified Public Accountants*
 
 
 Board
                of
                Directors
 EarthBlock
                Technologies, Inc. and Subsidiary
 (A
                Development Stage Company)
 
 We
                have
                reviewed the accompanying consolidated balance sheets of EarthBlock
                Technology,
                Inc. and Subsidiary (A Development Stage Company) as of March 31,
                2007 and the
                related consolidated statements of income, stockholders’ equity, and cash flows
                for the three-month ended March 31, 2007.  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.  A review of interim financial statements
                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 in accordance with the
                standards of
                the Public Company Accounting Oversight Board, the object of which
                is the
                expression of an opinion regarding the financial statements taken
                as a
                whole.  Accordingly, we do not express such an opinion.
 
 The
                accompanying financial statements have been prepared assuming that
                the Company
                will continue as a going concern.  As discussed in notes to the
                financial statements, the Company has negative working capital, negative
                cash
                flows from operations and recurring operating losses which raises
                substantial
                doubt about its ability to continue as a going concern.  Management’s
                plans in regard to these matters are also described in the notes
                to the
                financial statements.  These financial statements do not include any
                adjustments that might result from the outcome of this uncertainty.
 
 Based
                on
                our review, we are not aware of any material modifications that should
                be made
                to the accompanying financial statements in order for them to be
                in conformity
                with generally accepted accounting principles accepted in the United
                States of
                America.
 
 We
                have
                previously audited, in accordance auditing standards generally accepted
                in the
                United States of America, the consolidated balance sheet of EarthBlock
                Technologies, Inc. and Subsidiary (A Development Stage Company) and
                the related
                statements of income, retained earnings, and cash flows for the year
                then ended
                and the period from May 2002 through December 31, 2006 (since inception);
                and in
                our report dated March 29, 2007, we expressed an subject to opinion
                on those
                consolidated financial statements.  In our opinion, subject to the
                uncertainty of a going concern, the information set forth in the
                accompanying
                consolidated balance sheet as of December 31, 2006 and the related
                statements of
                income, retained earnings, and cash flows for the year then ended
                and the period
                from May 2002 through December 31, 2006 (since inception), is fairly
                stated, in
                all material respects.
 
 
 Pollard-Kelley
                Auditing Services, Inc.
 
 /S/
                Pollard-Kelley Auditing Services, Inc.
 
 May
                11,
                2007
 Independence,
                Ohio
 -3-
 
 **EarthBlock
                        Technologies, Inc and Subsidiary**(A
                        Development Stage Company)CONSOLIDATED
                        BALANCE SHEETMarch
                        31, 2007 and December 31, 2006
  **2007**
                    ****
                    **2006**ASSETSCurrent
                        AssetsCash
                        and cash equivalents
                    
                    
                    
                    
                    $
                    -
                    
                    $
                    333Inventory
                    
                    
                    
                    
                    
                    180,000
                    
                    
                    180,000Total
                        Current Assets
                    
                    
                    
                    
                    
                    180,000
                    
                    
                    180,333Fixed
                        AssetsComputers
                    
                    
                    
                    
                    
                    9,402
                    
                    
                    9,402Less:
                        Accumulated depreciation
                    
                    
                    
                    
                    
                    (4,868
                    )
                    
                    (4,428
                    )4,534
                    
                    
                    4,974Total
                        Assets
                    
                    
                    
                    
                    $
                    184,534
                    
                    $
                    185,307LIABILITIES
                        AND STOCKHOLDERS' EQUITYCurrent
                        LiabilitiesBank
                        overdrafts
                    
                    
                    
                    
                    $
                    2,444
                    
                    $
                    -Notes
                        payable
                    
                    
                    
                    
                    
                    537,500
                    
                    
                    537,500Accounts
                        payable
                    
                    
                    
                    
                    
                    134,149
                    
                    
                    130,653Accrued
                        salaries
                    
                    
                    
                    
                    
                    609,655
                    
                    
                    609,655Accrued
                        payroll taxes
                    
                    
                    
                    
                    
                    12,644
                    
                    
                    12,644Accrued
                        interest
                    
                    
                    
                    
                    
                    145,799
                    
                    
                    134,374Total
                        Current Liabilities
                    
                    
                    
                    
                    
                    1,442,191
                    
                    
                    1,424,826Stockholders'
                        EquityPreferred
                        stock
                    
                    
                    
                    
                    
                    -
                    
                    
                    -Common
                        stock
                    
                    
                    
                    
                    
                    96,965
                    
                    
                    92,465Additional
                        contributed capital
                    
                    
                    
                    
                    
                    1,738,858
                    
                    
                    1,698,358Deficit
                        accumulated during thedevelopment
                        stage
                    
                    
                    
                    
                    
                    (3,093,480
                    )
                    
                    (3,030,342
                    )Subscriptions
                        receivable
                    
                    
                    
                    
                    
                    -
                    
                    
                    -(1,257,657
                    )
                    
                    (1,239,519
                    )Total
                        Liabilities and Stockholders' Equity
                    
                    
                    
                    
                    $
                    184,534
                    
                    $
                    185,307
 See
                        accompanying notes to financial
                        statements.
 -4-
 **EarthBlock
                      Technologies, Inc and Subsidiary**(A
                      Development Stage Company)CONSOLIDATED
                      STATEMENT OF OPERATIONSFor
                      the Quarter Ending March 31, 2007 and the Year Ended December
                      31, 2006,
                      and Since Inception
  **Quarter**
                  ****
                  **Year
                      to**
                  ****
                  ****
                  ********
                  ****
                  **Ending**
                  ****
                  **Date**
                  ****
                  **Since**
                  ********
                  ****
                  **March
                      31, 2007**
                  ****
                  **2006**
                  ****
                  **Inception**Revenues
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  52,000Cost
                      of SalesDirect
                      cost of sales
                  
                  
                  3,610
                  
                  
                  156,931
                  
                  
                  184,598Gross
                      Profit
                  
                  
                  (3,610
                  )
                  
                  (156,931
                  )
                  
                  (132,598
                  )ExpensesOffice
                  
                  
                  1,138
                  
                  
                  21,179
                  
                  
                  88,075Depreciation
                  
                  
                  440
                  
                  
                  1,759
                  
                  
                  4,868Interest
                  
                  
                  11,425
                  
                  
                  45,699
                  
                  
                  146,763Licensor
                      expenses
                  
                  
                  -
                  
                  
                  -
                  
                  
                  81,528Professional
                      fees
                  
                  
                  46,346
                  
                  
                  766,875
                  
                  
                  995,459Rent
                  
                  
                  -
                  
                  
                  13,776
                  
                  
                  40,611Salaries
                  
                  
                  -
                  
                  
                  420,008
                  
                  
                  1,361,948Travel
                  
                  
                  179
                  
                  
                  21,695
                  
                  
                  86,38759,528
                  
                  
                  1,290,991
                  
                  
                  2,805,639Net
                      Loss
                  
                  $
                  (63,138
                  )
                  $
                  (1,447,922
                  )
                  $
                  (2,938,237
                  )Loss
                      per share
                  
                  $
                  (0.00
                  )Average
                      shares outstanding
                  
                  
                  96,465,018
  See
                      accompanying notes to financial
                      statements.
  -5-
  **EarthBlock
                      Technologies, Inc and Subsidiary**(A
                      Development Stage Company)CONSOLIDATED
                      STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITYSince
                      Inception through March 31,
                      2006
  **Deficit**
                  ****
                  ****
                  ****
                  ****
                  ********
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  **Accumulated**
                  ****
                  ****
                  ****
                  ****
                  ********
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  ****
                  **Additional**
                  ****
                  **During
                      the**
                  ****
                  **Stock**
                  ****
                  ****
                  ********
                  ****
                  **Preferred
                      Stock**********
                  ****
                  **Common
                      Stock**********
                  ****
                  **Contributed**
                  ****
                  **Development**
                  ****
                  **Subscription**
                  ****
                  ****
                  ********
                  ****
                  **Shares**
                  ****
                  **Amount**
                  ****
                  **Shares**
                  ****
                  **Amount**
                  ****
                  **Capital**
                  ****
                  **Stage**
                  ****
                  **Receivable**
                  ****
                  **Total**May,
                      2002 Inception
                  
                  
                  -
                  
                  $
                  -
                  
                  
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Original
                      issue for cashand
                      services
                  
                  
                  -
                  
                  
                  -
                  
                  
                  10,505,000
                  
                  
                  8,001
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  8,001Net
                      Loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Balance
                      December 31, 2002
                  
                  
                  -
                  
                  
                  -
                  
                  
                  10,505,000
                  
                  
                  8,001
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  8,001Merger
                      with LL BrownInternational
                      Inc.
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (504,982
                  )
                  
                  1,999
                  
                  
                  3,808
                  
                  
                  (154,243
                  )
                  
                  -
                  
                  
                  (148,436
                  )Shares
                      issued for services
                  
                  
                  -
                  
                  
                  -
                  
                  
                  12,000,000
                  
                  
                  12,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  12,000Shares
                      issued for interest
                  
                  
                  -
                  
                  
                  -
                  
                  
                  965,000
                  
                  
                  965
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  965Dividends
                      paid
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1,000
                  )
                  
                  -
                  
                  
                  (1,000
                  )Net
                      loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (515,013
                  )
                  
                  -
                  
                  
                  (515,013
                  )Balance
                      December 31, 2003
                  
                  
                  -
                  
                  
                  -
                  
                  
                  22,965,018
                  
                  
                  22,965
                  
                  
                  3,808
                  
                  
                  (670,256
                  )
                  
                  -
                  
                  
                  (643,483
                  )Shares
                      issued for services
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,050,000
                  
                  
                  3,050
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,050Share
                      sales
                  
                  
                  -
                  
                  
                  -
                  
                  
                  14,800,000
                  
                  
                  14,800
                  
                  
                  375,200
                  
                  
                  -
                  
                  
                  (75,000
                  )
                  
                  315,000Net
                      Loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (628,743
                  )
                  
                  -
                  
                  
                  (628,743
                  )Balance
                      December 31, 2004
                  
                  
                  -
                  
                  
                  -
                  
                  
                  40,815,018
                  
                  
                  40,815
                  
                  
                  379,008
                  
                  
                  (1,298,999
                  )
                  
                  (75,000
                  )
                  
                  (954,176
                  )Collection
                      of stocksubscription
                      receivable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  72,500
                  
                  
                  72,500Share
                      sales
                  
                  
                  -
                  
                  
                  -
                  
                  
                  4,000,000
                  
                  
                  4,000
                  
                  
                  6,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  10,000Collection
                      of stocksubscription
                      receivable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,500
                  
                  
                  2,500Correction
                      of 2004 sharesales
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5,000,000
                  
                  
                  5,000
                  
                  
                  (5,000
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -Net
                      Loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (283,421
                  )
                  
                  -
                  
                  
                  (283,421
                  )Balance
                      December 31, 2005
                  
                  
                  -
                  
                  
                  -
                  
                  
                  49,815,018
                  
                  
                  49,815
                  
                  
                  380,008
                  
                  
                  (1,582,420
                  )
                  
                  -
                  
                  
                  (1,152,597
                  )Share
                      sales
                  
                  
                  -
                  
                  
                  -
                  
                  
                  7,000,000
                  
                  
                  7,000
                  
                  
                  28,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  35,000Shares
                      for services
                  
                  
                  2
                  
                  
                  -
                  
                  
                  24,250,000
                  
                  
                  24,250
                  
                  
                  839,750
                  
                  
                  -
                  
                  
                  -
                  
                  
                  864,000Shares
                      issued inconnectionwith
                      certain Notes payable
                  
                  
                  -
                  
                  
                  -
                  
                  
                  11,400,000
                  
                  
                  11,400
                  
                  
                  330,600
                  
                  
                  -
                  
                  
                  -
                  
                  
                  342,000Sale
                      and experation ofwarrants
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  120,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  120,000Net
                      Loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1,447,922
                  )
                  
                  -
                  
                  
                  (1,447,922
                  )Balance
                      December 31, 2006
                  
                  
                  2
                  
                  
                  -
                  
                  
                  92,465,018
                  
                  
                  92,465
                  
                  
                  1,698,358
                  
                  
                  (3,030,342
                  )
                  
                  -
                  
                  
                  (1,239,519
                  )Shares
                      for services
                  
                  
                  -
                  
                  
                  -
                  
                  
                  4,500,000
                  
                  
                  4,500
                  
                  
                  40,500
                  
                  
                  -
                  
                  
                  -
                  
                  
                  45,000Net
                      loss
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (63,138
                  )
                  
                  -
                  
                  
                  (63,138
                  )Balance
                      March 31, 2007
                  
                  
                  2
                  
                  $
                  -
                  
                  
                  96,965,018
                  
                  $
                  96,965
                  
                  $
                  1,738,858
                  
                  $
                  (3,093,480
                  )
                  $
                  -
                  
                  $
                  (1,257,657
                  )
  See
                        accompanying notes to financial
                        statements.
  -6-
  **EarthBlock
                        Technologies, Inc and Subsidiary**(A
                        Development Stage Company)CONSOLIDATED
                        STATEMENT OF CASH FLOWSFor
                        the Quarter Ending March 31, 2007 and the Year Ended December
                        31, 2006,
                        and Since Inception
  **Quarter**
                    ****
                    **Year
                        to**
                    ****
                    
                    ********
                    ****
                    **Ending**
                    ****
                    **Date**
                    ****
                    ****Since****
                    ********
                    ****
                    **March
                        31, 2007**
                    ****
                    **2006**
                    ****
                    **Inception**Cash
                        Flows from Operating ActivitiesNet
                        Loss
                    
                    $
                    (63,138
                    )
                    $
                    (1,447,922
                    )
                    $
                    (2,938,237
                    )Adjustments
                        to reconcile net loss to netcash
                        provided by operating activitiesDepreciation
                        and amortization
                    
                    
                    440
                    
                    
                    1,759
                    
                    
                    4,868Stock
                        for services
                    
                    
                    45,000
                    
                    
                    1,206,000
                    
                    
                    1,266,050Stock
                        for interest
                    
                    
                    -
                    
                    
                    -
                    
                    
                    965Decrease
                        in Start Up Costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    33,408(Increase)
                        in Inventory
                    
                    
                    -
                    
                    
                    (180,000
                    )
                    
                    (180,000
                    )Increase
                        in Accounts payable
                    
                    
                    3,496
                    
                    
                    27,745
                    
                    
                    34,713Increase
                        in Accrued salaries
                    
                    
                    -
                    
                    
                    (93,785
                    )
                    
                    609,655Increase
                        in Payroll taxes
                    
                    
                    -
                    
                    
                    12,644
                    
                    
                    12,644Increase
                        in Accrued interest
                    
                    
                    11,425
                    
                    
                    45,699
                    
                    
                    145,799Net
                        Cash (Used) by Operating Activities
                    
                    
                    (2,777
                    )
                    
                    (427,860
                    )
                    
                    (1,010,135
                    )Cash
                        Flows from Investing ActivitiesIncrease
                        in Start Up Costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (33,408
                    )Purchase
                        of fixed assets
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (9,402
                    )Subscriptions
                        receivable
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Net
                        Cash (Used) by Investing Activities
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (42,810
                    )Cash
                        Flows from Financing ActivitiesIncrease
                        in Notes payable
                    
                    
                    -
                    
                    
                    277,500
                    
                    
                    537,500Funds
                        paid for Merger shell
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (49,000
                    )Dividend
                        paid
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,000
                    )Sale
                        of Warrants
                    
                    
                    -
                    
                    
                    120,000
                    
                    
                    120,000Sale
                        of Common stock
                    
                    
                    -
                    
                    
                    35,000
                    
                    
                    443,001Cash
                        Flows Provided by Financing Activities
                    
                    
                    -
                    
                    
                    432,500
                    
                    
                    1,050,501Net
                        Increase in Cash and Cash Equivalents
                    
                    
                    (2,777
                    )
                    
                    4,640
                    
                    
                    (2,444
                    )Cash
                        and Cash Equivalents - Beginning
                    
                    
                    333
                    
                    
                    (4,307
                    )
                    
                    -Cash
                        and Cash Equivalents - Ending
                    
                    $
                    (2,444
                    )
                    $
                    333
                    
                    $
                    (2,444
                    )
  See
                        accompanying notes to financial
                        statements.
  -7-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              1
              - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 History:
 
 The
              Company is a Nevada corporation incorporated on February 19, 1997,
              and is a
              reporting company with the Securities and Exchange Commission. It changed
              its
              name from L.L. Brown International, Inc. to Terra Block International
              Inc. on
              February 19, 2003.
 
 On
              February 14, 2003 the Company entered into a Share Exchange Agreement
              with Terra
              Block Consolidated, Inc. The agreement provides for 100% of the shares
              of Terra
              Block Consolidated, Inc. to be acquired by the Company in exchange
              for shares of
              common stock of the Company, with the total issued and outstanding
              shares of the
              Company immediately after the closing and a 2 to 1 reverse split, of
              10,000,018.
              The Company’s former subsidiary, LLBA has been spun off, leaving Terra Block
              Consolidated, Inc. as the sole operating subsidiary of the Company
              after
              effecting the agreement. The new combination also assumed $100,660
              of accounts
              payable. The combination was accounted for as a reverse merger whereby
              the
              acquired company is treated as the acquiring company for accounting
              purposes.
 
 Terra
              Block Consolidated, Inc. was incorporated in Nevada on May 30, 2002
              and engages
              in the manufacture, distribution and application of technologically
              advanced
              building products through a licensing arrangement with Terra Block,
              Inc. Terra
              Block Consolidated, Inc. has the exclusive right to make, have made,
              use and
              sell Terra Block, Inc.’s products anywhere in the world. Terra Block, Inc. is a
              related party of Terra Block International, Inc. as a shareholder.
              The license
              agreements provide Terra Block Consolidated, Inc. the rights to all
              patented
              technologies, trade secret materials, copyrights, trademarks and all
              intellectual property of Terra Block Inc. The license is valid until
              terminated
              by Terra Block Consolidated, Inc. with 30 days advance written notice
              to Terra
              Block, Inc. or by Terra Block, Inc., if there is a material breach
              of the
              licensing agreement by Terra Block Consolidated, Inc. Under this agreement,
              Terra Block Consolidated, Inc. has the exclusive right to buy the license
              patent
              rights for $10,000,000. This agreement was terminated January 10,
              2005.
 
 On
              January 21, 2004, the Company entered into a Stock Purchase Agreement
              with an
              individual to sell 3,600,000 shares of common stock for $250,000. The
              purchaser
              also, is to receive redeemable common stock purchase warrants to acquire
              1,000,000 shares of common stock at an exercise price of $.10 per share
              until
              January 20, 2009. In addition, 1,500,000 shares of common stock were
              issued as a
              commission in connection with this stock sale.
 
 -8-
 
 **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              1
              - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 On
              August
              10, 2004, the Company issued 1,250,000 shares of common stock as compensation.
              The shares were valued at par value.
 
 On
              October 4, 2004, the Company issued 300,000 shares of common stock
              as prepaid
              interest. The shares were valued at par value.
 
 On
              October 29 and December 16, 2004, the Company entered into two stock
              subscription agreements with the same party. The agreements sold 10,000,000
              shares of common stock at $125,000. At June 30, 2005 there is $0 due
              the Company
              from this transaction.
 
 On
              December 16, 2004, the Company sold 1,200,000 shares of common stock
              for
              $15,000.
 
 On
              February 11, 2005, the Company changed it name to EarthBlock Technologies,
              Inc.
 
 On
              June
              8, 2005, the Company sold 4,000,000 shares of common stock for
              $10,000.
 
 On
              February 16, 2006, the Company sold 4,000,000 shares of common stock
              for
              $20,000.
 
 On
              February 21, 2006, the Company issued 2,500,000 shares of common stock
              for
              services. The shares issued were valued at the market value of the
              stock on date
              of issue, total value $87,500.
 
 On
              March
              29, 2006, the Company sold 1,500,000 shares of common stock for
              $7,500.
 
 On
              March
              30, 2006, the Company sold 1,500,000 shares of common stock for
              $7,500.
 
 On
              April
              26, 2006, the Company issued 2,500,000 shares of common stock for services.
              The
              shares issued were valued at the market value of the stock on date
              of issue,
              total value $300,000.
 
 On
              May 9,
              2006, the Company issued 2,000,000 shares of common stock for services.
              The
              shares issued were valued at the market value of the stock on date
              of issue,
              total value $120,000.
 
 On
              June
              27, 2006, the Company issued 1,250,000 shares of common stock for services.
              The
              shares issued were valued at the market value of the stock on date
              of issue,
              total value $37,500.
 
 -9-
 
 **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              1
              - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 On
              June
              27, 2006, the Company issued 11,400,000 shares of common stock to two
              note
              holders to stay their calling due the note. No formal agreement was
              signed. The
              shares issued were valued at the market value of the stock on date
              of issue,
              total value $342,000.
 
 On
              August
              1, 2006, the Company issued 2,000,000 shares of common stock to two
              individuals
              for services. The shares were valued at the market price of the stock
              on the
              date of the issue, total value $44,000.
 
 On
              August
              23, 2006, the Company issued 10,000,000 shares of common stock to three
              individuals for services. The shares were valued at the market price
              of the
              stock on the date of issue, total value $235,000.
 
 On
              December 7, 2006, the Company issued 4,000,000 shares of common stock
              to an
              individual for services. The shares were valued at the market price
              of the stock
              on the date of issue, total value $40,000.
 
 On
              January 10, 2007, the Company issued 4,500,000 shares of common stock
              to an
              individual for services. The shares were valued at the market price
              of the stock
              on the date of issue, total value $45,000.
 
 Basis
              of Consolidation:
 
 The
              accompanying consolidated financial statements include the accounts
              of
              EarthBlock Technologies, Inc. and Terra Block Consolidated, Inc. All
              significant
              inter-company accounts and transactions, if any, have been eliminated
              in
              consolidation.
 
 Cash
              and Cash Equivalents:
 
 For
              the
              purposes of the Statement of Cash Flows, the Company considers all
              short-term
              debt securities to be cash equivalents.
 
 Cash
              paid
              during the period for:
  **Since**
                    ********
                    ****
                    **2007**
                    ****
                    ****
                    **2006**
                    ****
                    ****
                    **Inception**Interest
                    
                    $
                    0
                    
                    $
                    0
                    
                    $
                    0Income
                        taxes
                    
                    $
                    0
                    
                    $
                    0
                    
                    $
                    0
 
 Income
              Taxes:
 
 The
              Company accounts for income taxes under a method, which requires a
              company to
              recognize deferred tax assets and liabilities for the expected future
              tax
              consequences of
  -10-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              1
              - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 events
              that have been recognized in a company’s financial statements or tax returns.
              Under this method, deferred tax assets and liabilities are determined
              based on
              the difference between the financial statements carrying amounts and
              tax basis
              of assets and liabilities using enacted tax rates. The Company presently
              prepares its tax return on the cash basis and its financial statements
              on the
              accrual basis. No deferred tax assets or liabilities have been recognized
              at
              this time, since the Company has shown losses for both tax and financial
              reporting. The Company’s net operating loss carry forward at March 31, 2007 is
              approximately $2,900,000.
 
 Use
              of
              Estimates:
 
 The
              preparation of financial statements in conformity with generally accepted
              accounting principles requires management to make estimates and assumptions
              that
              affect certain reported amounts and disclosures. Accordingly, actual
              results
              could differ from those estimates.
 
 Development
              Stage:
 
 The
              Company is classified as a development stage entity since it devotes
              most of its
              activities to establishing business and its principal activities have
              not yet
              commenced.
 
 NOTE
              2 -
              NOTES PAYABLE
 
 Terra
              Block Consolidated, Inc.’s Notes Payable:
 
 On
              October 15, 2002 the Company entered into a loan agreement with an
              individual to
              borrow $15,000. The terms of the agreement called for the principal
              sum of
              $15,000 to be paid on or before November 15, 2002 and an additional
              interest
              amount of $15,000 to be paid on April 15, 2003. The note is unsecured.
              A payment
              of $7,500 was made on February 3, 2004. The Company is in default under
              this
              agreement. The lender has not made formal demand for payment to date.
              The
              balance due on this note at March 31, 2007 and December 31, 2006 was
              $7,500 plus
              accrued interest.
 
 On
              October 21, 2002 the Company entered into a loan agreement with an
              individual to
              borrow $10,000. The terms of the agreement called for the principal
              sum of
              $10,000 to be paid within 45 days, and an additional interest amount
              of $10,000
              to be paid within 180 days. The note is unsecured. A payment of $5,000
              was made
              on February 3, 2004. The Company is in default under this agreement.
              The lender
              has not made formal demand for payment to date. The balance due on
              this note at
              March 31, 2007 and December 31, 2006 was $5,000 plus accrued
              interest.
 
 -11-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              2
              - NOTES PAYABLE - CONTINUED
 
 On
              December 19, 2002 the Company entered into a loan agreement with an
              individual
              to borrow $10,000. The terms of the agreement called for the principal
              sum of
              $10,000 to be paid on or before April 15, 2003 plus interest of $2,000.
              In the
              event that the principal has not been repaid by April 30, 2003, additional
              interest is owed equal to $200 per month thereafter. In addition 10,000
              shares
              of common stock will be delivered as additional consideration. The
              note is
              unsecured. In addition to the issue of common stock, a payment of $5,000
              was
              made on February 3, 2004. The Company is in default under this agreement.
              The
              lender has not made formal demand for payment to date. The balance
              due on this
              note at March 31, 2007 and December 31, 2006 was $5,000 plus accrued
              interest.
 
 On
              December 19, 2002 the Company entered into a loan agreement with an
              individual
              to borrow $10,000. The terms of the agreement called for the principal
              sum of
              $10,000 to be paid on or before April 15, 2003 plus interest of $2,000.
              In the
              event that the principal has not been repaid by April 30, 2003, additional
              interest is owed equal to $200 per month thereafter. In addition 10,000
              shares
              of common stock will be delivered as additional consideration. The
              note is
              unsecured. In addition to the issue of common stock, a payment of $5,000
              was
              made on February 3, 2004. The Company is in default under this agreement.
              The
              lender has not made formal demand for payment to date. The balance
              due on this
              note at March 31, 2007 and December 31, 2006 was $5,000 plus accrued
              interest.
 
 On
              December 20, 2002 the Company entered into a loan agreement with an
              individual
              to borrow $10,000. The terms of the agreement called for the principal
              sum of
              $10,000 to be paid on or before March 20, 2003 plus interest of $2,000.
              The note
              is unsecured. A payment of $5,000 was made on February 3, 2004. The
              Company is
              in default under this agreement. The lender has not made formal demand
              for
              payment to date. The balance due on this note at March 31, 2007 and
              December 31,
              2006 was $5,000 plus accrued interest.
 
 On
              December 23, 2002 the Company entered into a loan agreement with an
              individual
              to borrow $5,000. The terms of the agreement called for the principal
              sum of
              $5,000 to be paid on or before April 23, 2003 plus interest of $1,000.
              The note
              is unsecured. A payment of $2,500 was made on February 3, 2004. The
              Company is
              in default under this agreement. The lender has not made formal demand
              for
              payment to date. The balance due on this note at March 31, 2007 and
              December 31,
              2006 was $2,500 plus accrued interest.
 
 On
              January 15, 2003 the Company entered into a loan agreement with an
              individual to
              borrow $20,000. The terms of the agreement called for the principal
              sum of
              $20,000 to be paid on or before April 30, 2003 plus interest of $4,000.
              In the
              event that the principal has not been repaid by April 30, 2003, additional
              interest is owed equal to $400 per month thereafter. In addition 20,000
              shares
              of common stock will be delivered as additional
              consideration. The note is unsecured. In addition to the issue of common
              stock,
              a payment of $10,000 was made on February 3, 2004. The Company is in
              default
              under this agreement. The lender has not made formal demand for payment
              to date.
              The balance on this note at March 31, 2007 and December 31, 2006 was
              $10,000
              plus accrued interest.
  -12-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              2
              - NOTES PAYABLE - CONTINUED
  On
              March
              14, 2003 the Company entered into a loan agreement with an individual
              to borrow
              $10,000. The terms of the agreement called for the principal sum of
              $10,000 to
              be paid on or before July 14, 2003 plus interest of $2,000. The note
              is
              unsecured. A payment of $5,000 was made on February 3, 2004. The Company
              is in
              default under this agreement. The lender has not made formal demand
              for payment
              to date. The balance due on this note at March 31, 2007 and December
              31, 2006
              was $5,000 plus accrued interest.
 
 EarthBlock
              Technologies, Inc.’s Notes Payable:
  On
              October 6, 2003 the Company entered into a loan agreement with an individual
              to
              borrow $20,000 at 10% interest due October 6, 2004. In addition 50,000
              shares of
              common stock will be delivered as additional consideration. The note
              is
              unsecured. The Company has issued the common stock required under this
              agreement. The balance on this note at March 31, 2007 and December
              31, 2006 was
              $20,000 plus accrued interest.
 
 On
              October 6, 2003 the Company entered into a loan agreement with an investment
              consortium to borrow $12,500 at 10% interest due October 6, 2004. In
              addition
              200,000 shares of common stock will be delivered as additional consideration.
              The note is unsecured. The Company has issued the common stock required
              under
              this agreement. The balance on this note at March 31,2007 and December
              31, 2006
              was $12,500 plus accrued interest.
 
 On
              October 6, 2003 the Company entered into a loan agreement with an individual
              to
              borrow $12,500 at 10% interest due October 6, 2004. The note is unsecured.
              The
              balance on this note at March 31, 20067 and December 31, 2006 was $12,500
              plus
              accrued interest.
 
 On
              April
              30, 2004 the Company entered into a loan agreement with an Investment
              Company to
              borrow $100,000 at 10% interest due December 31, 2004. The note is
              unsecured.
              The balance on this note at March 31, 2007 and December 31, 2006 was
              $100,000
              plus accrued interest.
  On
              July
              13, 2004 the Company entered into a loan agreement with an Investment
              Company to
              borrow $20,000 at 10% interest due January 15, 2005. The note is unsecured.
              The
              balance on this note at March 31, 2007 and December 31, 2006 was $20,000
              plus
              accrued interest.
 
 On
              August
              23, 2005 the Company entered into a loan agreement with an individual
              to borrow
              $35,000 at 12% interest due February 23, 2006. The note is unsecured.
              The
              balance on this note at March 31, 2007 and December 31, 2006 was $35,000
 plus
              accrued interest.
 
 On
              August
              23, 2005 the Company entered into a loan agreement with an Investment
              Company to
              borrow $15,000 at 12% interest due February 23, 2006. The note is unsecured.
              The
              balance on this note at March 31, 2007 and December 31, 2007 was $15,000
              plus
              accrued interest.
 
 On
              June
              29, 2006, the Company entered into a loan agreement with an individual
              to borrow
              $209,000 at 12% interest due June 29, 2007. The note is unsecured.
              The balance
              on this note at March 31, 2007 and December 31, 2006 was $209,000 plus
              accrued
              interest.
 
 On
              July
              5, 2006, the Company entered into a loan agreement with an individual
              to borrow
              $24,000 at 12% interest due July 5, 2007. The note is unsecured. The
              balance on
              this note at March 31, 2007 and December 31, 2006 was $24,000 plus
              accrued
              interest.
 
 On
              July
              20, 2006, the Company entered into a loan agreement with an individual
              to borrow
              $7,000 at 12% interest due July 20, 2007. The note is unsecured. The
              balance on
              this note at March 31, 2007 and December 31, 2006 was $7,000 accrued
              interest.
 
 On
              August
              4 2006, the Company entered into a loan agreement with an individual
              to borrow
              $22,500 at 12% interest due August 4, 2007. The note is unsecured.
              The balance
              on this note at March 31, 2007 and December 31, 2006 was $22,500 plus
              accrued
              interest.
 
 On
              August
              17, 2006, the Company entered into a loan agreement with an individual
              to borrow
              $15,000 at 12% interest due August 17, 2007. The note is unsecured.
              The balance
              on this note at March 31, 2007 and December 31, 2006 was $15,000 plus
              accrued
              interest.
 
 All
              notes
              except those dated June 29, 2006 or later are in default, payment was
              not made
              on notes stated due dates. The Company has not received any notices
              of
              default.
 
 -13-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              3 -
              STOCKHOLDERS’ EQUITY
 
 Preferred
              Stock
 
 At
              December 31, 2006 and 2005, the Company had 10,000,000 shares authorized
              of
              convertible preferred stock with a par value of $0.001 per share. Additional
              terms and conditions of the stock are to be set by the board of directors
              of the
              Company at the time of issue. On February 7, 2006, the Company established
              a
              Series A Preferred stock, consisting of two shares authorized and outstanding.
              The shares have no dividend rights, no liquidating preference, no conversion
              rights and no redemption rights. However, the two shares voting in
              aggregate, to
              vote on all shareholder matters equal to 60% of the total common share
              voting.
              There were 2 shares outstanding at March 31, 2007 December 31, 2006
              respectively.
 
 Common
              Stock
 
 At
              December 31, 2006 and 2005 the Company had 100,000,000 shares authorized
              common
              stock with a par value of $0.001 per share. There were 96,965,018 and
              92,465,018
              shares outstanding at March 31, 2007 and December 31, 2006
              respectively.
 
 Warrants
 
 On
              May 4,
              May 9, and June 22, 2006, the Company sold 1,000,000 Class A Warrants
              for
              $17,500. Total Class A Warrants sold were 3,000,000 for a total raised
              of
              $52,500. Class A Warrants exercise at a price equal to the average
              weighted
              price for the lowest eight days of the proceeding 20 trading days multiplied
              by
              70% per share, with a minimum exercise price of $.007 and a maximum
              exercise
              price equal to the greater of $.025 or 50% of the computed price. Class
              A
              Warrants vest monthly and shall expire 90 days from the day first
              vested.
 
 On
              July
              17 2006, the Company sold 1,000,000 Class A Warrants for $17,500. Class
              A
              Warrants exercise at a price equal to the average weighted price for
              the lowest
              eight days of the proceeding 20 trading days multiplied by 70% per
              share, with a
              minimum exercise price of $.007 and a maximum exercise price equal
              to the
              greater of $.025 or 50% of the computed price. Class A Warrants vest
              monthly and
              shall expire 90 days from the day first vested.
 
 On
              August
              23, 2006, the Company sold 10,000,000 Class A Warrants for $50,000.
              Class A
              Warrants exercise at a price equal to the average weighted price for
              the lowest
              eight days of the proceeding 20 trading days multiplied by 70% per
              share, with a
              minimum exercise price of $.007 and a maximum exercise price equal
              to the
              greater of $.025 or 50% of the computed price. Class A Warrants vest
              monthly and
              shall expire 90 days from the day first vested.
  -14-
  **EarthBlock
              Technologies, Inc. and Subsidiary**
 (A
              Development Stage Company)
 NOTES
              TO
              FINANCIAL STATEMENTS
 March
              31,
              2007
 
 NOTE
              3
              - STOCKHOLDERS’ EQUITY - CONTINUED
 
 All
              warrants were exercised as of December 31, 2006.
 
 NOTE
              4
              - COMMITMENTS
 
 The
              Company rents its present shared office space on a month to month basis.
              The
              Company expects to continue on that basis in 2006. Rent expense through
              March
              31, 2007 and December 31, 2006 was $0 and $13,776 respectively.
 
 NOTE
              5
              - DERIVATIVE LIABILITY ARRISING FROM WARRANTS
 
 The
              Company accounts for debt with embedded conversion features and warrant
              issues
              in accordance with EITF 98-5: *Accounting
              for convertible securities with beneficial conversion features or contingency
              adjustable conversion* and
              EITF
              No. 00-27: *Application
              of issue No 98-5 to certain convertible instruments.* Conversion features determined to be beneficial to the holder are valued
              at fair
              value and recorded to additional paid in capital. The Company determines
              the
              fair value to be ascribed to the detachable warrants issued with the
              convertible
              debentures utilizing the *Black-Scholes* method.
              Any discount derived from determining the fair value to the debenture
              conversion
              features and warrants is amortized to financing cost over the life
              of the
              debenture. The unamortized costs if any, upon the conversion of the
              warrants is
              expensed to financing cost on a pro rata basis over the life of the
              warrant.
 
 Debt
              issue with the variable conversion features are considered to be embedded
              derivatives and are accountable in accordance with FASB 133; *Accounting
              for Derivative Instruments and Hedging Activities* .
              The
              fairs value of the embedded derivative is recorded to derivative liability.
              This
              liability is required to be marked each reporting period. The resulting
              discount
              on the debt is amortized to interest expense over the life of the related
              debt.
 
 NOTE
              6
              - RELATED PARTIES
 
 The
              Company owed its officers who are also shareholders $603,432 and $673,560
              in
              accrued wages at September 30, 2006 and 2005 respectively. There are
              no other
              amounts due to or from these shareholder officers. The Company entered
              into
              employment agreements with its three officers. The agreements are identical.
              The
              agreements are for three years, call for annual wages of $120,000 each,
              with an
              annual inflation adjustment. The agreements also provide for twelve
              paid
              holidays, seven paid personal days and fifteen paid vacation days annually.
              In
              addition the Company is to provide $500,000 of group live insurance
              for each
              officer, at no cost. The agreements expired in June 2005.
  NOTE
              7 -
              GOING CONCERN
 
 The
              Company has not generated significant revenues or profits to date.
              This factor
              among others raises considerable doubt the Company will be able to
              continue as a
              going concern .
 
 The
              Company’s continuation as a going concern depends upon its ability to generate
              sufficient cash flow to conduct its operations and its ability to obtain
              additional sources of capital and financing. The accompanying consolidated
              financial statements do not include any adjustments that may result
              from the
              outcome of this uncertainty. Managements plans to relieve these problems
              by
              continuing to raise working capital either through stock sales or loans.
  -15-
 **Item
        2. Management’s Discussion and Analysis of Financial
        Condition or Plan of Operation**
  The
        following discussion should be read in conjunction with our unaudited interim
        financial statements and related notes thereto included in this quarterly
        report
        and in our audited financial statements and Management’s Discussion And Analysis
        of Financial Condition or Plan of Operation (“MD&A”) contained in our Form
        10-KSB for the year ended December 31, 2005. Certain statements in the following
        MD&A are forward looking statements. Words such as “expects”, “anticipates”,
“estimates” and similar expressions are intended to identify forward looking
        statements. Such statements are subject to risks and uncertainties that could
        cause actual results to differ materially from those projected.
  **GENERAL**
  DESCRIPTION
        OF BUSINESS
  EarthBlock
        Technologies, Inc. a Nevada Corporation was formerly Terra Block International,
        Inc., having been renamed effective February 11, 2005, (the “Company” or
“EarthBlock”) was formerly L.L. Brown International, Inc. (“L.L. Brown”). L.L.
        Brown was originally incorporated as Smart Industries, Inc. on February 19,
        1997. On February 14, 2003, L.L. Brown entered into a Share Exchange Agreement
        with Terra Block Consolidated. The Agreement provides for 100% of the shares
        of
        Terra Block Consolidated to be acquired by L.L. Brown in exchange for shares
        of
        common stock of L.L. Brown; for the establishment of a new Board of Directors
        consisting of Terra Block Consolidated directors; and, with total issued
        and
        outstanding common shares of the Company immediately after the closing of
        10,000,000. The Company’s former subsidiary, LLBA has been spun off, leaving
        Terra Block Consolidated as the sole operating subsidiary of the Company
        after
        effecting the Agreement.
  INTRODUCTION
  EarthBlock
        Technologies, Inc. uses compressed earth blocks in its building system to
        construct a variety of structures both commercial and residential, including
        warehouses, office buildings, outbuildings, retail stores, various types
        of
        walls and residences from expensive custom homes to low income housing.
  The
        construction method is simple; utilizing properly mixed soil compressed into
        dense, non-fired, uniform building blocks at the building site. The blocks
        don’t
        require curing and are stacked on a proper foundation using thin slurry between
        each layer. A comprehensive bonding takes place between the blocks and results
        in a block-to-block bond, not a block-to-mortar bond as in concrete hollow
        block
        construction. This comprehensive bonding results in a monolithic structure
        and a
        block-to-block strength with very high shearing strength. Completed walls
        require a bond beam on top before the roof is installed. Completed walls
        receive
        a stucco finish. The system is fast, a single machine can produce over 3,800
        blocks per day and wall construction can be completed with unskilled labor.
  The
        blocks are strong having compressive strength between 1,000 - 1,600 psi without
        any additives. Building codes in the United States require a non-fired masonry
        block to have a compressive strength of 300 psi.
  The
        Company’s goal is to become the leading provider of durable, structurally sound,
        low cost, and environmentally friendly, residential and commercial buildings
        in
        the world.
  -16-
  COMPRESSED
        EARTH BLOCK CONSTRUCTION
  The
        Company’s building system makes possible the large-scale construction of low
        cost, affordable, energy-efficient homes as well as a variety of commercial
        structures. EarthBlock’s suppliers have perfected machines that convert our most
        abundant raw material (common soil) into one of our most needed building
        components. These portable machines convert ordinary earth on a building
        site,
        into rock-hard, durable blocks, used in construction. The machine can be
        towed
        to a site by a normal pick-up truck or SUV. It takes the soil, which is already
        there in abundance and converts it into strong, stable building blocks. There
        is
        no material cost and no freight expense. The system utilizes low skilled
        labor
        to construct the walls and it’s fast as the blocks do not require curing.
  The
        Company uses these blocks to build structures that have the following
        characteristics:
  -
              The
                  raw material - dirt - is readily available at the job site.
  -
              No
                  expensive additives required
  -
              Skilled
                  labor is not required for construction. Blocks are simply plumbed
                  and
                  stacked which reduces labor cost significantly.
  -
              Excellent
                  thermal performance, reducing heating and cooling
                  costs.
  -
              Low
                  maintenance.
  -
              Long
                  lasting and durable.
  -
              Non-toxic-
                  materials are completely natural and don't out-gas toxic
                  chemicals.
  -
              Sound
                  resistant.
  -
              Fire
                  resistant - earthen walls don't burn.
  -
              Insect
                  resistant - the walls are solid and very dense, discouraging insects.
  -
              Very
                  strong - highly resistant to extreme wind conditions as found in
                  hurricanes and tornadoes.
  -
              The
                  monolithic walls and concrete bond beam create a structure very
                  resistant
                  to earthquakes.
  -17-
  CERTAIN
        RISK FACTORS
  GOING
        CONCERN RISK
  We
        have
        had and could have losses, deficits and deficiencies in liquidity, which
        could
        impair our ability to continue as a going concern.
  In
        Note #
        7 to our consolidated financial statements, our independent auditors have
        indicated that certain factors raise substantial doubt about our ability
        to
        continue as a going concern.
  The
        ability of the Company to continue as a going concern is dependent upon
        generating sufficient cash flow to conduct operations and obtaining additional
        capital and financing. Any financing activity is likely to result in significant
        dilution to current shareholders.
  The
        Company’s strategic plan for dealing with its insufficient cash flow is
        currently being developed, and may include additional private placements
        of the
        Company’s common stock, the abandonment of unprofitable projects and the
        exchange of common stock for settlement of vendor accounts. There can be
        no
        assurance that any of the plans developed by the Company will produce cash
        flows
        sufficient to overcome current liquidity problems.
  The
        Company’s long-term viability as a going concern is dependent on certain key
        factors, as follows:
  -
              The
                  Company’s ability to obtain adequate sources of outside financing.
  -
              The
                  Company’s ability to ultimately achieve adequate profitability and cash
                  flows necessary to sustain continuing operations.
  IMPLEMENTATION
        OF BUSINESS STRATEGY DEPENDENT ON ADDITIONAL FINANCING
  The
          Company’s management and auditor have raised grave concerns relative to the
          Company’s financial ability to continue as a going concern. Management is and
          has been actively seeking solutions to the Company’s current financial dilemma
          and lack of adequate working capital and will continue to do so. However,
          unless
          the Company can find a solution to this problem, management will be facing
          a
          likelihood of selling the Company, shutting down operations, or declaring
          bankruptcy.
 In
          search
          of a solution, the Company is actively pursuing alliances, mergers, licensing
          arrangements and joint venture relationships, including entities in which
          current management has an ownership interest, which will allow the Company
          to
          continue operation. Any business relationship entered into will likely
          result in
          significant dilution of ownership to the shareholders with no assurance
          of
          successful continuation of the business of the Company. Any such transactions
          may lead to changes in control, changes in future plans and ultimately
          the
          Company no longer trading on the NASDAQ Bulletin Board.
 
 Further,
          as the Company requires working capital, sources of such capital may have
          onerous requirements which will likely result in significant dilution and
          further indebtedness. The company may be required to reverse or forward
          split
          its stock in order to satisfy a potential investor, and may likely increase
          the
          number of its authorized shares providing a potential for additional
          dilution.
  -18-
  GOVERNMENTAL
        REGULATION
  We
        are
        subject to general business regulations, including Federal and state
        construction, environmental and hazardous material handling regulations.
        In
        other countries in which we operate, we may be subject to additional regulations
        as well.
  NEW
        PROJECTS.
  The
        Company may undertake one or more new projects worldwide without limitation.
        Management may fail to accurately gauge conditions prior to undertaking a
        new
        project, and therefore may not achieve anticipated results from a new project.
        If this were to occur, the Company may experience lower cash flow from
        operations. To the extent that the Company incurs debt to finance a portion
        of
        the capital costs of a new project, the cash flow from the new project may
        be
        inadequate to cover the debt service.
  WEATHER
        CONDITIONS
  Due
        to
        the fact that a substantial portion of our revenues may be derived from
        construction operations, our business operations, revenues and operating
        income
        could be negatively affected by weather phenomenon such as but not limited
        to,
        hurricanes, monsoon rain seasons, droughts, excessive heat, wind-storms etc.
        Such weather phenomena could interfere with operations and disrupt delivery
        schedules and revenue streams. In addition, occurrences like those described
        above could negatively impact our customer’s ability to pay us, or interfere
        with financing operations within a specific region.
  INTERNATIONAL
  Foreign
        sales are expected to account for a portion of sales and revenue. Sales of
        products and services obtained outside the United States are typically
        negotiated, invoiced and paid in local currency. Changes in exchange rates
        may
        also adversely affect the ability of customers to purchase the Company’s
        products. Economic instability may have an adverse effect on the Company’s
        foreign sales. In addition, the Company’s international business strategy may
        require it to make significant investments outside of the United States.
  -19-
  **FORWARD-LOOKING
        INFORMATION**
  The
        statements contained herein and other information contained in this report
        maybe
        based, in part, on management’s estimates, projections, plans and judgments.
        These forward-looking statements are subject to certain risks and uncertainties
        that could cause actual results to differ materially from historical results
        or
        those anticipated. In this report, the words “anticipates”, “believes”,
“expects”, “intends”, “future”, “plans”, “targets” and similar expressions
        identify forward-looking statements. Readers are cautioned not to place undue
        reliance on the forward-looking statements contained herein. The Company
        undertakes no obligation to publicly revise these forward-looking statements
        to
        reflect events or circumstances that may arise after the date hereof.
        Additionally, these statements are based on certain assumptions that may
        prove
        to be erroneous and are subject to certain risks including, but not limited
        to,
        The Company’s dependence on limited cash resources, its dependence on certain
        key personnel within the Company, and its ability to raise additional capital.
        There are many companies participating in the building industry, many with
        resources greater than the Company. Greater competition for profitable
        operations can increase prices and make it more difficult to develop project
        at
        reasonable multiples of cash flow. The Company believes that it will be able
        to
        compete in this environment and will be able to find attractive investments;
        however, it is not possible to predict competition or the effect this will
        have
        on the Company’s operations. The Company’s operations are also significantly
        affected by factors, which are outside the control of the Company, including
        environmental and governmental regulations, as well as weather in the area
        of
        the Company’s operations. Accordingly, actual results may differ, possibly
        materially, from the predictions contained herein.
  **Item
        3.
        Evaluation of Disclosure Controls and Procedures**
  Our
          Chief
          Executive Officer and Chief Financial Officer evaluated the effectiveness
          of the
          Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and
          15d-15(e) under the the Securities Exchange Act of 1934, as of the end
          of the
          period covered by this report. Based on their evaluation, our Chief Executive
          Officer and Chief Financial Officer have concluded that as of the end of
          the
          period covered by this report, the Company’s disclosure controls and procedures
          were effective.
  No
          change in our internal control over
          financial reporting occurred during the period covered by this report that
          has
          materially affected, or is reasonably likely to materially affect, our
          internal
          control over financial reporting.
  -20-
  **PART
        II**
  Pursuant
        to the Instructions on Part II of the Form 10-QSB, Items 1, 3 and 5 are omitted.
  Item
        2.
        Changes in Securities
  None
  Item
        6
—Exhibits and Reports on Form 8-K
  (A)
        Exhibits
  Exhibit
                  31.1
              — Certification of Chief Executive Officer
                  of EarthBlock Technologies, Inc. required by Rule 13a — 14(1) or Rule 15d
                  — 14(a) of the Securities Exchange Act of 1934, as adopted pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.
  Exhibit
                  31.2
              — Certification of Chief Financial Officer
                  of EarthBlock Technologies, Inc. required by Rule 13a — 14(1) or Rule 15d
                  — 14(a) of the Securities Exchange Act of 1934, as adopted pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.
  Exhibit
                  32.1
              — Certification of Chief Executive Officer
                  of
                  EarthBlock Technologies, Inc. pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.
  Exhibit
                  32.2
              — Certification of Chief Financial Officer
                  of
                  EarthBlock Technologies, Inc. pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.
  (B)
        Reports on Form 8-K
  None
  -21-
   **SIGNATURES**
   Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.
  June
                  12,2007EARTHBLOCK
                  TECHNOLOGIES, INC.
                
                BY:
                  /s/ Gregory A. Pitner
                Gregory
                  A. Pitner
                CEO
                  and Chairman
  -22-