UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 COMMISSION FILE NUMBER 000-32473
 UNITED FUEL & ENERGY CORPORATION
  NEVADA
    
    91-2037688(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)1800 W. Katella Ave., Suite 102Orange, California
    
    92863(Address of principal executive offices)
    
    (Zip Code)
 (714) 923-3025
 þ o
 o þ
   Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ




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##### 



United Fuel & Energy Corporation
 
 PagePART I  FINANCIAL INFORMATION
    
    3Item 1 Financial Statements
    
    3Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    18Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    27Item 4T Controls and Procedures
    
    27PART II  OTHER INFORMATION
    
    29Item 1 Legal Proceedings
    
    29Item 1A
Risk Factors
    
    29Item 6 Exhibits
    
    30Signature
    
    33EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### 



PART 1. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 United Fuel & Energy Corporation
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCURRENT ASSETSCash
    
    $
    637
    
    
    $
    4,096Accounts receivable, net of allowance for
doubtful accounts of $1,800 and $2,046 at
September 30, 2008 and December 31, 2007,
respectively
    
    
    88,593
    
    
    
    91,031Other receivables
    
    
    1,549
    
    
    
    421Inventories, net of allowance
    
    
    13,682
    
    
    
    16,512Prepaid and other current assets
    
    
    1,181
    
    
    
    1,738Asset held for sale
    
    
    634
    
    
    
    Deferred tax
assets, net
    
    
    1,017
    
    
    
    417Total current assets
    
    
    107,293
    
    
    
    114,215PROPERTY, PLANT AND EQUIPMENT, net
    
    
    37,661
    
    
    
    41,606OTHER ASSETSCash value of life insurance
    
    
    2,902
    
    
    
    2,839Goodwill
    
    
    26,172
    
    
    
    24,844Debt issuance costs, net
    
    
    1,331
    
    
    
    1,857Deferred tax
assets, non current, net
    
    
    2,999
    
    
    
    2,626Other long-term assets
    
    
    1,261
    
    
    
    1,439Total other assets
    
    
    34,665
    
    
    
    33,605$
    179,619
    
    
    $
    189,426LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESCurrent maturities of long-term debt, other
    
    $
    3,547
    
    
    $
    3,605Accounts payable
    
    
    27,367
    
    
    
    25,602Accounts payable to related parties
    
    
    12,903
    
    
    
    21,563Accrued and other current liabilities
    
    
    6,424
    
    
    
    4,755Accrued income taxes
    
    
    
    
    
    
    1,563Total current liabilities
    
    
    50,241
    
    
    
    57,088OTHER LIABILITIESLong-term
debt  revolving line of credit
    
    
    69,928
    
    
    
    68,655Long-term debt, other less current maturities
    
    
    8,961
    
    
    
    11,896Life
insurance policy borrowings
    
    
    2,860
    
    
    
    Other liabilities
    
    
    1,614
    
    
    
    1,718Total other liabilities
    
    
    83,363
    
    
    
    82,269COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITYPreferred stock8% cumulative convertible
series A, $0.001 par value; 5,000,000 shares
authorized;
 12,435 issued and
outstanding at September 30, 2008 and
December 31, 2007
    
    
    
    
    
    
    Common stock  $0.001 par value; 55,000,000
shares authorized; 40,545,822 issued and
outstanding at September 30, 2008; 40,045,297 issued and outstanding at
December 31, 2007
    
    
    40
    
    
    
    40Paid-in capital
    
    
    54,662
    
    
    
    53,987Retained deficit
    
    
    (8,687
    )
    
    
    (3,958
    )Total stockholders equity
    
    
    46,015
    
    
    
    50,069$
    179,619
    
    
    $
    189,426
  3




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##### 



United Fuel & Energy Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RevenuesSales
    
    $
    228,686
    
    
    $
    96,836
    
    
    $
    675,755
    
    
    $
    260,185Other
    
    
    2,320
    
    
    
    522
    
    
    
    4,606
    
    
    
    2,802Total revenues
    
    
    231,006
    
    
    
    97,358
    
    
    
    680,361
    
    
    
    262,987Cost of sales
    
    
    211,835
    
    
    
    87,574
    
    
    
    630,449
    
    
    
    230,998Gross profit
    
    
    19,171
    
    
    
    9,784
    
    
    
    49,912
    
    
    
    31,989ExpensesOperating
    
    
    9,393
    
    
    
    6,435
    
    
    
    24,198
    
    
    
    17,571General and administrative
    
    
    5,848
    
    
    
    4,259
    
    
    
    23,590
    
    
    
    11,633Depreciation, amortization and accretion
    
    
    938
    
    
    
    712
    
    
    
    2,746
    
    
    
    1,905Total expenses
    
    
    16,179
    
    
    
    11,406
    
    
    
    50,534
    
    
    
    31,109Operating income (loss)
    
    
    2,992
    
    
    
    (1,622
    )
    
    
    (622
    )
    
    
    880Other income (expense)Interest expense
    
    
    (2,053
    )
    
    
    (1,346
    )
    
    
    (5,618
    )
    
    
    (3,599
    )Amortization of debt issuance costs
    
    
    (315
    )
    
    
    (98
    )
    
    
    (526
    )
    
    
    (325
    )Loss on disposal of assets
    
    
    (326
    )
    
    
    
    
    
    
    (326
    )
    
    
    Other income, net
    
    
    508
    
    
    
    132
    
    
    
    1,423
    
    
    
    308Total other expense
    
    
    (2,186
    )
    
    
    (1,312
    )
    
    
    (5,047
    )
    
    
    (3,616
    )Income (loss) before income taxes
    
    
    806
    
    
    
    (2,934
    )
    
    
    (5,669
    )
    
    
    (2,736
    )Income tax expense (benefit)
    
    
    731
    
    
    
    (1,090
    )
    
    
    (1,688
    )
    
    
    (977
    )Net income (loss)
    
    $
    75
    
    
    $
    (1,844
    )
    
    $
    (3,981
    )
    
    $
    (1,759
    )Cumulative preferred stock dividend
    
    $
    253
    
    
    $
    252
    
    
    $
    748
    
    
    $
    760Net
loss available to common
stockholders
    
    $
    (178
    )
    
    $
    (2,096
    )
    
    $
    (4,729
    )
    
    $
    (2,519
    )Net
loss per common share available to common stockholders:Basic and diluted
    
    $
    
    
    
    $
    (0.14
    )
    
    $
    (0.12
    )
    
    $
    (0.18
    )Weighted average common shares outstanding:Basic and diluted
    
    
    40,269
    
    
    
    14,794
    
    
    
    40,236
    
    
    
    14,330
  4




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##### 



United Fuel & Energy Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (3,981
    )
    
    $
    (1,759
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation, amortization and accretion
    
    
    2,746
    
    
    
    1,905Amortization of debt issuance costs
    
    
    526
    
    
    
    325Stock-based compensation expense
    
    
    362
    
    
    
    483Deferred income taxes
    
    
    (973
    )
    
    
    25Bad debt expense
    
    
    4,293
    
    
    
    Loss on disposal of assets
    
    
    326
    
    
    
    Impairment of goodwill
    
    
    275
    
    
    
    Changes in operating assets and liabilities, net of effects from acquisitions:Decrease (increase) in:Accounts receivable
    
    
    (1,855
    )
    
    
    (10,696
    )Other receivables
    
    
    (1,128
    )
    
    
    (701
    )Inventories
    
    
    2,830
    
    
    
    (1,353
    )Prepaid and other current assets
    
    
    557
    
    
    
    (936
    )Other long-term assets
    
    
    178
    
    
    
    (81
    )Increase (decrease) in:Accounts payable
    
    
    (6,895
    )
    
    
    9,731Accrued income taxes
    
    
    (1,676
    )
    
    
    (836
    )Accrued expenses and other current liabilities
    
    
    1,420
    
    
    
    107Net cash used in operating activities
    
    
    (2,995
    )
    
    
    (3,786
    )Cash flows from investing activities:Increase in cash surrender value of life insurance
    
    
    (63
    )
    
    
    (73
    )Proceeds from the sale of fixed assets
    
    
    136
    
    
    
    Your Pumps,
Inc. acquisition
    
    
    
    
    
    
    (1,328
    )Benton acquisition
    
    
    
    
    
    
    (456
    )Reamax Oil
Company, Inc. acquisition
    
    
    
    
    
    
    (7,835
    )Propane
Direct, LLC acquisition
    
    
    
    
    
    
    (2,397
    )Capital expenditures, net
    
    
    (1,491
    )
    
    
    (5,044
    )Net cash used in investing activities
    
    
    (1,418
    )
    
    
    (17,133
    )Cash flows from financing activities:Net borrowings on revolving line of credit
    
    
    1,273
    
    
    
    12,884Issuance of new debt
    
    
    6,500
    
    
    
    10,490Repayment of debt
    
    
    (9,493
    )
    
    
    (3,711
    )Debt issuance costs
    
    
    
    
    
    
    (1,692
    )Proceeds from exercised warrants
    
    
    313
    
    
    
    Life
insurance policy borrowings
    
    
    2,860
    
    
    
    Preferred stock dividends paid
    
    
    (499
    )
    
    
    (504
    )Proceeds from issuance of capital stock, net of issuance costs
    
    
    
    
    
    
    (2
    )Net cash provided by financing activities
    
    
    954
    
    
    
    17,465Net decrease in cash and cash equivalents
    
    
    (3,459
    )
    
    
    (3,454
    )Cash at beginning of period
    
    
    4,096
    
    
    
    3,951Cash at end of period
    
    $
    637
    
    
    $
    497Cash paid during period for:Interest
    
    $
    6,989
    
    
    $
    3,224Income taxes
    
    $
    477
    
    
    $
    484
  5




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Non-cash investing and financing activities
    6




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##### 



United Fuel & Energy Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2008
(Unaudited)
 NOTE 1  GENERAL
      1-for-40
     7




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##### 



Reclassifications
  NOTE 2  Recent Accounting Standards
      8




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##### 



NOTE 3  ACQUISITIONS
    9




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##### 



NOTE 4
 SELECTED BALANCE SHEET COMPONENTS
 Asset
Held for Sale
  Accrued
and Other Current Liabilities
  September 30,
    
    
    December 31,2008
    
    
    2007Payroll and benefits
    
    $
    3,420
    
    
    $
    1,958Sales and motor vehicles fuel tax
    
    
    1,511
    
    
    
    1,406Interest
    
    
    582
    
    
    
    533Dividend
    
    
    249
    
    
    
    246Other
    
    
    662
    
    
    
    612$
    6,424
    
    
    $
    4,755
 NOTE 5  DEBT PAYABLE
  September 30,
    
    
    December 31,2008
    
    
    2007Long-term
debt
    
    $
    69,928
    
    
    $
    68,655Term loans
    
    
    7,047
    
    
    
    8,1712004 term loan payable to a bank
    
    
    2,477
    
    
    
    3,0662005 term loan payable to a bank
    
    
    734
    
    
    
    867Note payable to a supplier
    
    
    54
    
    
    
    214Note payable
to shareholder of Reamax Oil Company, Inc.
    
    
    635
    
    
    
    1,282Other notes payable
    
    
    1,561
    
    
    
    1,901Total
long-term debt, other
    
    
    12,508
    
    
    
    15,501Less current maturities
    
    
    (3,547
    )
    
    
    (3,605
    )Long-term debt, other
    
    $
    8,961
    
    
    $
    11,896
   10




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11




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##### 



2009
    
    $
    3,5472010
    
    
    3,9322011
    
    
    2,3572012
    
    
    69,9922013
    
    
    1,529Thereafter
    
    
    1,079Total long-term debt
    
    $
    82,436
 NOTE 6  ASSET RETIREMENT OBLIGATIONS
    2008
    
    
    2007Asset retirement obligation, January 1
    
    $
    184
    
    
    $
    172Accretion expense
    
    
    10
    
    
    
    9Asset retirement obligation, September 30
    
    $
    194
    
    
    $
    181
 12




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NOTE 7  COMMITMENTS AND CONTINGENCIES
  13




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##### 



NOTE 8  EARNINGS PER SHARE INFORMATION
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income
(loss)
    
    $
    75
    
    
    $
    (1,844
    )
    
    $
    (3,981
    )
    
    $
    (1,759
    )Cumulative
preferred stock dividend
    
    $
    253
    
    
    $
    252
    
    
    $
    748
    
    
    $
    760Net loss available to common
stockholders
    
    $
    (178
    )
    
    $
    (2,096
    )
    
    $
    (4,729
    )
    
    $
    (2,519
    )Denominator:Denominator for
basic and diluted
earnings per share
- weighted average
number of common
shares
    
    
    40,269
    
    
    
    14,794
    
    
    
    40,236
    
    
    
    14,330Net
loss per share available to common stockholders:Basic and diluted
    
    $
    
    
    
    $
    (0.14
    )
    
    $
    (0.12
    )
    
    $
    (0.18
    )
      NOTE 9  STOCKHOLDERS EQUITY
 Preferred Stock
  14




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##### 



Stock Warrants
   Number of
    
    
    
    ExerciseWarrants
    
    
    
    Price
    
    Expiration350,000
    
    
    
    
    $
    2.00
    
    
    
    20091,093,333
    
    
    
    
    
    1.50
    
    
    
    2010200,000
    
    
    
    
    
    1.75
    
    
    
    2010225,000
    
    
    
    
    
    2.00
    
    
    
    2010543,334
    
    
    
    
    
    1.65
    
    
    
    20112,411,667
  Stock Options
  WeightedAverageWeighted
    
    RemainingNumber
    
    Average
    
    Contractual
    
    Aggregateof
    
    Exercise Price
    
    Term
    
    IntrinsicShares
    
    Per Share
    
    (In Years)
    
    ValueOutstanding at January 1, 2008
    
    
    2,038,166
    
    
    $
    1.48Granted
    
    
    550,000
    
    
    
    0.96Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (677,666
    )
    
    
    1.53Outstanding at September 30, 2008
    
    
    1,910,500
    
    
    
    1.31
    
    
    
    8.3
    
    
    $
    Vested and expected to vest in the future
    
    
    1,204,667
    
    
    
    1.31
    
    
    
    8.0
    
    
    $
    Exercisable
    
    
    979,667
    
    
    
    1.46
    
    
    
    7.5
    
    
    $
    
 15




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##### 



Nine Months Ended September 30,2008
    
    2007Expected average life of option
    
    6.0 years
    
    
    
    5.0 to 6.5 yearsRisk-free interest rate
    
    2.71% to 3.18
    %
    
    3.84% to 4.37
    %Expected volatility
    
    41.93% to 44.85
    %
    
    
    26.03
    %Expected dividend yield
    
    
    
    
    
    
 Expected volatility:
 Expected term:
 Risk-free interest rate:
   Weighted AverageRemainingContractual Life
    
    OptionsExercise Price
    
    Options Outstanding
    
    
    
    (In years)
    
    Exercisable$
    0.55
    
    
    
    100,000
    
    
    
    
    
    10.0
    
    
    
    $
    0.70
    
    
    
    150,000
    
    
    
    
    
    10.0
    
    
    
    $
    1.05
    
    
    
    200,000
    
    
    
    
    
    8.9
    
    
    
    66,667$
    1.22
    
    
    
    300,000
    
    
    
    
    
    9.5
    
    
    
    50,000$
    1.47
    
    
    
    440,828
    
    
    
    
    
    7.0
    
    
    
    440,828$
    1.50
    
    
    
    320,500
    
    
    
    
    
    7.4
    
    
    
    233,000$
    1.53
    
    
    
    100,000
    
    
    
    
    
    8.5
    
    
    
    50,000$
    1.58
    
    
    
    200,000
    
    
    
    
    
    8.8
    
    
    
    66,667$
    1.67
    
    
    
    40,000
    
    
    
    
    
    8.8
    
    
    
    13,333$
    1.69
    
    
    
    59,172
    
    
    
    
    
    7.0
    
    
    
    59,1721,910,500
    
    
    
    
    
    8.3
    
    
    
    979,667
 Restricted Stock Awards
  16




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##### 



WeightedNumber
    
    Averageof
    
    Grant DateShares
    
    Fair ValueUnvested at January 1, 2008
    
    
    115,000
    
    
    $
    1.20Issued
    
    
    292,192
    
    
    $
    .84Vested
    
    
    (129,692
    )
    
    $
    1.11Unvested at September 30, 2008
    
    
    277,500
    
    
    $
    .86
  NOTE 10  INCOME TAXES
  NOTE 11  CONCENTRATION OF CREDIT RISK
  NOTE 12  TRANSACTIONS WITH RELATED PARTIES
      17




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##### 



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Forward-Looking Statements
  Overview
   Debt Refinancing
  18




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##### 



Critical Accounting Policies
  Acquisitions
      19




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##### 



Commitments and Contingencies
  Results of Operations
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Sales
    
    $
    228,686
    
    
    $
    96,836
    
    
    $
    675,755
    
    
    $
    260,185Other
    
    
    2,320
    
    
    
    522
    
    
    
    4,606
    
    
    
    2,802Total revenue
    
    $
    231,006
    
    
    $
    97,358
    
    
    $
    680,361
    
    
    $
    262,987Cost of sales
    
    $
    211,835
    
    
    $
    87,574
    
    
    $
    630,449
    
    
    $
    230,998Gross profit
    
    $
    19,171
    
    
    $
    9,784
    
    
    $
    49,912
    
    
    $
    31,989Operating
    
    $
    9,393
    
    
    $
    6,435
    
    
    $
    24,198
    
    
    $
    17,571General and administrative
    
    
    5,848
    
    
    
    4,259
    
    
    
    23,590
    
    
    
    11,633Depreciation, amortization and accretion
    
    
    938
    
    
    
    712
    
    
    
    2,746
    
    
    
    1,905Total expenses
    
    $
    16,179
    
    
    $
    11,406
    
    
    $
    50,534
    
    
    $
    31,109
 Three Months Ended September 30, 2008 Compared to Three Months Ended September 30, 2007
 Sales
and other revenues
 Cost of sales and gross profit
 20




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##### 



Operating expenses
 General and administrative expenses
  Interest and amortization of debt issuance costs.
  Other income (loss), net.
 Income
tax expense (benefit)
 Nine Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
 Sales
and other revenues
 Cost of
sales and gross profit
 Operating expenses
 21




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##### 



General and administrative expenses
 22




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##### 



Interest and amortization of debt issuance costs
 Other income (loss), net
 Income
tax expense (benefit)
 Liquidity and Capital Resources
 General
     Net Cash Used In Operating Activities
  23




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##### 



Net Cash Used in Investing Activities
  Net Cash Provided by Financing Activities
      24




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##### 



25




---



##### 



Capital Expenditures
  Recent Accounting Pronouncements
      26




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##### 



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4T. CONTROLS AND PROCEDURES
 (a) Disclosure Controls and Procedures
 27




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(b) Changes in Internal Control Over Financial Reporting
  28




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PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM
1A.  RISK FACTORS
  The global financial crisis may have an impact on our business and financial condition in ways that we currently cannot predict.
   29




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ITEM 6. EXHIBITS
 Exhibit
    
    Description2.1
    
    Agreement and Plan of Merger by and among the Registrant, Brands
United Merger Sub, and United Fuel & Energy Corporation
(Incorporated by reference from our Definitive Proxy Statement on
Schedule 14C filed on January 6, 2005).2.2
    
    Asset Purchase Agreement dated as of March 2, 2005 among the
Company, Clark Oil Company, William H. Clark, Jr. and Martin T.
Clark (Incorporated by reference from our Form 8-K filed on March
8, 2005).2.3
    
    Asset Purchase Agreement, dated February 1, 2006, by and among
Eddins-Walcher Company, Queen Oil & Gas Company, each stockholder
of seller (as listed therein) and United Fuel & Energy Corporation
(for the purpose of agreeing to execute an unconditional guaranty)
(Incorporated by reference from our Current Form 8-K filed on
February 3, 2006).2.4
    
    Addendum to the Asset Purchase Agreement, dated March 10, 2006, by
and among Eddins-Walcher Company, Queen Oil & Gas Company, each
stockholder of seller (as listed therein) and United Fuel & Energy
Corporation (Incorporated by reference from our Current Form 8-K
filed on March 15, 2006).2.5
    
    Asset Purchase Agreement, dated February 28, 2007, by and among
Eddins-Walcher Company, a Texas corporation, Reamax Oil Company,
Inc., an Arizona corporation, Wayne Transportation, Inc., an
Arizona corporation, Harry Wayne Monasmith, Jr., an individual,
and Relynn G. Monasmith, an individual (Incorporated by reference
from our Form 8-K filed on March 6, 2007).2.6
    
    Agreement and Bill of Sale, dated May 31, 2007, by and among
United Fuel & Energy Corporation, a Texas corporation, Propane
Direct, LLC, an Oklahoma limited liability company, and each of
its members (Incorporated by reference from our Form 8-K filed on
June 6, 2007).2.7
    
    Mutual Stock Purchase Agreement dated September 14, 2007, by and
among United Fuel & Energy Corporation, Cardlock Fuels System,
Inc., Frank P. Greinke, and Frank P. Greinke, as Trustee under the
Greinke Business Living Trust (Incorporated by reference from our
Form 8-K filed on September 18, 2007).3.1
    
    Articles of Incorporation (Incorporated by reference from our
Registration Statement on Form 10-SB filed on March 21, 2001).3.2
    
    Certificate of Amendment to Articles of Incorporation filed on or
about October 29, 2001 (Incorporated by reference from our Form
10-QSB filed on November 19, 2001).3.3
    
    Articles of Merger (Incorporated by reference from our Annual
Report on Form 10-kSB/A filed on November 18, 2004).3.4
    
    Certificate of Amendment to Articles of Incorporation filed on
August 30, 2004 (Incorporated by reference from our Quarterly
Report on Form 10-QSB filed on November 18, 2004).3.5
    
    Certificate of Amendment to Articles of Incorporation filed on
January 31, 2005 (Incorporated by reference from our Annual Report
of Form 10-K filed on December 31, 2005).3.6
    
    Certificate of Change to Articles of Incorporation filed on
January 31, 2005 (Incorporated by reference from our Annual Report
of Form 10-K filed on December 31, 2005).3.7
    
    Certificate of Amendment to Articles of Incorporation September 6,
2007 (Incorporated by reference from our Quarterly Report on Form
10-Q filed on September 20, 2007).3.8
    
    Corporate Bylaws (Incorporated by reference from our Registration
Statement on Form 10-SB filed on March 21, 2001).
 30




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Exhibit
    
    Description3.9
    
    Certificate of Designation for the Series A Preferred Stock filed
on March 30, 2006 (Incorporated by reference from our Form 8-K
filed on April 4, 2006).4.1
    
    Warrant Agreement dated September 27, 2004 between Steve Antebi
and the Company (Incorporated by reference from our Form 10-Q
filed on May 16, 2005).4.2
    
    Form of Registration Rights Agreement between the Company and
Purchasers of the Companys Preferred Stock (Incorporated by
reference from our Form 10-Q filed on May 16, 2005).4.3
    
    Form of Warrant issued to the certain Purchasers (as defined
therein), dated June 2005 (Incorporated by reference from our Form
10-Q filed on August 17, 2005).4.4
    
    Form of Registration Rights Agreement dated June 2005 by and
between the Company and the Purchasers of the Companys common
stock (as defined therein) (Incorporated by reference from our
Form 10-Q filed on August 17, 2005).4.5
    
    Form of Warrants issued to Financial Advisors (Incorporated by
reference from our Annual Report on Form 10-K for the year ended
December 31, 2005).4.6
    
    Form of Registration Rights Agreement dated March 9, 2006 by and
between United Fuel & Energy Corporation and the Purchasers of the
United Fuel & Energys common stock (Incorporated by reference
from our Current Form 8-K filed on March 15, 2006).4.7
    
    Form of Registration Rights Agreement by and between United Fuel &
Energy Corporation and the Purchasers of the United Fuel &
Energys Series A Preferred Stock (Incorporated by reference from
our Form 8-K filed on April 4, 2006).4.8
    
    Form of Warrant issued to Sanders Morris Harris, Inc.
(Incorporated by reference from our Form 8-K filed on May 1,
2006).4.9
    
    Form of Registration Rights Agreement by and between United Fuel &
Energy Corporation and the certain purchasers of shares of United
Fuel & Energys common stock from Thomas E. Kelly (Incorporated by
reference from Exhibit 4.9 of our Form S-3 filed on June 23,
2006).4.10
    
    Form of Registration Rights Agreement by and between United Fuel &
Energy Corporation and the certain purchasers of shares of United
Fuel & Energys common stock from Thomas E. Kelly (Incorporated by
reference from Exhibit 4.10 of our Form S-3 filed on June 23,
2006).4.11
    
    Stockholders Agreement dated October 5, 2007, by and among United
Fuel & Energy Corporation, a Nevada corporation, Frank P. Greinke,
Frank P. Greinke, as Trustee under the Greinke Business Living
Trust dated April 20, 1999, Thomas E. Kelley, Falcon Seaboard
Investment Company, L.P., and Charles McArthur (Incorporated by
reference from our Form 8-K filed on October 11, 2007).4.12
    
    Registration Rights Agreement dated October 5, 2007, by and
between United Fuel & Energy Corporation, a Nevada corporation,
and Frank P. Greinke, as Trustee under the Greinke Business Living
Trust dated April 20, 1999 (Incorporated by reference from our
Form 8-K filed October 11, 2007).
 31




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##### 



Exhibit
    
    Description10.1
    
    Seventh Amendment to Second Amended and Restated Financing
Agreement dated August 8, 2008, by and among The CIT
Group/Business Credit, Inc., Wachovia Bank, N.A., PNC Bank,
National Association, SunTrust Bank, The Greinke Personal Living
Trust, Frank P. Greinke, Trustee, United Fuel & Energy
Corporation, a Texas corporation, Three D Oil Co. of Kilgore,
Inc., Cardlock Fuels System, Inc., and United Fuel & Energy
Corporation, a Nevada corporation (Incorporated by reference from
our Form 8-K filed on August 11, 2008).10.2
    
    Employment Agreement dated September 16, 2008 by and between
United Fuel & Energy Corporation and William C. Bousema
(Incorporated by reference from our Form 8-K filed on September
18, 2008).10.3
    
    Incentive Stock Option Agreement dated September 16, 2008 by and
between United Fuel & Energy Corporation and William C. Bousema
(Incorporated by reference from our Form 8-K filed on September
18, 2008).10.4
    
    Restricted Stock Agreement dated September 16, 2008 by and between
United Fuel & Energy Corporation and William C. Bousema
(Incorporated by reference from our Form 8-K filed on September
18, 2008).10.5
    
    Indemnification Agreement dated September 16, 2008 by and between
United Fuel & Energy Corporation and William C. Bousema
(Incorporated by reference from our Form 8-K filed on September
18, 2008).31.1
    
    Certification of the Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002*31.2
    
    Certification of the Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002*32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002*
 
 *
    
    filed herein 32




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##### 



SIGNATURES
  UNITED FUEL & ENERGY CORPORATIONNovember 14, 2008
    
    by:
    
    /s/ William C. BousemaWilliam C. Bousema, CPAExecutive Vice President and Chief Financial
Officer
 33




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##### 



Exhibit
    
    Description2.1
    
    Agreement and Plan of Merger by and among the Registrant,
Brands United Merger Sub, and United Fuel & Energy Corporation
(Incorporated by reference from our Definitive Proxy Statement
on Schedule 14C filed on January 6, 2005).2.2
    
    Asset Purchase Agreement dated as of March 2, 2005 among the
Company, Clark Oil Company, William H. Clark, Jr. and Martin
T. Clark (Incorporated by reference from our Form 8-K filed on
March 8, 2005).2.3
    
    Asset Purchase Agreement, dated February 1, 2006, by and among
Eddins-Walcher Company, Queen Oil & Gas Company, each
stockholder of seller (as listed therein) and United Fuel &
Energy Corporation (for the purpose of agreeing to execute an
unconditional guaranty) (Incorporated by reference from our
Current Form 8-K filed on February 3, 2006).2.4
    
    Addendum to the Asset Purchase Agreement, dated March 10,
2006, by and among Eddins-Walcher Company, Queen Oil & Gas
Company, each stockholder of seller (as listed therein) and
United Fuel & Energy Corporation (Incorporated by reference
from our Current Form 8-K filed on March 15, 2006).2.5
    
    Asset Purchase Agreement, dated February 28, 2007, by and
among Eddins-Walcher Company, a Texas corporation, Reamax Oil
Company, Inc., an Arizona corporation, Wayne Transportation,
Inc., an Arizona corporation, Harry Wayne Monasmith, Jr., an
individual, and Relynn G. Monasmith, an individual
(Incorporated by reference from our Form 8-K filed on March 6,
2007).2.6
    
    Agreement and Bill of Sale, dated May 31, 2007, by and among
United Fuel & Energy Corporation, a Texas corporation, Propane
Direct, LLC, an Oklahoma limited liability company, and each
of its members (Incorporated by reference from our Form 8-K
filed on June 6, 2007).2.7
    
    Mutual Stock Purchase Agreement dated September 14, 2007, by
and among United Fuel & Energy Corporation, Cardlock Fuels
System, Inc., Frank P. Greinke, and Frank P. Greinke, as
Trustee under the Greinke Business Living Trust (Incorporated
by reference from our Form 8-K filed on September 18, 2007).3.1
    
    Articles of Incorporation (Incorporated by reference from our
Registration Statement on Form 10-SB filed on March 21, 2001).3.2
    
    Certificate of Amendment to Articles of Incorporation filed on
or about October 29, 2001 (Incorporated by reference from our
Form 10-QSB filed on November 19, 2001).3.3
    
    Articles of Merger (Incorporated by reference from our Annual
Report on Form 10-kSB/A filed on November 18, 2004).3.4
    
    Certificate of Amendment to Articles of Incorporation filed on
August 30, 2004 (Incorporated by reference from our Quarterly
Report on Form 10-QSB filed on November 18, 2004).3.5
    
    Certificate of Amendment to Articles of Incorporation filed on
January 31, 2005 (Incorporated by reference from our Annual
Report of Form 10-K filed on December 31, 2005).3.6
    
    Certificate of Change to Articles of Incorporation filed on
January 31, 2005 (Incorporated by reference from our Annual
Report of Form 10-K filed on December 31, 2005).3.7
    
    Certificate of Amendment to Articles of Incorporation
September 6, 2007 (Incorporated by reference from our
Quarterly Report on Form 10-Q filed on September 20, 2007).3.8
    
    Corporate Bylaws (Incorporated by reference from our
Registration Statement on Form 10-SB filed on March 21, 2001).




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##### 



Exhibit
    
    Description3.9
    
    Certificate of Designation for the Series A Preferred Stock filed on March
30, 2006 (Incorporated by reference from our Form 8-K filed on April 4,
2006).4.1
    
    Warrant Agreement dated September 27, 2004 between Steve Antebi and the
Company (Incorporated by reference from our Form 10-Q filed on May 16,
2005).4.2
    
    Form of Registration Rights Agreement between the Company and Purchasers of
the Companys Preferred Stock (Incorporated by reference from our Form 10-Q
filed on May 16, 2005).4.3
    
    Form of Warrant issued to the certain Purchasers (as defined therein),
dated June 2005 (Incorporated by reference from our Form 10-Q filed on
August 17, 2005).4.4
    
    Form of Registration Rights Agreement dated June 2005 by and between the
Company and the Purchasers of the Companys common stock (as defined
therein) (Incorporated by reference from our Form 10-Q filed on August 17,
2005).4.5
    
    Form of Warrants issued to Financial Advisors (Incorporated by reference
from our Annual Report on Form 10-K for the year ended December 31, 2005).4.6
    
    Form of Registration Rights Agreement dated March 9, 2006 by and between
United Fuel & Energy Corporation and the Purchasers of the United Fuel &
Energys common stock (Incorporated by reference from our Current Form 8-K
filed on March 15, 2006).4.7
    
    Form of Registration Rights Agreement by and between United Fuel & Energy
Corporation and the Purchasers of the United Fuel & Energys Series A
Preferred Stock (Incorporated by reference from our Form 8-K filed on April
4, 2006).4.8
    
    Form of Warrant issued to Sanders Morris Harris, Inc. (Incorporated by
reference from our Form 8-K filed on May 1, 2006).4.9
    
    Form of Registration Rights Agreement by and between United Fuel & Energy
Corporation and the certain purchasers of shares of United Fuel & Energys
common stock from Thomas E. Kelly (Incorporated by reference from Exhibit
4.9 of our Form S-3 filed on June 23, 2006).4.10
    
    Form of Registration Rights Agreement by and between United Fuel & Energy
Corporation and the certain purchasers of shares of United Fuel & Energys
common stock from Thomas E. Kelly (Incorporated by reference from Exhibit
4.10 of our Form S-3 filed on June 23, 2006).4.11
    
    Stockholders Agreement dated October 5, 2007, by and among United Fuel &
Energy Corporation, a Nevada corporation, Frank P. Greinke, Frank P.
Greinke, as Trustee under the Greinke Business Living Trust dated April 20,
1999, Thomas E. Kelley, Falcon Seaboard Investment Company, L.P., and
Charles McArthur (Incorporated by reference from our Form 8-K filed on
October 11, 2007).4.12
    
    Registration Rights Agreement dated October 5, 2007, by and between United
Fuel & Energy Corporation, a Nevada corporation, and Frank P. Greinke, as
Trustee under the Greinke Business Living Trust dated April 20, 1999
(Incorporated by reference from our Form 8-K filed October 11, 2007).




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##### 



Exhibit
    
    Description10.1
    
    Seventh Amendment to Second Amended and Restated Financing Agreement dated
August 8, 2008, by and among The CIT Group/Business Credit, Inc., Wachovia
Bank, N.A., PNC Bank, National Association, SunTrust Bank, The Greinke
Personal Living Trust, Frank P. Greinke, Trustee, United Fuel & Energy
Corporation, a Texas corporation, Three D Oil Co. of Kilgore, Inc.,
Cardlock Fuels System, Inc., and United Fuel & Energy Corporation, a Nevada
corporation (Incorporated by reference from our Form 8-K filed on August
11, 2008).10.2
    
    Employment Agreement dated September 16, 2008 by and between United Fuel &
Energy Corporation and William C. Bousema (Incorporated by reference from
our Form 8-K filed on September 18, 2008).10.3
    
    Incentive Stock Option Agreement dated September 16, 2008 by and between
United Fuel & Energy Corporation and William C. Bousema (Incorporated by
reference from our Form 8-K filed on September 18, 2008).10.4
    
    Restricted Stock Agreement dated September 16, 2008 by and between United
Fuel & Energy Corporation and William C. Bousema (Incorporated by reference
from our Form 8-K filed on September 18, 2008).10.5
    
    Indemnification Agreement dated September 16, 2008 by and between United
Fuel & Energy Corporation and William C. Bousema (Incorporated by reference
from our Form 8-K filed on September 18, 2008).31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*31.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*32.2
    
    Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
 
 *
    
    filed herein