UNITED
      STATES




**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


**________________________________**





**FORM
      10-Q**





(MARK
      ONE)





x QUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
      EXCHANGE ACT OF 1934





FOR
      THE
      QUARTERLY PERIOD ENDED March 31, 2008





OR





o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      AND EXCHANGE ACT OF 1934





COMMISSION
      FILE NUMBER: 0-12627








**GLOBAL
      CLEAN ENERGY HOLDINGS, INC.**


(Exact
      name of registrant as specified in its charter)





**Utah**
            
            **87-0407858**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                Number)**6033
                W. Century Blvd, Suite 1090,**
              **Los
                Angeles, California 90045**(Address
                of principal executive offices)**(310)
                670-7911**Issuer’s
                telephone number:





MEDICAL
      DISCOVERIES, INC.





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





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
xNo
o.





Indicate
      by check mark whether the registrant is a large accelerated filer, a
      non-accelerated filer, or a smaller reporting company.


Large
                  accelerated filer o
              Accelerated
                  filer oNon-accelerated
                  filer o
              Smaller
                  reporting company x




Indicate
      the number of shares outstanding of each of the registrant's classes of common
      stock, as of the latest practicable date:


As
      of May
      8, 2008, the issuer had 226,603,560 shares of common stock outstanding, which
      includes 9,135,037 shares of common stock currently held in escrow.





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act):


Yes
oNo
x











**GLOBAL
      CLEAN ENERGY HOLDINGS, INC.**


**For
      the quarter ended March 31, 2008**


**FORM
      10-Q**





**TABLE
      OF CONTENTS**







**PART
      I**




ITEM
                    1.
                FINANCIAL
                    STATEMENTS
                1ITEM
                    2.
                MANAGEMENT’S
                    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                    OPERATIONS
                17ITEM
                    3.
                QUANTITATIVE
                    AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK
                22ITEM
                    4T.
                CONTROLS
                    AND PROCEDURES
                22**PART
                    II**ITEM
                    1.
                LEGAL
                    PROCEEDINGS
                23ITEM
                    1.A
                RISK
                    FACTORS
                23ITEM
                    2.
                UNREGISTERED
                    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
                31ITEM
                    3.
                DEFAULTS
                    UPON SENIOR SECURITIES
                31ITEM
                    4.
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY HOLDERS
                32ITEM
                    5.
                OTHER
                    INFORMATION
                32ITEM
                    6.
                EXHIBITS
                33







**PART
      I**




**ITEM
      1.**  **FINANCIAL
      STATEMENTS** .


**GLOBAL
                  CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES****FORMERLY
                  KNOWN AS MEDICAL DISCOVERIES, INC.****(A
                  Development Stage Company)****CONDENSED
                  CONSOLIDATED BALANCE SHEETS****(Unaudited)**


**March
                  31,**
              
              **December
                  31,****2008**
              
              **2007****ASSETS****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              260,465
              
              $
              805,338Subscription
                  receivable
              
              
              -
              
              
              75,000Prepaid
                  expenses
              
              
              41,363
              
              
              51,073**Total
                  Current Assets**
              
              
              301,828
              
              
              931,411**Plantation
                  development costs and equipment, net**
              
              
              552,954
              
              
              309,341**TOTAL
                  ASSETS**
              
              $
              854,782
              
              $
              1,240,752**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              1,343,143
              
              $
              1,243,877Accrued
                  payroll and payroll taxes
              
              
              949,587
              
              
              950,971Accrued
                  interest payable
              
              
              315,011
              
              
              300,651Secured
                  promissory note
              
              
              200,000
              
              
              250,000Notes
                  payable to shareholders
              
              
              56,000
              
              
              56,000Convertible
                  notes payable
              
              
              193,200
              
              
              193,200Financial
                  instrument
              
              
              -
              
              
              2,166,514Current
                  liabilities associated with assets held for sale
              
              
              3,361,551
              
              
              3,113,970**Total
                  Current Liabilities**
              
              
              6,418,492
              
              
              8,275,183**STOCKHOLDERS'
                  DEFICIT**Preferred
                  stock - no par value; 50,000,000 shares authorizedSeries
                  A, convertible; 28,928 shares issued and outstanding(aggregate
                  liquidation preference of $2,892,800)
              
              
              514,612
              
              
              514,612Series
                  B, convertible; 13,000 shares issued or subscribed(aggregate
                  liquidation preference of $1,300,000)
              
              
              1,290,735
              
              
              1,290,735Common
                  stock, no par value; 500,000,000 shares authorized;
                  174,838,967shares
                  issued and outstanding
              
              
              16,526,570
              
              
              16,526,570Additional
                  paid-in capital
              
              
              3,713,352
              
              
              1,472,598Deficit
                  accumulated prior to the development stage
              
              
              (1,399,577
              )
              
              (1,399,577
              )Deficit
                  accumulated during the development stage
              
              
              (26,209,402
              )
              
              (25,439,369
              )**Total
                  Stockholders' Deficit**
              
              
              (5,563,710
              )
              
              (7,034,431
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT**
              
              $
              854,782
              
              $
              1,240,752   The
          accompanying notes are an integral part of these condensed consolidated
          financial statements
  1


**GLOBAL
                  CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES****FORMERLY
                  KNOWN AS MEDICAL DISCLOVERIES, INC.****(A
                  Development Stage Company)****CONDENSED
                  CONSOLIDATED STATEMENTS OF OPERATIONS****(Unaudited)**


**From
                  Inception of****the
                  Development Stage****For
                  the Three Months Ended**
              
              ******on
                  November 20, 1991****March
                  31,**
              
              **through****2008**
              
              **2007**
              
              **March
                  31, 2008**Operating
                  ExpensesGeneral
                  and administrative
              
              $
              511,025
              
              $
              251,327
              
              $
              8,411,583Research
                  and development
              
              
              -
              
              
              -
              
              
              986,584Loss
                  from Operations
              
              
              (511,025
              )
              
              (251,327
              )
              
              (9,398,167
              )Other
                  Income (Expenses)Unrealized
                  gain on financial instrument
              
              
              5,469
              
              
              194,019
              
              
              4,722,632Interest
                  income
              
              
              3,863
              
              
              148
              
              
              66,468Interest
                  expense
              
              
              (15,030
              )
              
              (7,740
              )
              
              (1,252,579
              )Interest
                  expense from amortization of discounton
                  secured promissory note
              
              
              -
              
              
              -
              
              
              (250,000
              )Gain
                  on debt restructuring
              
              
              -
              
              
              -
              
              
              2,524,787Other
                  income
              
              
              -
              
              
              -
              
              
              906,485Total
                  Other Income (Expenses)
              
              
              (5,698
              )
              
              186,427
              
              
              6,717,793Loss
                  from Continuing Operations
              
              
              (516,723
              )
              
              (64,900
              )
              
              (2,680,374
              )Loss
                  from Discontinued Operations
              
              
              (253,310
              )
              
              (109,163
              )
              
              (22,836,829
              )Net
                  Loss
              
              
              (770,033
              )
              
              (174,063
              )
              
              (25,517,203
              )Preferred
                  stock dividend from beneficialconversion
                  feature
              
              
              -
              
              
              -
              
              
              (692,199
              )Net
                  Loss Applicable to Common Shareholders
              
              $
              (770,033
              )
              $
              (174,063
              )
              $
              (26,209,402
              )Basic
                  and Diluted Loss per Common Share:Loss
                  from Continuing Operations
              
              $
              (0.003
              )
              $
              (0.000
              )Loss
                       from Discontinued Operations
              
              $
              (0.001
              )
              $
              (0.001
              )Net
                  loss
              
              $
              (0.004
              )
              $
              (0.001
              )Basic
                  and Diluted Weighted-Average CommonShares
                  Outstanding
              
              
              174,838,967
              
              
              118,357,704





The
      accompanying notes are an integral part of these condensed consolidated
      financial statements




2


**GLOBAL
                  CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES****FORMERLY
                  KNOWN AS MEDICAL DISCOVERIES, INC.****(A
                  Development Stage Company)****CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH FLOWS****(Unaudited)**


**From
                  Inception of****the
                  Development Stage****For
                  the Three Months Ended**
              
              **on
                November 20, 1991****March
                  31,**
              
              **through****2008**
              
              **2007**
              
              **March
                  31, 2008****Cash
                  Flows From Operating Activities**Net
                  loss
              
              $
              (770,033
              )
              $
              (174,063
              )
              $
              (25,517,203
              )Adjustments
                  to reconcile net loss to net cash provided by (used in)operating
                  activitiesForeign
                  currency transaction loss
              
              
              253,310
              
              
              34,058
              
              
              610,701Gain
                  on debt restructuring
              
              
              -
              
              
              -
              
              
              (2,524,787
              )Share-based
                  compensation for services, expenses, litigation,and
                  research and development
              
              
              79,709
              
              
              292,000
              
              
              12,422,450Commitment
                  for research and development obligation
              
              
              -
              
              
              -
              
              
              2,378,445Depreciation
              
              
              56
              
              
              4,457
              
              
              137,722Reduction
                  of escrow receivable from research and development
              
              
              -
              
              
              -
              
              
              272,700Unrealized
                  gain on financial instrument
              
              
              (5,469
              )
              
              (194,019
              )
              
              (4,722,632
              )Interest
                  expense from amortization of discount on securedpromissory
                  note
              
              
              -
              
              
              -
              
              
              250,000Reduction
                  of legal costs
              
              
              -
              
              
              -
              
              
              (130,000
              )Write-off
                  of subscriptions receivable
              
              
              -
              
              
              -
              
              
              112,500Impairment
                  loss on assets
              
              
              -
              
              
              -
              
              
              9,709Gain
                  on disposal of assets, net of losses
              
              
              -
              
              
              -
              
              
              (228,445
              )Write-off
                  of receivable
              
              
              -
              
              
              -
              
              
              562,240Note
                  payable issued for litigation
              
              
              -
              
              
              -
              
              
              385,000Changes
                  in operating assets and liabilitiesAccounts
                  receivable
              
              
              -
              
              
              -
              
              
              (7,529
              )Prepaid
                  expenses
              
              
              9,710
              
              
              -
              
              
              (41,363
              )Accounts
                  payable and accrued expenses
              
              
              106,513
              
              
              127,294
              
              
              4,324,525Net
                  Cash Provided by (Used in) Operating Activities
              
              
              (326,204
              )
              
              89,727
              
              
              (11,705,967
              )**Cash
                  Flows From Investing Activities**Plantation
                  development costs
              
              
              (243,669
              )
              
              -
              
              
              (552,446
              )Proceeds
                  from disposal of assets
              
              
              -
              
              
              -
              
              
              310,000Increase
                  in deposits
              
              
              -
              
              
              -
              
              
              (51,100
              )Purchase
                  of property and equipment
              
              
              -
              
              
              -
              
              
              (221,334
              )Issuance
                  of note receivable
              
              
              -
              
              
              -
              
              
              (313,170
              )Payments
                  received on note receivable
              
              
              -
              
              
              -
              
              
              130,000Net
                  Cash Used in Investing Activities
              
              
              (243,669
              )
              
              -
              
              
              (698,050
              )**Cash
                  Flows From Financing Activities**Proceeds
                  from common stock, preferred stock, and warrants for cash
              
              
              75,000
              
              
              -
              
              
              11,324,580Contributed
                  equity
              
              
              -
              
              
              -
              
              
              131,374Proceeds
                  from notes payable and related warrants
              
              
              -
              
              
              -
              
              
              1,686,613Payments
                  on notes payable
              
              
              (50,000
              )
              
              -
              
              
              (951,287
              )Proceeds
                  from convertible notes payable
              
              
              -
              
              
              -
              
              
              571,702Payments
                  on convertible notes payable
              
              
              -
              
              
              -
              
              
              (98,500
              )Net
                  Cash Provided by Financing Activities
              
              
              25,000
              
              
              -
              
              
              12,664,482**Net
                  Increase (Decrease) in Cash and Cash Equivalents**
              
              
              (544,873
              )
              
              89,727
              
              
              260,465**Cash
                  and Cash Equivalents at Beginning of Period**
              
              
              805,338
              
              
              47,658
              
              
              -**Cash
                  and Cash Equivalents at End of Period**
              
              
              260,465
              
              
              137,385
              
              
              260,465**Supplemental
                  Disclosures of Cash Flow Information:**Cash
                  paid for interest
              
              $
              670
              
              $
              -Noncash
                  Investing and Financing Activities:Reclassification
                  of financial instrument to permanent equity
              
              $
              2,161,045
              
              $
              -





The
      accompanying notes are an integral part of these condensed consolidated
      financial statements





3


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**





Note
      1-History
      and Basis of Presentation





*History*





Medical
      Discoveries, Inc. was incorporated under the laws of the State of Utah on
      November 20, 1991. Effective as of August 6, 1992, the Company merged
      with and into WPI Pharmaceutical, Inc., a Utah corporation (“WPI”), pursuant to
      which WPI was the surviving corporation. Pursuant to the MDI-WPI merger, the
      name of the surviving corporation was changed to Medical Discoveries, Inc.
      (“MDI”). MDI’s initial purpose was the research and development of an
      anti-infection drug know as MDI-P.





On
      March 22, 2005, MDI formed MDI Oncology, Inc., a Delaware corporation, as a
      wholly-owned subsidiary to acquire and operate the assets and business
      associated with the Savetherapeutics transaction. With this transaction, MDI
      acquired the SaveCream technology and carried on the research and development
      of
      this drug candidate. MDI made the decision in 2007 to discontinue further
      development of these two drug candidates and sell these
      technologies.





On
      September 7, 2007, MDI entered into a share exchange agreement pursuant to
      which
      it acquired all of the outstanding ownership interests in Global Clean Energy
      Holdings, LLC, an entity that had certain trade secrets, know-how, business
      plans, term sheets, business relationships, and other information relating
      to
      the start-up of a business related to the cultivation and production of seed
      oil
      from the seed of the Jatropha plant. With this transaction, MDI commenced the
      research and development of a business whose purpose will be providing feedstock
      oil intended for the production of bio-diesel.





On
      January 29, 2008, a meeting of shareholders was held and, among other things,
      the name Medical Discoveries, Inc. was changed to Global Clean Energy Holdings,
      Inc. (the “Company”).





*Unaudited
      Interim Consolidated Financial Statements*





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared by the Company pursuant to the rules and regulations of the Securities
      and Exchange Commission. Certain information and footnote disclosures normally
      included in financial statements prepared in accordance with accounting
      principles generally accepted in the United States of America have been
      condensed or omitted pursuant to such rules and regulations. In the opinion
      of
      management, all adjustments and disclosures necessary for a fair presentation
      of
      these financial statements have been included and are of normal, recurring
      nature. These financial statements should be read in conjunction with the
      financial statements and notes thereto included in the Company’s annual report
      on Form 10-KSB for the year ended December 31, 2007, as filed with the
      Securities and Exchange Commission. The results of operations for the three
      months ended March 31, 2008, may not be indicative of the results that may
      be
      expected for the year ending December 31, 2008.








4


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**





*Loss
      per Common Share*





Loss
      per
      share amounts are computed by dividing loss applicable to common shareholders
      by
      the weighted-average number of common shares outstanding during each period.
      Diluted loss per share amounts are computed assuming the issuance of common
      stock for potentially dilutive common stock equivalents. All outstanding stock
      options, warrants, convertible notes, convertible preferred stock, and common
      stock held in escrow are currently antidilutive and have been excluded from
      the
      calculations of diluted loss per share at March 31, 2008 and 2007, as follows:




March
                  31,2008
              
              2007Convertible
                  notes
              
              
              128,671
              
              
              128,671Convertible
                  preferred stock - Series A
              
              
              57,856,000
              
              
              141,106,493Convertible
                  preferred stock - Series B
              
              
              11,818,181
              
              
              -Warrants
              
              
              29,688,934
              
              
              38,973,861Compensation-based
                  stock options and warrants
              
              
              49,383,000
              
              
              29,883,000Common
                  stock held in escrow
              
              
              22,837,593
              
              
              -171,712,379
              
              
              210,092,025




*Recently
      Issued Accounting Standards*





In
      September 2006, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      157, *Fair
      Value Measurements* (SFAS
      157). SFAS 157 defines fair value, establishes a framework for measuring fair
      value in generally accepted accounting principles, and expands disclosures
      about
      fair value measurements. This statement is effective for the Company’s fiscal
      year beginning January 1, 2008 for financial assets and liabilities and January
      1, 2009 for non-financial assets and liabilities. The adoption of SFAS 157
      for
      financial assets and liabilities on January 1, 2008 did not have a material
      impact on the Company’s consolidated financial statements. The Company is
      currently evaluating the impact of SFAS 157 for non-financial assets and
      liabilities, if any, on the reporting of its financial position and results
      of
      operations.





In
      February 2007, the FASB issued SFAS No. 159, *The
      Fair Value Option for Financial Assets and Financial
      Liabilities* -
      including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 allows
      measurement at fair value of eligible financial assets and liabilities that
      are
      not otherwise measured at fair value. If the fair value option for an eligible
      item is elected, unrealized gains and losses for that item shall be reported
      in
      current earnings at each subsequent reporting date. SFAS 159 also establishes
      presentation and disclosure requirements designed to draw comparison between
      the
      different measurement attributes the Company elects for similar types of assets
      and liabilities. The Company adopted SFAS 159 effective January 1, 2008, but
      did
      not elect to fair value any of the eligible assets or liabilities. Therefore,
      the adoption of SFAS 159 did not have any impact on its financial position
      or
      results of operations.





In
      December 2007, the FASB issued SFAS No. 141 (revised 2007), *Business
      Combinations* (SFAS
      141(R)), which replaces SFAS 141, *Business
      Combinations* .
      SFAS
      141(R) retains the underlying concepts of SFAS 141 in that all business
      combinations are still required to be accounted for at fair value under the
      acquisition method of accounting, but SFAS 141(R) changed the method of applying
      the acquisition method in a number of significant aspects. Acquisition costs
      will generally be expensed as incurred; noncontrolling interests will be valued
      at fair value at the acquisition date; in-process research and development
      will
      be recorded at fair value as an indefinite-lived intangible asset at the
      acquisition date; restructuring costs associated with a business combination
      will generally be expensed subsequent to the acquisition date; and changes
      in
      deferred tax asset valuation allowances and income tax uncertainties after
      the
      acquisition date generally will affect income tax expense. SFAS 141(R) is
      effective on a prospective basis for all business combinations for which the
      acquisition date is on or after the beginning of the first annual period
      subsequent to December 15, 2008, with the exception of the accounting for
      valuation allowances on deferred taxes and acquired tax contingencies. SFAS
      141(R) amends SFAS 109 such that adjustments made to valuation allowances on
      deferred taxes and acquired tax contingencies associated with acquisitions
      that
      closed prior to the effective date of SFAS 141(R) would also apply the
      provisions of SFAS 141(R). Early adoption is not permitted. The Company is
      currently evaluating the effects, if any, that SFAS 141(R) may have on our
      financial statements. The Company does not expect that it will have any
      immediate effect on our financial statements, however, the revised standard
      will
      govern the accounting for any future business combinations that the Company
      may
      enter into.




5
 
  **GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial
          Statements**




In
      December 2007, the FASB issued SFAS No. 160, *Noncontrolling
      Interests in Consolidated Financial Statements—an amendment of ARB No. 51* (SFAS
      160). This statement is effective for fiscal years, and interim periods within
      those fiscal years, beginning on or after December 15, 2008, with earlier
      adoption prohibited. This statement requires the recognition of a noncontrolling
      interest (minority interest) as equity in the consolidated financial statements
      and separate from the parent’s equity. The amount of net income attributable to
      the noncontrolling interest will be included in consolidated net income on
      the
      face of the income statement. It also amends certain of ARB No. 51’s
      consolidation procedures for consistency with the requirements of SFAS
      141(R) *.* This
      statement also includes expanded disclosure requirements regarding the interests
      of the parent and its noncontrolling interest. The Company is currently
      evaluating this new statement and anticipate that the statement will not have
      a
      significant impact on the reporting of its results of operations.





In
      March
      2008, the FASB issued SFAS No. 161, *Disclosures
      about Derivative Instruments and Hedging Activities, an amendment of FASB
      Statement No. 133* (SFAS
      161). SFAS 161 requires enhanced disclosures about an entity’s derivative and
      hedging activities. Entities will be required to provide enhanced disclosures
      about: (a) how and why an entity uses derivative instruments; (b) how derivative
      instruments and related hedge items are accounted for under SFAS No. 133 and
      its
      related interpretations; and (c) how derivative instruments and related hedge
      items affect an entity’s financial position, financial performance and cash
      flows. The provisions of SFAS 161 are effective January 1, 2009. The Company
      is
      currently evaluating the impact of SFAS 161 on its financial
      statements.








Note
      2-Going
      Concern Considerations





The
      accompanying unaudited consolidated financial statements have been prepared
      assuming that the Company will continue as a going concern. The Company incurred
      a net loss applicable to common shareholders of $770,033 and $4,414,884 during
      the three-month period ended March 31, 2008 and the year ended December 31,
      2007, respectively, and has incurred losses applicable to common shareholders
      since inception of the development stage of $26,209,402. The Company also used
      cash in operating activities of $326,204 and $709,278 during the three-month
      period ended March 31, 2008 and the year ended December 31, 2007, respectively.
      At March 31, 2008, the Company has negative working capital of $6,116,664 and
      a
      stockholders’ deficit of $5,563,710. Those factors raise substantial doubt about
      the Company’s ability to continue as a going concern.




6


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


The
      Company discontinued its former bio-pharmaceutical business during the quarter
      ended March 31, 2007. Management plans to meet its cash needs through various
      means including selling intellectual assets, securing financing, and developing
      a new business model. The Company has entered into an agreement to sell certain
      intellectual assets for an aggregate of €4,007,534
      (approximately $6,332,000 using March 31, 2008 exchange rates) ,
      which
      consideration is payable in cash and by the assumption of certain of the
      Company’s outstanding liabilities. In order to fund its operations pending the
      closing of the asset sale, the Company sold Series B preferred stock during
      the
      quarter ended December 31, 2007 in the amount of $1,300,000 and issued a secured
      promissory note under which the Company borrowed $350,000. The Company is
      developing a new business operation to participate in the rapidly growing
      bio-diesel industry. The Company expects to be successful in this new venture,
      but there is no assurance that its business plan will be economically viable.
      The ability of the Company to continue as a going concern is dependent on that
      plan’s success. The financial statements do not include any adjustments that
      might be necessary if the Company is unable to continue as a going concern.






**Note
      3 - Global Clean Energy Holdings, LLC**





Having
      agreed to discontinue its bio-pharmaceutical operations and dispose of the
      related assets, the Company considered entering into a number of other
      businesses that would enable it to be able to provide the shareholders with
      future value. The Company’s Board of Directors decided to develop a business to
      produce and sell seed oils, including seed oils harvested from the planting
      and
      cultivation of the *Jatropha
      curcas* plant,
      for the purpose of providing feedstock oil intended for the generation of methyl
      ester, otherwise known as bio-diesel (the “Jatropha Business”). The Company’s
      Board concluded that there was a significant opportunity to participate in
      the
      rapidly growing biofuels industry, which previously was mainly driven by high
      priced, edible oil-based feedstock. In order to commence its new Jatropha
      Business, effective September 1, 2007, the Company (i) hired Richard Palmer,
      an
      energy consultant, and a member of Global Clean Energy Holdings LLC (“Global”)
      to act as its new President, Chief Operating Officer and future Chief Executive
      Officer, (ii) engaged Mobius Risk Group, LLC, a Texas company engaged in
      providing energy risk advisory services, to provide it with consulting services
      related to the development of the Jatropha Business, (iii) acquired certain
      trade secrets, know-how, business plans, term sheets, business relationships,
      and other information relating to the cultivation and production of seed oil
      from the Jatropha plant for the production of bio-diesel from Global, and (iv)
      engaged Corporativo LODEMO S.A DE CV to initiate the Jatropha Business in
      Mexico.





**Share
      Exchange Agreement**





The
      Company entered into a share exchange agreement (the Global Agreement) pursuant
      to which the Company acquired all of the outstanding ownership interests in
      Global Clean Energy Holdings, LLC, a Delaware limited liability company
      (Global), on September 7, 2007 from Mobius Risk Group, LLC (Mobius) and from
      Richard Palmer (Mr. Palmer). Mr. Palmer owns a 13.33% equity interest in Mobius
      and, as described further in this Note, became the Company’s new President and
      Chief Operating Officer in September 2007 and its Chief Executive Officer in
      December 2007. Mobius and Mr. Palmer are considered related parties to the
      Company. Global is an entity that has certain trade secrets, know-how, business
      plans, term sheets, business relationships, and other information relating
      to
      the start-up of a business related to the cultivation and production of seed
      oil
      from the seed of the Jatropha plant, for the purpose of providing feedstock
      oil
      intended for the production of bio-diesel.





7


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**





**Palmer
      Employment Agreement**





Effective
      September 1, 2007, the Company entered into an employment agreement with Richard
      Palmer pursuant to which the Company hired Mr. Palmer to serve as its President
      and Chief Operating Officer. Mr. Palmer was also appointed to serve as a
      director on the Company’s Board of Directors to serve until the next election of
      directors by the Company’s shareholders. Upon the resignation of the former
      Chief Executive Officer on December 21, 2007, Mr. Palmer also became the
      Company’s Chief Executive Officer. The Company hired Mr. Palmer to take
      advantage of his experience and expertise in the feedstock/bio-diesel industry,
      and in particular, in the Jatropha bio-diesel and feedstock business. The term
      of employment commenced September 1, 2007 and ends on September 30, 2010, unless
      terminated in accordance with the provisions of the agreement.





**Mobius
      Consulting Agreement**





Concurrent
      with the execution of the Global Agreement, the Company entered into a
      consulting agreement with Mobius pursuant to which Mobius has agreed to provide
      consulting services to the Company in connection with the Company’s new Jatropha
      bio-diesel feedstock business. The Company engaged Mobius as a consultant to
      obtain Mobius’ experience and expertise in the feedstock/bio-diesel market to
      assist the Company and Mr. Palmer in developing this new line of operations
      for
      the Company. Mobius has agreed to provide the following services to the Company:
      (i) manage and supervise a contemplated research and development program
      contracted by the Company and conducted by the University of Texas Pan American
      regarding the location, characterization, and optimal economic propagation
      of
      the Jatropha ** plant;
      and (ii) assist with the management and supervision of the planning,
      construction, and start-up of plant nurseries and seed production plantations
      in
      Mexico, the Caribbean or Central America.





The
      term
      of the agreement is twelve (12) months, or until the scope of work under the
      agreement has been completed. Mobius will supervise the hiring of certain staff
      to serve in management and operations roles of the Company, or hire such persons
      to provide similar services as independent contractors. Mobius’ compensation for
      the services provided under the agreement is a monthly retainer of $45,000.
      The
      Company will also reimburse Mobius for reasonable business expenses incurred
      in
      connection with the services provided. The agreement contains customary
      confidentiality provisions with respect to any confidential information
      disclosed to Mobius or which Mobius receives while providing services under
      the
      agreement. Under this agreement, the Company has paid Mobius or accrued $135,000
      during the three months ended March 31, 2008, of which $13,500 was expensed
      as
      compensation to Mobius and $121,500 was capitalized as plantation development
      costs pursuant to AICPA Statement of Position 85-3, *Accounting
      by Agricultural Producers and Agricultural Cooperatives* .





**LODEMO
      Agreement**





On
      October 15, 2007, the Company entered into a service agreement with Corporativo
      LODEMO S.A DE CV, a Mexican corporation (the LODEMO Group). The Company has
      decided to initiate its Jatropha Business in Mexico, and has already identified
      parcels of land in Mexico to plant and cultivate Jatropha. In order to obtain
      all of the logistical and other services needed to operate a large-scale farming
      and transportation business in Mexico, the Company entered into the service
      agreement with the LODEMO Group, a privately held Mexican company with
      substantial land holdings, significant experience in diesel distribution and
      sales, liquids transportation, logistics, land development and agriculture.




8


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial Statements**


Under
      the
      supervision of the Company’s management and Mobius, the LODEMO Group will be
      responsible for the establishment, development, and day-to-day operations of
      the
      Jatropha Business in Mexico, including the extraction of the oil from the
      Jatropha seeds, the delivery of the Jatropha oil to buyers, the purchase or
      lease of land in Mexico, the establishment and operation of one or more Jatropha
      nurseries, the clearing, planting and cultivation of the Jatropha fields, the
      harvesting of the Jatropha seeds, the operation of the Company’s oil extraction
      facilities, and the logistics associated with the foregoing. Although the LODEMO
      Group will be responsible for identifying and acquiring the farmland, ownership
      of the farmland or any lease thereto will be held directly by the Company or
      by
      a Mexican subsidiary of the Company. The LODEMO Group will be responsible for
      hiring and managing all necessary employees. All direct and budgeted costs
      of
      the Jatropha Business in Mexico will be borne by the Company.





The
      LODEMO Group will provide the foregoing and other necessary services for a
      fee
      primarily based on the number of hectares of Jatropha under cultivation. The
      Company has agreed to pay the LODEMO Group a fixed fee per year of $60 per
      hectare of land planted and maintained with minimum payments based on 10,000
      hectares of developed land, to follow a planned planting schedule. The Agreement
      has a 20-year term but may be terminated earlier by the Company under certain
      circumstances. The LODEMO Group will also potentially receive incentive
      compensation for controlling costs below the annual budget established by the
      parties, production incentives for increased yield and a sales commission for
      biomass sales. Under this agreement, the Company has paid the LODEMO Group
      or
      accrued $91,529 during the three months ended March 31, 2008, all of which
      was
      capitalized as plantation development costs pursuant to AICPA Statement of
      Position 85-3, *Accounting
      by Agricultural Producers and Agricultural Cooperatives* .








Note
      4 -Plantation
      Development Costs and Equipment





Plantation
      development costs and equipment as of March 31, 2008 and December 31, 2007
      are
      as follows:


**March
                  31,**
              
              **December
                  31,****2008**
              
              **2007**Plantation
                  development costs
              
              $
              552,447
              
              $
              308,777Office
                  equipment
              
              
              1,127
              
              
              1,127Total
                  cost
              
              
              553,574
              
              
              309,904Less
                  accumulated depreciation
              
              
              (620
              )
              
              (563
              )**Plantation
                  development costs and equipment, net**
              
              $
              552,954
              
              $
              309,341




Plantation
      development costs are not currently being depreciated. Upon completion of the
      plantation development, those costs will be depreciated over the shorter of
      the
      useful life of the related asset or over the term of the lease. The plantation
      development costs are located in Mexico.




9
 
 **GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial
          Statements**


**Note
      5 - Accrued Payroll and Payroll Taxes**




Accrued
      payroll and payroll taxes principally relate to unpaid compensation for officers
      and directors that are no longer affiliated with the Company. Accrued payroll
      taxes will become due upon payment of the related accrued compensation. Accrued
      payroll and payroll taxes are composed of the following:


**March
                    31,**
                
                **December
                    31,****2008**
                
                **2007**Former
                    Chief Executive Officer, resigned 2007, including$500,000
                    under the Release and Settlement Agreement
                
                $
                570,949
                
                $
                583,333Other
                    former Officers and Directors
                
                
                311,200
                
                
                311,200Accrued
                    payroll taxes on accrued compensation toformer
                    officers and directors
                
                
                38,510
                
                
                38,510Accrued
                    payroll, vacation, and related payroll taxesfor
                    current officers
                
                
                28,928
                
                
                17,928**Accrued
                    payroll and payroll taxes**
                
                $
                949,587
                
                $
                950,971




On
      August
      31, 2007, the Company entered into a Release and Settlement Agreement with
      Judy
      Robinett, the Company’s then-current Chief Executive Officer. Under the
      agreement, Ms. Robinett agreed to, among other things, assist the Company in
      the
      sale of its legacy assets and complete the preparation and filing of the
      delinquent reports to the Securities and Exchange Commission. Under the
      agreement, Ms. Robinett agreed to (i) forgive her potential right to receive
      $1,851,805 in accrued and unpaid compensation, un-accrued and pro-rata bonuses,
      and severance pay and (ii) the cancellation of stock options to purchase
      14,000,000 shares of common stock at an exercise price of $0.02 per share.
      In
      consideration for her services, the forgiveness of the foregoing cash payments,
      the cancellation of the stock options, and settlement of other issues, the
      Company agreed to, among other things, to pay Ms. Robinett $500,000 upon the
      receipt of the cash payment under the agreement to sell the SaveCream Assets.
      Pursuant to this agreement, Ms. Robinett resigned on December 21, 2007.








**Note
      6 - Secured Promissory Note**





In
      order
      to fund ongoing operations pending closing of the sale of the SaveCream Assets,
      the Company entered into a loan agreement with, and issued a promissory note
      in
      favor of, Mercator Momentum Fund III, L.P. ( Mercator ).
      Mercator, along with two other affiliates, owns all of the issued and
      outstanding shares of the Company’s Series A Convertible Preferred Stock, and is
      considered a related party to the Company. Pursuant to the loan agreement,
      Mercator made available to the Company a secured term credit facility in
      principal amount of $1,000,000. The promissory note initially was due and
      payable on December 14, 2007. As of December 13, 2007, the Company owed Mercator
      $250,000 under the loan. Mercator agreed to extend the maturity date of the
      $250,000 to February 21, 2008. In March, 2008, the loan was paid down to
      $200,000 and the maturity date was extended to June 21, 2008. The foregoing
      loan
      is secured by a lien on all of the assets of the Company. Under the loan
      agreement, interest is payable on the loan at a rate of 12% per annum, payable
      monthly.




10
 
 **GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial
          Statements**





**Note
      7 - Financial Instrument**





The
      conversion feature of the Series A Convertible Preferred Stock has more of
      the
      attributes of an equity instrument than of a liability instrument, and thus
      was
      not considered a derivative. However, at the time of issuance, the Company
      was
      unable to guarantee that there would be enough shares of authorized common
      stock
      to settle other “freestanding instruments.” Accordingly, all of the warrants
      attached to the convertible preferred stock were measured at their fair value
      and recorded as a liability in the financial statements characterized as a
      “Financial Instrument”. For these same reasons, all other warrants and options
      outstanding on March 11, 2005 or issued during the remainder of 2005 and through
      2007 (except for stock options issued to employees) were measured at their
      fair
      value and recorded as additional liability in the financial statements. As
      of
      December 31, 2007, the fair value of this liability was recorded at $2,166,514.





For
      the
      period from December 31, 2007 through January 29, 2008, the fair value of this
      liability decreased by $5,469 resulting in a balance of $2,161,045. On January
      29, 2008, the shareholders of the Company approved an increase in the number
      of
      authorized shares of common stock from 250 million to 500 million. Consequently,
      as the result of this amendment to the Company’s Articles of Incorporation, the
      Company is now able to settle all ‘freestanding instruments”. Accordingly, the
      Company reclassified the liability, characterized in the accompanying financial
      statements as “Financial Instrument”, in the amount of $2,161,045, to permanent
      equity in January 2008.








**Note
      8 - Stock Options and Warrants**





The
      Company has two incentive stock option plans wherein 24,000,000 shares of
      the Company’s common stock are reserved for issuance thereunder. As more fully
      described in Note 9, the Company issued stock options during the three months
      ended March 31, 2008 to acquire 4,500,000 million shares of the Company’s common
      stock. During the three months ended March 31, 2007, the Company issued
      compensation-based warrants to purchase 10,000,000 shares of common stock.
      The
      warrants have an exercise price of $0.03 per share, contain a cashless exercise
      provision, and expire ten years from date of issue. No income tax benefit has
      been recognized for share-based compensation arrangements and no compensation
      cost has been capitalized in the balance sheet.





A
      summary
      of the status of options and compensation-based warrants at March 31, 2008,
      and
      changes during
      the three months then ended is presented in the following table:




**Weighted****Weighted**
              
              **Average****Shares**
              
              **Average**
              
              **Remaining**
              
              **Aggregate****Under**
              
              **Exercise**
              
              **Contractual**
              
              **Intrinsic****Option**
              
              **Price**
              
              **Life**
              
              **Value**Outstanding
                  at January 1, 2008
              
              
              44,883,000
              
              $
              0.03
              
              
              7.6
                  years
              
              $
              790,000Granted
              
              
              4,500,000
              
              
              0.05Expired
              
              
              -
              
              
              -Outstanding
                  at March 31, 2008
              
              
              49,383,000
              
              $
              0.03
              
              
              7.3
                  years
              
              $
              995,000Exercisable
                  at March 31, 2008
              
              
              32,883,000
              
              $
              0.03
              
              
              8.4
                  years
              
              $
              815,000




11
 
 **GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial
          Statements**




At
      March
      31, 2008, 80,000 of the options outstanding have no stated contractual life.
      The
      fair value of each stock option grant and compensation-based warrant is
      estimated on the date of grant or issuance using the Black-Scholes option
      pricing model. The weighted-average fair value of stock options granted during
      the three months ended March 31, 2008 was $0.042. The weighted-average
      assumptions used for options granted during the three months ended March 31,
      2008 were risk-free interest rate of 2.4%, volatility of 127%, expected life
      of
      5.2 years, and dividend yield of zero. The weighted- average fair value of
      compensation-based warrants issued during the three months ended March 31,
      2007
      was $0.029. The weighted-average assumptions used for compensation-based
      warrants issued during the three months ended March 31, 2007 were risk-free
      interest rate of 4.8%, volatility of 134%, expected life of ten years, and
      dividend yield of zero. The assumptions employed in the Black-Scholes option
      pricing model include the following. The expected life of stock options
      represents the period of time that the stock options granted are expected to
      be
      outstanding prior to exercise. The expected volatility is based on the
      historical price volatility of the Company’s common stock. The risk-free
      interest rate represents the U.S. Treasury constant maturities rate for the
      expected life of the related stock options. The dividend yield represents
      anticipated cash dividends to be paid over the expected life of the stock
      options.





Share-based
      compensation from all sources recorded during the three months ended March
      31,
      2008 and March 31, 2007 was $79,709 and $292,000, respectively. Share-based
      compensation has been included in the accompanying Consolidated Statements
      of
      Operations as follows:


**Period
                  Reported**
              
              **General
                  and Administrative Expense**
              
              **Loss
                  from Discontinued Operations**
              
              **Total**Three
                  Months ended March 31, 2008
              
              $
              79,709
              
              $
              -
              
              $
              79,709Three
                  Months ended March 31, 2007
              
              
              175,200
              
              
              116,800
              
              
              292,000




As
      of
      March 31, 2008, there is approximately $574,000 of unrecognized compensation
      cost related to stock-based payments that will be recognized over a weighted
      average period of approximately 2.0 years.





**Stock
      Warrants**





A
      summary
      of the status of the warrants granted at March 31, 2008, and changes during
      the
      three months then ended is presented in the following table:


**Weighted****Shares**
              
              **Average****Under**
              
              **Exercise****Warrant**
              
              **Price**Outstanding
                  at January 1, 2008
              
              
              31,033,379
              
              $
              0.02Issued
              
              
              -
              
              
              -Expired
              
              
              (1,344,445
              )
              
              0.18Outstanding
                  at March 31, 2008
              
              
              29,688,934
              
              $
              0.02
  12


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**





**Note
      9 - Employment Agreement**





On
      March
      20, 2008, the Company entered into an employment agreement with Bruce K. Nelson
      pursuant to which the Company hired Mr. Nelson to serve as its Executive
      Vice-President and Chief Financial Officer effective April 1, 2008. The initial
      term of employment commenced March 20, 2008 and continues through March 20,
      2010. Thereafter, the term of employment shall automatically renew for
      successive one-year periods unless otherwise terminated in accordance with
      the
      employment agreement.





Mr.
      Nelson’s compensation package includes a base salary of $175,000, subject to
      annual increases based on the Consumer Price Index for the immediately preceding
      12-month period, and a bonus payment based on Mr. Nelson’s satisfaction of
      certain performance criteria established by the compensation committee of the
      Company’s Board of Directors. The bonus amount in any fiscal year will not
      exceed 100% of Mr. Nelson’s base salary. Mr. Nelson is eligible to participate
      in the Company’s employee stock option plan and other benefit
      plans.





The
      Company granted Mr. Nelson an option (the Initial Option) to acquire up to
      2,000,000 shares of the Company’s common stock at an exercise price of $0.05.
      The Initial Option shall vest in tranches of 500,000 shares after 90 days,
      nine
      months, fifteen months, and two years of the employment term. The Initial Option
      expires after 10 years. The Company also granted Mr. Nelson an option (the
      Performance Option) to acquire up to 2,500,000 shares of the Company’s common
      stock at an exercise price of $0.05, subject to the Company’s achievement of
      certain market capitalization goals. The Performance Option expires after five
      years.





The
      Company may terminate Mr. Nelson’s employment on the first anniversary of the
      employment term, provided that the Company pays Mr. Nelson three (3) months
      salary if such termination is without “cause”. If Mr. Nelson’s employment is
      terminated by the Company without “cause” or by Mr. Nelson for “good reason”
prior to the first anniversary of the employment term, Mr. Nelson will be
      entitled to receive severance payments including (i) an amount equal to his
      unpaid salary through the first anniversary of the employment term, (ii) 50%
      of
      the target bonus in effect on the date of termination, and (iii) 50% of the
      Performance Option shall vest. If Mr. Nelson’s employment is terminated by the
      Company without “cause” or by Mr. Nelson for “good reason” after the first
      anniversary of the employment term, Mr. Nelson will be entitled to receive
      severance payments including (i) an amount equal to his unpaid salary through
      the end of the second year of the employment agreement, and (ii) 100% of Initial
      Option shall vest, to the extent not already vested.







**Note
      10 - Discontinued Operations**





During
      the three months ended March 31, 2007, the Board of Directors determined that
      it
      could no longer fund the development of its drug candidates and could not obtain
      additional funding for these drug candidates. The Board evaluated the value
      of
      its developmental stage drug candidates. In March 2007, the Board determined
      that the best course of action was to discontinue further development of these
      drug candidates and sell these technologies.




13


**GLOBAL
        CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
        KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
        Development Stage Company)**
 **Notes
        to Unaudited Condensed Consolidated Financial
        Statements**




**Eucodis
      Agreement**





On
      March
      8, 2007, the Company entered into a binding letter of intent with Eucodis
      Pharmaceuticals Forschungs und Entwicklungs GmbH, an Austrian company (Eucodis),
      regarding their intent to proceed with the evaluation, negotiation, and
      execution of a sale and purchase agreement related to certain assets of the
      Company. On July 6, 2007, the Company entered into a sale and purchase agreement
      (the Asset Sale Agreement) with Eucodis, pursuant to which Eucodis agreed to
      acquire certain assets of the Company in consideration for a cash payment and
      the assumption by Eucodis of certain indebtedness of the Company. The sale
      to
      Eucodis was scheduled to close at the end of January 2008 after the Company’s
      shareholders approved the sale. On January 29, 2008, the shareholders of the
      Company approved the transaction. Shortly before the scheduled closing, Eucodis
      informed the Company that it was unable to complete the transaction as agreed
      because it had insufficient funds and needed to obtain additional financing.
      On
      February 29, 2008, Eucodis informed the Company that it was completing an
      agreement for financing and still desired to complete the transaction for the
      purchase of the assets. At that time, the Company and Eucodis entered into
      a
      letter agreement to sell the assets on substantially the same terms as under
      the
      Asset Sale Agreement. As of April 30, 2008, the term for the extension of the
      sale of the asset to Eucodis expired. The Company and Eucodis are currently
      negotiating an additional extension of the term for the closing. Other terms
      would remain unchanged. Such additional extensions may include immediate
      compensation for the Company, and that compensation would be credited toward
      the
      sale proceeds received at closing. Eucodis has reported that they have executed
      agreements with their investor group and that the proceeds from that investment
      in Eucodus will be used to consummate the purchase of the specified assets
      of
      the Company.





The
      assets to be acquired by Eucodis pursuant to the Asset Sale Agreement, as
      modified by the letter agreement, include all of the Company’s right, title and
      interest in all patents, patent applications, United
      States and foreign regulatory files and data ,
      pre-clinical study data and anecdotal clinical trial data concerning SaveCream.
      In addition, at the closing of the sale, the Company will also assign to Eucodis
      all of its right, title and interest in a co-development agreement with Eucodis,
      dated as of July 29, 2006, related to the co-development and licensing of
      SaveCream (including the intellectual property rights acquired in connection
      with that development) and their rights under certain
      other contracts relating to SaveCream.





The
      purchase price to be paid by Eucodis pursuant to the letter agreement for
      acquiring these assets is €4,007,534 (approximately $6,332,000 using March 31,
      2008 exchange rates), is comprised of (i) a cash payment of €1,871,337
      (approximately $2,957,000 under exchange rates in effect as of March 31, 2008)
      less $200,000 received in March 2007 under the binding letter of intent, and
      (ii) Eucodis’ assumption of an aggregate of €2,136,197 (approximately $3,375,000
      under exchange rates in effect as of March 31, 2008), constituting specific
      indebtedness currently owed and other commitments to certain creditors of the
      Company. In addition, at the closing of the sale, Eucodis is to assume (i)
      all
      financial and other obligations of the Company under certain contracts to be
      assigned to Eucodis, and (ii) certain other costs incurred by the Company since
      February 28, 2007 in connection with preserving the acquired assets for the
      benefit of Eucodis until closing of the sale.





**Accounting
      for Discontinued Operations**





Pursuant
      to accounting rules for discontinued operations, the Company has classified
      all
      revenue and expense related to the operations of its bio-pharmaceutical business
      as discontinued operations. For all periods prior to March 2007, the Company
      has
      reclassified all revenue and operating expenses to discontinued operations,
      except for estimated general corporate overhead, because all of its operations
      related to the discontinued technologies. For the three months ended March
      31,
      2008, the “Loss from Discontinued Operations” consists solely of the foreign
      currency transaction loss related to Current Liabilities Associated with Assets
      Held for Sale that are denominated in euros. The assets being sold to Eucodis
      have no carrying value in the accompanying balance sheet, while the liabilities
      being assumed in the planned sale to Eucodis have been segregated in the
      accompanying balance sheets and are characterized as Current Liabilities
      Associated with Assets Held for Sale. The Company has not recorded any gain
      or
      loss at March 31, 2008 associated with the planned sale of the SaveCream assets.
      The following table presents the main classes of assets and liabilities
      associated with the discontinued business.




14


**GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial Statements**
  **March
                    31,**
                
                **December
                    31,****2008**
                
                **2007**Assets:
                
                $
                -
                
                $
                -Liabilities:Current
                    liabilities:Accounts
                    payable
                
                $
                440,401
                
                $
                412,415Research
                    and development obligation
                
                
                2,921,150
                
                
                2,701,555$
                3,361,551
                
                $
                3,113,970


Note
      11 -Subsequent
      Events





*Stock
      Exchange Agreement*





Effective
      April 18, 2008, the Company entered into an exchange agreement ( the Exchange
      Agreement) with Mercator Momentum Fund, L.P., Mercator Momentum Fund III, L.P.,
      and Monarch Pointe Fund, Ltd. (collectively, the MAG Funds), comprising all
      of
      the holders of the Company’s Series A Convertible Preferred Stock (the Series A
      Stock). Pursuant to the Exchange Agreement, the MAG Funds agreed to exchange
      28,927 shares of the Series A Stock, constituting all of the issued and
      outstanding shares of the Series A Stock, for an aggregate of 28,927,000 shares
      of the Company’s common stock. The exchange ratio was determined by dividing the
      $100 purchase price of the preferred shares by $0.10 per share of common stock.





Prior
      to
      the Exchange Agreement, the Series A Stock had been convertible at a price
      equal
      to 75% of the “Market Price”, as defined in the Certificate of Designations of
      Preferences and Rights of the Series A Stock. The conversion price could not
      exceed $0.1967 and had a conversion price floor of $0.05. On April 18, 2008,
      the
      closing price of the Company’s common stock was $0.10 and the “Market Price”
would have been $0.045 per share. In connection with the Exchange Agreement,
      the
      Company agreed to waive the limitation that the MAG Funds could not own more
      that 9.99% of the Company’s outstanding common stock as a concession for the MAG
      Funds agreeing to a conversion price that was more favorable to the Company.





*GCE
      Mexico I, LLC*




Effective
        April 23, 2008, the Company entered into a limited liability company agreement
        (“LLC Agreement”) for GCE Mexico I, LLC, a Delaware limited liability company
        (“GCE LLC”), with six unaffiliated investors (collectively, the Investors). GCE
        LLC was organized primarily to acquire approximately 5,000 acres of farm
        land
        (the Jatropha Farm) in the State of Yucatan in Mexico to be used primarily
        for
        the (i) cultivation of *Jatropha
        curcas* ,
        (ii)
        the marketing and sale of the resulting fruit, seeds, or pre-processed crude
        Jatropha oil, whether as biodiesel feedstock, biomass or otherwise, and (iii)
        the sale of carbon value, green fuel value, or renewable energy credit value
        (and other similar environmental attributes) derived from activities at the
        Jatropha Farm.





15
 
  **GLOBAL
          CLEAN ENERGY HOLDINGS, INC. AND SUBSIDIARIES**
 **FORMERLY
          KNOWN AS MEDICAL DISCOVERIES, INC.**
 **(A
          Development Stage Company)**
 **Notes
          to Unaudited Condensed Consolidated Financial
          Statements**




Under
        the
        LLC Agreement, the Company owns 50% of the issued and outstanding membership
        units of GCE LLC. The remaining 50% in common membership units were issued
        to
        the Investors. In addition, an aggregate of 1,000 preferred membership units
        were issued to two investors who have agreed to invest approximately $4.2
        million in GCE LLC, in installments and as required, and will be entitled
        to a
        preferential 12% per annum cumulative compounded return on their investment.
        The
        $4.2 million in proceeds will be used to acquire the Jatropha Farm and fund
        the
        development and operations of the Jatropha Farm. The Company is not required
        to
        make capital contributions to GCE LLC.
 
 On
        April
        29, 2008, GCE LLC was funded and the acquisition of the land for the Jatropha
        Farm was completed. Operating and development funds of $957,271, net of certain
        transaction costs, were also received by GCE LLC and are currently being
        utilized toward the development of the Jatropha Farm.
 
 With
        the
        acquisition of the land for the Jatropha Farm, the operational milestones
        were
        met under the share exchange agreement pursuant to which the Company acquired
        all of the outstanding ownership interests in Global Clean Energy Holdings,
        LLC.
        Consequently, 13,702,556 shares of common stock being held in escrow will
        be
        released to the former owners of Global Clean Energy Holdings, LLC.
  *Secured
          Promissory Note*
  The
          Company is currently in discussions with Mercator Momentum Fund III, L.P.
          (“Mercator”) to lend the Company an additional $300,000 under the $1 million
          secured credit facility that it entered into with Mercator on September
          7, 2007.
          Prior to this additional loan, as described in Note 6, the outstanding
          balance
          under this facility was $200,000. It is anticipated that interest will
          be
          payable on the new loan at a rate of 8% per annum; the $200,000 loan and
          the new
          $300,000 loan will mature and both the principal and all accrued interest
          will
          become payable on the earlier of August 12, 2008 or the sale of the SaveCream
          assets to Eucodis or another third party buyer. The loans are secured by
          a first
          priority lien on all of the Company’s assets.


16




**ITEM
      2.**  **MANAGEMENTS’
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS** .




**This
      Report, including any documents which may be incorporated by reference into
      this
      Report, contains “Forward-Looking Statements” within the meaning of Section 27A
      of the Securities Act of 1933, as amended, and Section 21E of the Securities
      Exchange Act of 1934, as amended. All statements other than statements of
      historical fact are “Forward-Looking Statements” for purposes of these
      provisions, including our plans to cultivate, produce and market non-food based
      feedstock for applications in the biofuels market, any projections of revenues
      or other financial items, any statements of the plans and objectives of
      management for future operations, any statements concerning proposed new
      products or services, any statements regarding future economic conditions or
      performance, and any statements of assumptions underlying any of the foregoing.
      All Forward-Looking Statements included in this document are made as of the
      date
      hereof and are based on information available to us as of such date. We assume
      no obligation to update any Forward-Looking Statement. In some cases,
      Forward-Looking Statements can be identified by the use of terminology such
      as
“may,” “will,” “expects,” “plans,” “anticipates,” “intends,” “believes,”
“estimates,” “potential,” or “continue,” or the negative thereof or other
      comparable terminology. Although we believe that the expectations reflected
      in
      the Forward-Looking Statements contained herein are reasonable, there can be
      no
      assurance that such expectations or any of the Forward-Looking Statements will
      prove to be correct, and actual results could differ materially from those
      projected or assumed in the Forward-Looking Statements. Future financial
      condition and results of operations, as well as any Forward-Looking Statements
      are subject to inherent risks and uncertainties, including any other factors
      referred to in our press releases and reports filed with the Securities and
      Exchange Commission. All subsequent Forward-Looking Statements attributable
      to
      the company or persons acting on its behalf are expressly qualified in their
      entirety by these cautionary statements. Additional factors that may have a
      direct bearing on our operating results are described under “Risk Factors” and
      elsewhere in this report** . **




**Introductory
      Comment**




Throughout
      this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “our
      company,” and “Company” refer to Global Clean Energy Holdings, Inc., a Utah
      corporation, and, unless the context indicates otherwise, also includes the
      following subsidiaries: (i) MDI Oncology, Inc., a Delaware corporation, (ii)
      Global Clean Energy Holdings LLC, a Delaware limited liability company, and
      (iii) GCE Mexico I, LLC, a Delaware limited liability company. During the period
      covered by this Quarterly Report on Form 10-Q, we changed our name to Global
      Clean Energy Holdings, Inc.




**Overview** ****




Prior
      to
      2007, Global Clean Energy Holdings, Inc. was a developmental-stage
      bio-pharmaceutical company, known as Medical Discoveries, Inc., that was engaged
      in the research, validation and development of two drugs. As more fully
      described in this report, during 2007 our Board of Directors determined that
      we
      could no longer fund the development of our two drug candidates and could not
      obtain additional funding for these drug candidates. Accordingly, the Board
      decided to sell our two drug candidates and to develop a new business in the
      rapidly expanding business of renewable alternative energy sources. As a result,
      our future business plan, and our current principal business activities include
      the planting, cultivation, harvesting and processing of inedible plant feedstock
      to generate seed oils and biomass for use in the biofuels industry, including
      the production of bio-diesel.




17




**Organizational
      History** **.**




This
      company was incorporated under the laws of the State of Utah on November 20,
      1991. Effective as of August 6, 1992, this company merged with and into WPI
      Pharmaceutical, Inc., a Utah corporation. Pursuant to merger, the name of this
      company was changed to Medical Discoveries, Inc. WPI was incorporated under
      the
      laws of the State of Utah on February 22, 1984 under the name Westport
      Pharmaceutical, Inc. On January 29, 2008, our shareholders approved the change
      of our corporate name, and on that date we amended our name to “Global Clean
      Energy Holdings, Inc.” to reflect our new focus on the bio-diesel alternative
      energy market.




On
      March
      22, 2005, we formed MDI Oncology, Inc., a Delaware corporation, as a wholly
      owned subsidiary to acquire certain breast cancer intellectual property assets
      from the liquidation estate of Savetherapeutics, A.G.




**Transition
      to new Business**




Until
      2007, we were a developmental-stage bio-pharmaceutical company engaged in the
      research, validation, and development of two drugs we referred to as MDI-P
      and
      SaveCream. Both of these drugs were under development, and had not been approved
      by the U.S. Food and Drug Administration (FDA). The total cost to develop these
      two drugs, and to receive the approval from the FDA, would have cost many
      millions of dollars and taken many more years.




Early
      in
      2007, our Board of Directors determined that we could no longer fund the
      development of our two drug candidates and that we could not obtain additional
      funding for these drug candidates. Our Board also evaluated the value of the
      SaveCream drug candidate that was being co-developed with Eucodis
      Pharmaceuticals Forschungs - und Entwicklungs GmbH, an Austrian company now
      known as Eucodis Pharmaceuticals GmbH (“Eucodis”), and the return we could
      expect for our shareholders, and determined that the highest value for this
      drug
      candidate could be realized through a sale of that drug candidate to Eucodis.
      Accordingly, our Board sought to maximize the return from these assets through
      their sale.




On
      July
      6, 2007, we entered into an agreement with Eucodis to sell SaveCream, and on
      January 29, 2008, our shareholders approved the sale of the SaveCream asset
      to
      Eucodis. However, our agreement to sell the SaveCream assets to Eucodis has
      expired and it is unclear if and when we will be able to sell our SaveCream
      assets to Eucodis or any other potential third party purchaser.




Having
      decided to dispose of the foregoing assets, our Board decided to develop a
      business in the alternative energy market as a producer of biofuels.
      Accordingly, our new goal is to produce and sell seed oils, including seeds
      oils
      harvested from the planting and cultivation of *Jatropha
      curcas* plant,
      for the purpose of providing feedstock oil used for the generation of methyl
      ester, otherwise known as bio-diesel (the “Jatropha Business”). In connection
      with commencing our new Jatropha Business, effective September 7, 2007, we
      (i)
      hired Richard Palmer, an energy consultant, and a member of Global Clean Energy
      Holdings LLC (“Global LLC”) to act as the our new President, Chief Operating
      Officer and future Chief Executive Officer, (ii) engaged Mobius Risk Group,
      LLC,
      a Texas company engaged in providing energy risk advisory services, to provide
      us with consulting services related to the development of the Jatropha Business,
      and (iii) acquired certain trade secrets, know-how, business plans, term sheets,
      business relationships, and other information relating to the cultivation and
      production of seed oil from the Jatropha plant for the production of bio-diesel
      from Global LLC.




18




**Recent
      Developments.**




*LLC
      Agreement*




Effective
      April 23, 2008, we entered into a limited liability company agreement (“LLC
      Agreement”) for GCE Mexico I, LLC, a Delaware limited liability company (“GCE
      LLC”), with six other unaffiliated investors (collectively, “Investors”). GCE
      LLC was organized primarily to acquire approximately 5,000 acres of farm land
      (the “Jatropha Farm”) in the State of Yucatan in Mexico to be used primarily for
      the (i) cultivation of *Jatropha
      curcas* ,
      (ii)
      the marketing and sale of the resulting fruit, seeds, or pre-processed crude
      Jatropha oil, whether as biodiesel feedstock, biomass or otherwise, and (iii)
      the sale of carbon value, green fuel value, or renewable energy credit value
      (and other similar environmental attributes) derived from activities at the
      Jatropha Farm.




Under
      the
      LLC Agreement, we own 50% of the issued and outstanding membership units of
      GCE
      LLC. The remaining 50% in common membership units were issued to the Investors.
      In addition, an aggregate of 1,000 preferred membership units were issued to
      two
      Investors (“Preferred Members”) who have agreed to invest approximately $4.2
      million in GCE LLC, in installments and as required, and will be entitled to
      a
      preferential 12% per annum cumulative compounded return on their investment.
      The
      $4.2 million in proceeds will be used to acquire the Jatropha Farm and fund
      the
      development and operations of the Jatropha Farm. We are not required to make
      capital contributions to GCE LLC.




On
      April
      29, 2008, GCE LLC was funded and the acquisition of the land for the Jatropha
      Farm was completed. Operating and development funds of $957,271, net of certain
      transaction costs, were also received by GCE LLC and are currently being
      utilized toward the development of the Jatropha Farm.




*Exchange
      of Series A Convertible Preferred Stock*




Effective
      April 18, 2008, Mercator Momentum Fund, L.P., Mercator Momentum Fund III, L.P.,
      and Monarch Pointe Fund, Ltd., the holders of our issued and outstanding Series
      A Convertible Preferred Stock (“Series A Stock”), exchanged all currently issued
      and outstanding 28,927 shares of Series A Stock for an aggregate of 28,927,000
      shares of our common stock. The exchange ratio was determined by dividing the
      $100 purchase price of the shares (the “Series A Purchase Price” as defined in
      Certificate of Designations of Preferences and Rights for the Series A Stock)
      by
      $0.10. Following the exchange of all of the issued and outstanding shares of
      Series A Stock for 28,927,000 shares of our common stock, there is currently
      an
      aggregate of 226,603,560 shares of our common stock issued and outstanding,
      including shares held in escrow.




*Secured
      Promissory Note*





We
      are
      currently in discussions with the Mercator Momentum Fund III, L.P. (“Mercator”)
      to lend us an additional $300,000 under the $1 million secured credit facility
      that we entered into with Mercator on September 7, 2007. We currently have
      outstanding $200,000 under this facility. Interest will be payable on
      the new loan will be at a rate of 8% per annum. We anticipate that the
      terms will be that the $200,000 loan and the new $300,000 loan will
      mature and both the principal and all accrued interest will become payable
      on
      the earlier of August 12, 2008 or the sale of our SaveCream assets to Eucodis
      or
      another third party buyer. The loans are secured by a first priority lien on
      all
      of our assets.




**Critical
      Accounting Policies**




The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States require management to make estimates
      and
      assumptions that affect the reported assets, liabilities, sales and expenses
      in
      the accompanying financial statements. Critical accounting policies are those
      that require the most subjective and complex judgments, often employing the
      use
      of estimates about the effect of matters that are inherently uncertain. We
      are a
      development stage company as defined by the Financial Accounting Standards
      Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 7,
“Accounting and Reporting by Development Stage Enterprises.” Accordingly, all
      losses accumulated since inception have been considered as part of our
      development stage activities. Certain other critical accounting policies,
      including the assumptions and judgments underlying them, are disclosed in the
      Note A to the Consolidated Financial Statements included in our annual report
      on
      Form 10-KSB filed for the fiscal year ended December 31, 2007. However, we
      do
      not believe that there are any alternative methods of accounting for our
      operations that would have a material affect on our financial
      statements.




19




**Results
      of Operations**





As
      discussed previously, we are attempting to sell our prior bio-pharmaceutical
      operations. Pursuant to accounting rules for discontinued operations, we have
      classified all revenue and expense in the accompanying financial statements
      related to the operations of our bio-pharmaceutical business as “discontinued
      operations.” Since all of our operations prior to March 2007 related to the
      bio-pharmaceutical business, all of our revenue and expense, with the exception
      of estimated general corporate overhead, has been reclassified into “Loss from
      Discontinued Operations” in the accompanying Condensed Consolidated Statements
      of Operations for all periods presented.





*Revenues
      and Gross Profit* .
      We are
      a development stage company, and have not had significant revenues from our
      operations or reached the level of our planned operations. We have discontinued
      our prior bio-pharmaceutical operations during March 2007. In September 2007,
      we
      commenced operations in our new Jatropha business, but we are still are in
      the
      pre-development agricultural stage of our operations and, therefore, do not
      anticipate generating significant revenues from the sale of bio-fuel products
      until 2009. We are, however, attempting to generate cash in 2008 from the
      forward sale of carbon credits and possibly from future oil delivery contracts.
      As a development stage company, we have no recognized revenue in the three
      months ended March 31, 2008.





*Operating
      Expenses* .
      Our
      general and administrative expenses related to continuing operations for the
      three months ended March 31, 2008 were $511,025 compared to $251,327 for the
      three months ended March 31, 2007, and includes share-based compensation of
      $79,709 and $175,200 for the two periods. For the three months ended March
      31,
      2008, general and administrative expenses principally include expenses such
      as
      compensation paid to officers and employees, share-based compensation,
      insurance, director fees, accounting costs, legal costs, consulting expenses,
      payments for third-party services, and travel expenses incurred in connection
      with our Jatropha operations. For the three months ended March 31, 2007, general
      and administrative expenses principally included expenses such as director
      fees,
      accounting costs, certain legal costs, certain consulting expenses, and an
      allocation of our employees’ compensation as general corporate overhead. Other
      general and administrative expenses more directly related to the operation
      and
      disposal of our bio-pharmaceutical business were included in Loss from
      Discontinued Operations.





We
      have
      not recorded any research and development cost in association with our new
      Jatropha business. Plantation
      development costs are being accumulated in the balance sheet during the
      development period and will be accounted for in accordance with Statement of
      Position 85-3, *Accounting
      by Agricultural Producers and Agricultural Cooperatives* . Plantation
      development costs are not currently being depreciated. Upon completion of the
      plantation development, those costs will be depreciated over the shorter of
      the
      useful life of the related asset or over the term of the lease.





*Other
      Income/ Expense* .
      During
      the three months ended March 31, 2007, we recorded $194,019 as unrealized gain
      on financial instrument. This non-cash gain is the result of the periodic
      revaluation of certain warrants classified as a liability in the financial
      statements because we
      were
      unable to guarantee that there would be enough shares of authorized common
      stock
      to settle “freestanding instruments.” Accordingly, all of the warrants attached
      to the convertible preferred stock resulting
      from the issuance of the Series A Convertible Preferred Stock entered into
      in October 2004 and March 2005, as well as other warrants and options outstanding
      on March 11, 2005 or issued during the remainder of 2005 and through 2007
      (except for stock options issued to employees) were measured at their fair
      value
      and recorded as additional liability in the financial statements characterized
      as a “Financial Instrument.” For the period from December 31, 2007 through
      January 29, 2008, the fair value of this liability decreased by $5,469. On
      January 29, 2008, the shareholders of the Company approved an increase in the
      number of authorized shares of common stock from 250 million to 500 million.
      Consequently, we are now able to settle all ‘freestanding instruments” and
      reclassified the liability, characterized in the accompanying financial
      statements as “Financial Instrument”, in the amount of $2,161,045, as permanent
      equity in January 2008.




20




Interest
      income increased from $148 for the three months ended March 31, 2007 to $3,863
      for the three months ended March 31, 2008 because of our increased cash balances
      as a result of the issuance of preferred stock and a note payable during the
      fourth quarter of 2007.




Interest
      expense increased from $7,740 for the three months ended March 31, 2007 to
      $15,030 for the three months ended March 31, 2008 because of new borrowings
      under secured promissory note during the fourth quarter of 2007.




*Loss
      from Discontinued Operations.* Our
      Loss
      from Discontinued Operations was $253,310 for the three months ended March
      31,
      2008 compared to $109,163 for the corresponding period of 2007. For the three
      months ended March 31, 2008, the Loss from Discontinued Operations consists
      solely of the foreign currency transaction loss related to changes in the
      exchange rate on certain liabilities included in “Current Liabilities Associated
      with Assets held for Sale”. For the three months ended March 31, 2007, the Loss
      from Discontinued Operations includes revenue of $200,000 reduced by expenses
      related to the operation and disposal of our bio-pharmaceutical business.





**Liquidity
      And Capital Resources**





As
      of
      March 31, 2008, we had $260,465 in cash and had a working capital deficit of
      $6,116,664. Since our inception, we have financed our operations primarily
      through private sales of equity and debt financing.




Our
      ability to fund our liquidity and working capital needs will be dependent upon
      certain pending and potential transactions. The principal pending transaction
      is
      the sale of certain of our legacy pharmaceutical assets. In July 2007, we
      executed an Asset Sale Agreement with Eucodis pursuant to which we agreed to
      sell our SaveCream asset for an aggregate of € 4,007,534
      (or approximately U.S. $6,332,000 based on the currency conversion rate in
      effect as of March 31, 2008). Earlier this year, entered into a letter agreement
      with Eucodis pursuant to which we agreed that the price for the assets
      ( € 4,007,534)
      would remain the same, but that the amount indebtedness that Eucodis is required
      to assume will be reduced by € 332,875,
      and the amount to be paid at closing would be increased by this € 332,875.
      The closing of the sale to Eucodis was scheduled to occur in April 2008. The
      closing did not occur, and the letter agreement with Eucodis has expired.
      Although we are still in discussions with Eucodis, and we have taken steps
      to
      market and sell the SaveCream assets to other potential buyers, no assurance
      can
      be given that this sale will be completed in the near future as we had until
      recently expected.




In
      order
      to fund ongoing operations, in September 2007 we entered into the Loan Agreement
      with Mercator Momentum Fund III, L.P. (“Mercator”). Pursuant to the loan
      agreement, Mercator made available to us a secured term credit facility in
      principal amount of up to $1,000,000. Interest is payable on the Loan at a
      rate
      of 12% per annum, payable monthly. As of May 8, 2008, the remaining outstanding
      principal balance of amounts we borrowed under the loan agreement is $200,000.
      We are currently in discussions with Mercator to advance an additional $300,000
      to us under this loan agreement and agreed to lower the interest rate under
      the
      loan agreement to 8% and to extend the maturity date of the loans thereunder
      to
      August 12, 2008. The loan is secured by a first priority lien on all of our
      assets.




In
      November 2007, we issued 13,000 shares of our newly created Series B Convertible
      Preferred Stock to two accredited investors for an aggregate of
      $1,300,000.




21




We
      are
      currently funding our operations from the Mercator loans and from the proceeds
      of the sale of the Series B Convertible Preferred Stock. However, we do not have
      sufficient cash to continue our current operations past August 2008 and our
      business plan calls for significant infusion of additional capital to establish
      our Jatropha plantations in Mexico and other locations. Because of our negative
      working capital position, we currently do not have the funds necessary to
      acquire and cultivate those plantations, nor will the projected proceeds from
      the Eucodis sale be sufficient for those purposes. Accordingly, we will have
      to
      obtain significant additional capital through the sale of additional equity
      and/or debt securities, the forward sale of Jatropha oil and carbon offset
      credits, and from other financing activities, such as strategic partnerships
      and
      joint ventures. The closing and funding of the GCE LLC , as previously
      discussed, is the first in an anticipated series of such transactions. While
      we
      have commenced negotiations with third parties to obtain additional funding
      from
      strategic partnerships and for the sale of carbon credits, no assurance can
      be
      given that we will have sufficient capital available to continue to operate
      our
      business in 2008 or that we will be able to effect our new business plan in
      the
      Jatropha Business. If we are not able to raise additional funds in the near
      term, we will have to reduce our operations, revise our business plan, and
      either temporarily or permanently cease operations.





On
        April
        29, 2008, GCE LLC, our newly formed subsidiary, was funded and the acquisition
        of the land for the Jatropha Farm completed. Operating and development funds
        of
        $957,271 (net of transaction costs) were also received by GCE LLC and are
        being
        utilized toward development of the Jatropha Farm.




We
      have
      no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation
      S-K.





**ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK** .




Not
      applicable.




**ITEM
      4T. CONTROLS AND PROCEDURES.**




**Evaluation
      Of Disclosure Controls** .




Our
      management evaluated the effectiveness of our "disclosure controls and
      procedures" (as defined in the Securities Exchange Act of 1934 (Exchange Act)
      Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this
      quarterly report, as required by paragraph (b) of Exchange Act Rules 13a-15
      or
      15d-15.




Based
      on
      that evaluation, we have concluded that as of the end of the period covered
      by
      this quarterly report, our disclosure controls and procedures are effective
      at a
      reasonable assurance level in ensuring that information required to be disclosed
      by us in our reports is recorded, processed, summarized and reported within
      the
      required time periods. The foregoing conclusion is based, in part, on the fact
      that we are a small public company in the development stage of our new Jatropha
      Business, with no current revenues and only three employees. In addition, to
      date, we have outsourced all of our accounting and bookkeeping functions to
      a
      third-party accounting firm.




**Management's
      Report On Internal Control Over Financial Reporting** . ****




Our
      management is responsible for establishing and maintaining adequate internal
      control over our financial reporting. Internal control over financial reporting
      is a process to provide reasonable assurance regarding the reliability of our
      financial reporting for external purposes in accordance with generally accepted
      accounting principles. Internal control over financial reporting includes
      policies and procedures that: (i) pertain to maintaining records that, in
      reasonable detail, accurately and fairly reflect our transactions; (ii) provide
      reasonable assurance that transactions are recorded as necessary for preparation
      of our financial statements and that receipts and expenditures of company assets
      are made in accordance with management authorization; and (iii) provide
      reasonable assurance that unauthorized acquisition, use or disposition of
      company assets that could have a material effect on our financial statements
      would be prevented or detected on a timely basis. Because of its inherent
      limitations, internal control over financial reporting is not intended to
      provide absolute assurance that a misstatement of our financial statements
      would
      be prevented or detected.




As
      of the
      end of the period covered by this quarterly report, we have concluded that
      our
      internal controls over financial reporting are effective at a reasonable
      assurance level in ensuring that information required to be disclosed by us
      in
      our reports is recorded, processed, summarized and reported within the required
      time periods. The evaluation of our internal controls over financial reporting
      was based on the framework in Internal Control — Integrated Framework issued by
      the Committee of Sponsoring Organizations of the Treadway
      Commission.




22




*Limitations
      on the Effectiveness of Internal Controls* .
      Our
      management does not expect that our internal control over financial reporting
      will necessarily prevent all fraud and material error. Our internal controls
      over financial reporting are designed to provide reasonable assurance of
      achieving our objectives. We have concluded that our internal controls over
      financial reporting are effective at that reasonable assurance level. Further,
      the design of a control system must reflect the fact that there are resource
      constraints, and the benefits of controls must be considered relative to their
      costs. Because of the inherent limitations in all control systems, no evaluation
      of controls can provide absolute assurance that all control issues and instances
      of fraud, if any, within our company have been detected. These inherent
      limitations include the realities that judgments in decision-making can be
      faulty, and that breakdowns can occur because of simple error or mistake.
      Additionally, controls can be circumvented by the individual acts of some
      persons, by collusion of two or more people, or by management override of the
      internal control. The design of any system of controls also is based in part
      upon certain assumptions about the likelihood of future events, and there can
      be
      no assurance that any design will succeed in achieving its stated goals under
      all potential future conditions. Over time, control may become inadequate
      because of changes in conditions, or the degree of compliance with the policies
      or procedures may deteriorate.





*Changes
      in Internal Controls* .
      There
      was no change in the Company’s internal control over financial reporting during
      the three months ended March 31, 2008 that has materially affected, or is
      reasonably likely to materially affect, its internal control over financial
      reporting.







**PART
      II**




**ITEM
      1.**  **LEGAL
      PROCEEDINGS** .




There
      have been no material developments with respect to any of the legal proceedings
      described in our previously filed Annual Report on Form 10-KSB.




**ITEM
      1.A**  **RISK
      FACTORS**




**Risks
      Relating to Our Business**




*We
      have no direct operating history in the feedstock and bio-diesel industries,
      which makes it difficult to evaluate our financial position and our business
      plan.*





Until
      early in 2007, we were a development stage bio-pharmaceutical company engaged
      in
      developing two potential drug candidates. Since our inception through December
      31, 2007, we generated only $1,157,000 of revenues and accumulated net losses
      of
      over $26 million. During 2007, we terminated our operations as a
      bio-pharmaceutical company and have commenced developing a new business in
      the
      biofuels industry. However, since we have only recently commenced our operations
      as a biofuels company and have not yet generated any revenues from our new
      operations, we have no operating history in that line of business on which
      a
      decision to invest in our company can be based. The future of our company
      currently is dependent upon our ability to implement our new business plan
      in
      the Jatropha Business. While we believe that our business plan, if implemented
      as drafted, will make our company successful, we have no operating history
      against which we can test our plans and assumptions, and therefore cannot
      evaluate the likelihood of success.





*The
      Jatropha Business that we are commencing is a new and highly risky business
      that
      has not been conducted on a similar scale in North America.*





Our
      business plan calls for a large scale planting and harvesting of Jatropha
      plants, primarily outside of the United States, and for the subsequent
      production and sale of Jatropha oil (and other Jatropha byproducts) for use
      as a
      biofuel primarily in the United States. We are commencing a new business and
      will be subject to all of the risks normally associated with new businesses,
      including risks related to the large scale production of plants that have not
      heretofore been grown in large scale plantations, logistical issues related
      to
      the oil and biomass produced at such new plantations, market acceptance,
      uncertain pricing of our products, developing governmental regulations, and
      the
      lack of an established market for our products.




23




*Since
      we currently have a limited amount of cash available, and are not generating
      any
      revenues from either our legacy bio-pharmaceutical business or our new Jatropha
      Business, we are dependent upon the potential sale of carbon credit purchase
      contracts, potential future delivery of Jatropha oil purchase contracts, on
      any
      proceeds that we may receive from the sale of out legacy bio-pharmaceutical
      assets, and on our ability to raise additional funds to continue our operations
      and existence.*




We
      currently only have a limited amount of cash available, which cash is not
      sufficient to fund our anticipated future operating needs beyond August
      2008. However, management believes that several pending contractual events
      will
      provide additional cash infusion to the company by May 31, 2008. Neither our
      legacy bio-pharmaceutical business, nor our new Jatropha Business currently
      generate any revenues from which we can pay our administrative and operating
      expenses. However, some of our direct expenses related to the development of
      the
      Jatropha Farm are now being reimbursed by GCE Mexico I, LLC, a Delaware limited
      liability company (“GCE LLC”) and a 50% owned subsidiary that we operate. We
      also are currently contemplating a carbon credit sales transaction and may
      receive funds from the sale of our SaveCream rights. Until recently, we had
      agreed to sell our SaveCream assets to Eucodis. Our agreement with Eucodis
      recently expired, and we have not renewed that agreement while we pursue
      alternative purchasers. Nevertheless, Eucodis has informed us that it still
      intends to make an offer to purchase the SaveCream assets and that such sale
      could occur in May or June 2008. No assurance can be given that the pending
      contract or funding events and/or the SaveCream sale to Eucodis or another
      third
      party will occur, or that it will occur during the time period we anticipate.




We
      will
      continue to incur administrative and general operating expenses without revenues
      until we begin selling Jatropha oil, or until we complete the sales of carbon
      credit purchase contracts. Based on our current monthly operating expenses
      and
      our projected future operating expenses, even if the SaveCream sale closes
      in
      the near future, we will need to obtain significant additional funding during
      2008 for our planned Mexico Jatropha plantations and our ongoing operating
      expenses. Such additional funds could be obtained from the sale of equity,
      from
      forward purchase payments for our products, joint venture arrangements, carbon
      credit sales, or debt financing. While we are currently engaged in discussions
      regarding various of these financial arrangements, there can be no assurance
      that we will be able to complete any of these future arrangements or that we
      will be able to obtain the capital we require. In addition, we cannot be sure
      that any financing that we may obtain will be on terms that are commercially
      favorable for us. In the event that we do not obtain additional funding in
      the
      near future, we may not be able to maintain our current operations and will
      not
      be able to implement our business plan.




In
      addition, our Jatropha Business will require that we acquire and cultivate
      a
      large amount of land and otherwise incur significant initial start-up expenses
      related to establishing the Jatropha plantations required for our proposed
      business. Other than our first GCE LLC joint venture, we currently do not have
      the capital that is necessary to acquire additional land or to otherwise fund
      the large up-front expenses, nor have any additional entities agreed to provide
      us with such funds. Accordingly, the success of our new Jatropha Business is
      contingent on, among other things, our ability to raise the necessary capital
      to
      fund our planned Jatropha Business expenditures. Historically, we have raised
      capital through the issuance of debt and equity securities. However, given
      the
      risks associated with a new, untested biofuels business, the risks associated
      with our common stock (as discussed below), and our status as a small,
      relatively unknown public company, we cannot guarantee that we will be able
      to
      raise capital, or if we are able to raise capital, that such capital will be
      in
      the amounts needed. Our failure to raise capital, when needed and in sufficient
      amounts and under acceptable terms, will severely impact our ability to develop
      our Jatropha Business.




24




*Our
      agreement to sell our SaveCream assets to Eucodis has expired, and any possible
      near-term sale of those assets is uncertain and is dependent upon events beyond
      our control.*




We
      previously had entered into an agreement with Eucodis pursuant to which we
      agreed to sell our legacy SaveCream drug candidate assets to Eucodis. Eucodis
      has informed us that it wants to complete the purchase of the SaveCream assets
      as soon as possible and that it has an agreement in place for the funding needed
      to complete that sale. However, the financing that Eucodis is obtaining has
      not
      yet been received, and our agreement with Eucodis has expired. Although Eucodis
      has told us that it still desires to purchase the SaveCream assets no assurance
      can be given that Eucodis will be able to obtain that financing. We have taken
      preliminary steps to find an alternative buyer for these assets, but any such
      sale is expected to take a longer period of time and it is uncertain if a buyer
      will ever be found. While we believe that our SaveCream assets have substantial
      value and will be attractive to other pharmaceutical companies, we neither
      know
      the exact amount that potential buyers would pay for those assets nor when
      we
      would be able to sell/license those assets. Accordingly, if Eucodis does not
      purchase the SaveCream assets, our ability to monetize our remaining legacy
      pharmaceutical assets is uncertain.




*Our
      business could be significantly impacted by changes in government regulations
      over energy policy.*




Our
      planned operations and the properties we intend to cultivate are subject to
      a
      wide variety of federal, provincial and municipal laws and regulations,
      including those governing the use of land, type of development, use of water,
      use of chemicals for fertilizer, pesticides, export or import of various
      materials including plants, oil, use of biomass, handling of materials, labor
      laws, storage handling of materials, shipping, and the health and safety of
      employees. As such, the nature of our operations exposes us to the risk of
      claims with respect to such matters and there can be no assurance that material
      costs or liabilities will not be incurred in connection with such claims. In
      addition, these governmental regulations, both in the U.S. and in the foreign
      countries in which we may conduct our business, may restrict and hinder our
      operations and may significantly raise our cost of operations. Any breach by
      our
      company of such legislation may also result in the suspension or revocation
      of
      necessary licenses, permits or authorizations, civil liability and the
      imposition of fines and penalties, which would adversely affect our ability
      to
      operate and our financial condition.




Further,
      there is no assurance that the laws, regulations, policies or current
      administrative practices of any government body, organization or regulatory
      agency in the United States or any other jurisdiction, will not be changed,
      applied or interpreted in a manner which will fundamentally alter the ability
      of
      our company to carry on our business. The actions, policies or regulations,
      or
      changes thereto, of any government body or regulatory agency, or other special
      interest groups, may have a detrimental effect on our company. Any or all of
      these situations may have a negative impact on our operations.




*Our
      future growth is dependent upon strategic relationships within the feedstock
      and
      bio-diesel industries. If we are unable to develop and maintain such
      relationships, our future business prospects could be significantly
      limited.*




Our
      future growth will generally be dependent on relationships with third parties,
      including alliances with feedstock oil and bio-diesel processors and
      distributors. In addition, we will likely rely on third parties to oversee
      the
      operations and cultivation of the Jatropha plants in our non-U.S. properties.
      Accordingly, our success will be significantly dependent upon our ability to
      establish successful strategic alliances with third parties and on the
      performance of these third parties. These third parties may not regard their
      relationship with us as important to their own business and operations, and
      there is no assurance that they will commit the time and resources to our joint
      projects as is necessary, or that they will not in the future reassess their
      commitment to our business. Furthermore, these third parties may not perform
      their obligations as agreed. In the event that a strategic relationship is
      discontinued for any reason, our business, results of operations and financial
      condition may be materially adversely affected.




25




*We
      will depend on key service providers for assistance and expertise in beginning
      operations and any failure or loss of these relationships could delay our
      operations, increase our expenses and hinder our success.*




Because
      of our limited financial and personnel resources, and because our Jatropha
      plantations are expected to be established primarily outside of the United
      States, we will have to establish and maintain relationships with several key
      service providers for land acquisition, the development and cultivation of
      Jatropha plantations, labor management, the transportation of Jatropha oil
      and
      biomass, and other services. We have already established such a relationship
      with the Lodemo Group in Mexico concerning the cultivation and management of
      our
      Jatropha nurseries and plantations in Mexico and the transportation of our
      products. Accordingly, our ability to develop our Jatropha Business in Mexico,
      and our success in Mexico, will to a large extent be dependent upon the efforts
      and services of the Lodemo Group. While the Lodemo Group has significant
      experience in diesel distribution and sales, liquids transportation, logistics,
      land development and agriculture, no assurance can be given that our joint
      operations with the Lodemo Group will be successful or that we will be able
      to
      achieve our goals in Mexico.




*A
      significant decline in the price of oil could have an adverse impact in our
      profitability.*




Our
      success is dependent in part to the current high price of crude oil and on
      the
      high price of seed oils that are currently used to manufacture bio-diesel.
      A
      significant decline in the price of either crude oil or the alternative seed
      oils will have a direct negative impact on our financial performance
      projections.




*There
      are risks associated with conducting our business operations in foreign
      countries, including political and social unrest.*




Our
      proposed agricultural operations will be primarily located in foreign countries,
      beginning in Mexico. Accordingly, we are subject to risks not typically
      associated with ownership of U.S. companies and therefore should be considered
      more speculative than investments in the U.S.




Mexico
      is
      a developing country that has experienced a range of political, social and
      economic difficulties over the last decade. Our operations could be affected
      in
      varying degrees by political instability, social unrest and changes in
      government regulation relating to foreign investment, the biofuels industry,
      and
      the import and export of goods and services. Operations may also be affected
      in
      varying degrees by possible terrorism, military conflict, crime, fluctuations
      in
      currency rates and high inflation.




In
      addition, Mexico has a nationalized oil company, and there can be no assurance
      that the government of Mexico will continue to allow our business and our assets
      to compete in any way with their interests. Our operations could be adversely
      affected by political, social and economic unrest in Mexico and the other
      foreign countries we plan for commence agricultural operations.




*The
      cost of developing and operating our agricultural projects significantly exceeds
      our current financial budget.*




Our
      preliminary budget contemplates the cultivation of 20,000-hectares of Jatropa
      in
      Mexico. According to our business plan, this will be the first of several other
      large plantations used in our feedstock/biofuel operations. In addition, we
      will
      have to construct a plant nursery and research facility as well as a seed oil
      extraction facility. We currently do not have the funds necessary to fund our
      planned operations. Unless we are able to obtain the necessary funds on
      economically viable terms, our Jatropha Business will not succeed, and we will
      not be able to meet our business goals. In addition, even if we obtain the
      initial funds necessary to establish our plantation and facilities, the costs
      to
      develop and implement our proposed plantation and support facilities, and our
      other operational costs could significantly increase beyond our expectations
      due
      to economic factors, design modifications, implementation or construction delays
      or cost overruns. In such an event, our profitability and ultimately the
      financial condition of our company will be adversely affected.




26




*We
      plan to grow rapidly and our inability to keep up with such growth may adversely
      affect our profitability.*




We
      plan
      to grow rapidly and significantly expand our operations. This growth will place
      a significant strain on our management team and other company resources. We
      will
      not be able to implement our business strategy in a rapidly evolving market
      without effective planning and management processes. We have a short operating
      history and have not implemented sophisticated managerial, operational and
      financial systems and controls. We are required to manage multiple relationships
      with various strategic partners, including suppliers, distributors, and other
      third parties. To manage the expected growth of our operations and personnel,
      we
      will have to significantly supplement our existing managerial, financial and
      operational staff, systems, procedures and controls. If we are unable to
      supplement and complete, in a timely manner, the improvements to our systems,
      procedures and controls necessary to support our future operations, our
      operations will not function effectively. In addition, our management may be
      unable to hire, train, retain, motivate and manage required personnel, or
      successfully identify, manage and exploit existing and potential market
      opportunities. As a result, our business and financial condition may be
      adversely affected.




*Our
      business will not be diversified because we will be primarily concentrated
      in
      one industry. As a consequence, we may not be able to adapt to changing market
      conditions or endure any decline in the bio-diesel industry.*




We
      expect
      our business to consist primarily of sales of feedstock oil harvested from
      the
      Jatropha plant, and bio-diesel production and sales. We do not have any other
      lines of business or other sources of revenue to rely upon if we are unable
      to
      produce and sell feedstock oil and bio-diesel, or if the markets for such
      products decline. Our lack of diversification means that we may not be able
      to
      adapt to changing market conditions or to withstand any significant decline
      in
      the bio-diesel industry.




*Reductions
      in the price of bio-diesel, and decreases in the price of petroleum-based fuels
      could affect the price of our feedstock, resulting in reductions in our actual
      revenues.*





Historically,
      bio-diesel prices have been highly correlated to the Ultra Low Sulfur (“ULS”)
      diesel prices. Increased volatility in the crude oil market has an effect on
      the
      stability and long-term predictability of ULS diesel, and hence the biofuels
      prices in the domestic and international markets. Crude oil prices are impacted
      by wars and other political factors, economic uncertainties, exchange rates
      and
      natural disasters. A reduction in petroleum-based fuel prices may have an
      adverse effect on bio-diesel prices and could apply downward pressure on
      feedstock, affecting revenues and profits in the feedstock industry, which
      could
      adversely affect our financial condition.




*There
      are several agreements and relationships that remain to be negotiated, executed
      and implemented which will have a critical impact on our operations, expenses
      and profitability.*




We
      have
      several agreements, documents and relationships that remain to be negotiated,
      executed and implemented before we can develop fully commence our new
      operations, including agreements relating to the construction of our proposed
      seed processing plant and other support facilities for our Jatropha plantation
      in Mexico. In some cases, the parties with whom we would need to establish
      a
      relationship have yet to be identified. Our expectations regarding the likely
      terms of these agreements and relationships could vary greatly from the terms
      of
      any agreement or relationship that may eventually be executed or established.
      If
      we are unable to enter into these agreements or relationships on satisfactory
      terms, or if revisions or amendments to existing terms become necessary, the
      construction of our proposed seed processing plant and the commencement of
      our
      related operations could be delayed, our expenses could be increased and our
      profitability could be adversely affected and the value of your investment
      could
      decline.




*Delays
      due to, among others, weather, labor or material shortages, permitting or zoning
      delays, or opposition from local groups, may hinder our ability to commence
      operations in a timely manner.*




Our
      development schedule assumes the commencement of planting in the first half
      of
      2008, with oil production anticipated 18 months thereafter. We could incur
      delays in the implementation of that plan or the construction of support
      facilities due to permitting or zoning delays, opposition from local groups,
      adverse weather conditions, labor or material shortages, or other causes. In
      addition, changes in political administrations at the federal, state or local
      level that result in policy changes towards the large scale cultivation of
      Jatropha or towards biofuels in general could result in delays in our timetable
      for development and commencement of operations. Any such delays could adversely
      affect our ability to commence operations and generate revenue.




27




*We
      may be unable to locate suitable properties and obtain the development rights
      needed to build and expand our business.*




Our
      business plan focuses on identifying and developing agricultural properties
      (plantations, nurseries, etc.) for the production of biofuels feedstock. The
      availability of land for this activity is key to our projected revenue and
      profitability. Our ability to acquire appropriate land in the future is
      uncertain and we may be required to delay planting, which may create
      unanticipated costs and delays. In the event that we are not successful in
      identifying and obtaining rights on suitable land for our agricultural and
      processing facilities, our future prospects for profitability will likely be
      affected, and our financial condition and resulting operations may be adversely
      affected.




*Technological
      advances in feedstock oil production methods in the bio-diesel industry could
      adversely affect our ability to compete and the value of your investment.*




Technological
      advances could significantly decrease the cost of producing feedstock oil and
      biofuels. There is significant research and capital being invested in
      identifying more efficient processes, and lowering the cost of producing
      feedstock oil and biofuels. We expect that technological advances in feedstock
      oil/biofuel production methods will continue to occur. If improved technologies
      become available to our competitors, they may be able to produce feedstock
      oil,
      and ultimately biofuels, at a lower cost than us. If we are unable to adopt
      or
      incorporate technological advances into our operations, our ability to compete
      effectively in the feedstock/biofuels market may be adversely affected, which
      in
      turn will affect our profitability.




*The
      development of alternative fuels and energy sources may reduce the demand for
      biofuels, resulting in a reduction in our profitability.*




Alternative
      fuels, including a variety of energy alternatives to biofuels, are continually
      under development. Technological advances in fuel-engines and exhaust system
      design and performance could also reduce the use of biofuels, which would reduce
      the demand for bio-diesel. Further advances in power generation technologies,
      based on cleaner hydrocarbon based fuels, fuel cells and hydrogen are actively
      being researched and developed. If these technological advances and alternatives
      prove to be economically feasible, environmentally superior and accepted in
      the
      marketplace, the market for biofuels could be significantly diminished or
      replaced, which would adversely affect our financial condition.




*Our
      ability to hire and retain key personnel and experienced consultants will be
      an
      important factor in the success of our business and a failure to hire and retain
      key personnel may result in our inability to manage and implement our business
      plan.*




We
      are
      highly dependent upon our management, and to a lesser extent on the consulting
      services provided to us by Mobius Risk Group, LLC, a company we have retained
      to
      provide us with consulting services related to the development of our Jatropha
      Business. The loss of the services of one or more of these individuals or of
      Mobius may impair management's ability to operate our company. We have not
      purchased key man insurance on any of our officers, which insurance would
      provide us with insurance proceeds in the event of their death. Without key
      man
      insurance, we may not have the financial resources to develop or maintain our
      business until we could replace such individuals or to replace any business
      lost
      by the death of such individuals. We may not be able to attract and retain
      the
      necessary qualified personnel. If we are unable to retain or to hire qualified
      personnel as required, we may not be able to adequately manage and implement
      our
      business.




28




*Our
      operating costs could be higher than we expect, and this could reduce our future
      profitability.*




In
      addition to general economic conditions, market fluctuations and international
      risks, significant increases in operating, development and implementation costs
      could adversely affect our company due to numerous factors, many of which are
      beyond our control. These increases could arise for several reasons, such
      as:


·
              Increased
                  cost for land acquisition;
 ·
              Increased
                  unit costs of labor for nursery, field preparation and
                  planting;
 ·
              Increased
                  costs for construction of
                  facilities;
 ·
              Increased
                  transportation costs for required nursery and field workers;
 ·
              Increased
                  costs of supplies and sub-contacted labor for preparing of land
                  for
                  planting;
 ·
              Increase
                  costs for irrigation, soil conditioning, soil maintenance;
                  or
 ·
              Increased
                  time for planting and plant care and
                  custody.




Upon
      completion of our field developments, our operations will also subject us to
      ongoing compliance with applicable governmental regulations, including those
      governing land use, water use, pollution control, worker safety and health
      and
      welfare and other matters. We may have difficulty complying with these
      regulations and our compliance costs could increase significantly. Increases
      in
      operating costs would have a negative impact on our operating income, and could
      result in substantially decreased earnings or a loss from our operations,
      adversely affecting our financial condition.




*Fluctuations
      in the Mexican peso to U.S. dollar exchange rate may adversely affect our
      reported operating results.*




The
      Mexican peso is the primary operating currency for our initial business
      operations while our financial results are reported in U.S. dollars. Because
      our
      costs will be primarily denominated in pesos, a decline in the value of the
      dollar to the peso could negatively affect our actual operating costs in U.S.
      dollars, and our reported results of operations. We do not currently engage
      in
      any currency hedging transactions intended to reduce the effect of fluctuations
      in foreign currency exchange rates on our results of operations. We cannot
      guarantee that we will enter into any such currency hedging transactions in
      the
      future or, if we do, that these transactions will successfully protect us
      against currency fluctuations.




*Risk
      of abandoned operations or decommissioning costs are unknown and may be
      substantial.*





We
      may be
      responsible for costs associated with abandoning land development and product
      processing facilities, which we intend to use for production of biofuels
      feedstock. We expect to have long term commitments on land and facilities and
      short to medium commitments for labor and other services. Abandonment of these
      developments and contracts and the associated decommissioning costs could be
      substantial and may have an effect on future profitability.




*Our
      future profitability is dependent upon many natural factors outside of our
      control. If these factors do not produce favorable results our future business
      profitability could be significantly affected.*





Our
      future profitability ** is
      mainly
      dependent on the production output from our agricultural operations. There
      are
      many factors that can effect growth and fruit production of the Jatropha plant
      including weather, nutrients, pests and other natural enemies of the plant.
      Many
      of these are outside of our direct control and could be devastating to our
      operations.




**Risks
      Relating to Our Common Stock**




*Our
      stock is thinly traded, so you may be unable to sell your shares at or near
      the
      quoted bid prices if you need to sell a significant number of your shares.*




The
      shares of our common stock are thinly traded on the OTC Bulletin Board, meaning
      that the number of persons interested in purchasing our common shares at or
      near
      bid prices at any given time may be relatively small or non-existent. This
      situation is attributable to a number of factors, including the fact that we
      are
      a small company which is relatively unknown to stock analysts, stock brokers,
      institutional investors and others in the investment community that generate
      or
      influence sales volume, and that even if we came to the attention of such
      persons, they tend to be risk-averse and would be reluctant to follow an
      unproven, early stage company such as ours or purchase or recommend the purchase
      of our shares until such time as we became more seasoned and viable. As a
      consequence, there may be periods of several days or more when trading activity
      in our shares is minimal or non-existent, as compared to a seasoned issuer
      which
      has a large and steady volume of trading activity that will generally support
      continuous sales without an adverse effect on share price. We cannot give you
      any assurance that a broader or more active public trading market for our common
      shares will develop or be sustained, or that current trading levels will be
      sustained. Due to these conditions, we can give you no assurance that you will
      be able to sell your shares at or near bid prices or at all if you need money
      or
      otherwise desire to liquidate your shares.




29




*Our
      existing directors, officers and key employees hold a substantial amount of
      our
      common stock and may be able to prevent other shareholders from influencing
      significant corporate decisions.*




As
      of
      March 31, 2008, our directors and executive officers, beneficially owned
      approximately 35% of our outstanding common stock. These shareholders, if they
      act together, may be able to direct the outcome of matters requiring approval
      of
      the shareholders, including the election of our directors and other corporate
      actions such as:


·
              our
                  merger with or into another company;
  ·
              a
                  sale of substantially all of our assets; and
  ·
              amendments
                  to our articles of incorporation.
  The
        decisions of these shareholders may conflict with our interests or those
        of our
        other shareholders.
  *The
        market price of our stock may be adversely affected by market
        volatility.*
  The
        market price of our common stock is likely to be volatile and could fluctuate
        widely in response to many factors, including:
  ·
              fluctuation
                  in the world price of crude oil;
  ·
              market
                  changes in the biofuels industry;
  ·
              government
                  regulations affecting renewable energy businesses and
                  users;
  ·
              actual
                  or anticipated variations in our operating
                  results;
  ·
              our
                  success in meeting our business goals and the general development
                  of our
                  proposed operations;
  ·
              general
                  economic, political and market conditions in the U.S. and the foreign
                  countries in which we plan to operate;
                  and
  ·
                the
                    occurrence of any of the risks described in this Annual
                    Report.


*Obtaining
      additional capital though the sale of common stock will result in dilution
      of
      shareholder interests.*




We
      plan
      to raise additional funds in the future by issuing additional shares of common
      stock or other securities, which may include securities such as convertible
      debentures, warrants or preferred stock that are convertible into common stock.
      Any such sale of common stock or other securities will lead to further dilution
      of the equity ownership of existing holders of our common stock. Additionally,
      the existing options, warrants and conversion rights may hinder future equity
      offerings, and the exercise of those options, warrants and conversion rights
      may
      have an adverse effect on the value of our stock. If any such options, warrants
      or conversion rights are exercised at a price below the then current market
      price of our shares, then the market price of our stock could decrease upon
      the
      sale of such additional securities. Further, if any such options, warrants
      or
      conversion rights are exercised at a price below the price at which any
      particular shareholder purchased shares, then that particular shareholder will
      experience dilution in his or her investment.




30




*We
      are unlikely to pay dividends on our common stock in the foreseeable
      future.*




We
      have
      never declared or paid dividends on our stock. We currently intend to retain
      all
      available funds and any future earnings for use in the operation and expansion
      of our business. We do not anticipate paying any cash dividends in the
      foreseeable future, and it is unlikely that investors will derive any current
      income from ownership of our stock. This means that your potential for economic
      gain from ownership of our stock depends on appreciation of our stock price
      and
      will only be realized by a sale of the stock at a price higher than your
      purchase price.




*Trading
      of our stock may be restricted by the Securities and Exchange Commission's
      penny
      stock regulations, which may limit a shareholder's ability to buy and sell
      our
      stock.*




The
      Securities and Exchange Commission has adopted regulations which generally
      define “penny stock” to be any equity security that has a market price less than
      $5.00 per share or an exercise price of less than $5.00 per share, subject
      to
      certain exceptions. Our securities are covered by the penny stock rules, which
      impose additional sales practice requirements on broker-dealers who sell to
      persons other than established customers and “accredited investors.” The term
“accredited investor” refers generally to institutions with assets in excess of
      $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
      income exceeding $200,000 or $300,000 jointly with their spouse. The penny
      stock
      rules require a broker-dealer, prior to a transaction in a penny stock not
      otherwise exempt from the rules, to deliver a standardized risk disclosure
      document in a form prepared by the Securities and Exchange Commission, which
      provides information about penny stocks and the nature and level of risks in
      the
      penny stock market. The broker-dealer also must provide the customer with
      current bid and offer quotations for the penny stock, the compensation of the
      broker-dealer and its salesperson in the transaction and monthly account
      statements showing the market value of each penny stock held in the customer's
      account. The bid and offer quotations, and the broker-dealer and salesperson
      compensation information, must be given to the customer orally or in writing
      prior to effecting the transaction and must be given to the customer in writing
      before or with the customer's confirmation. In addition, the penny stock rules
      require that prior to a transaction in a penny stock not otherwise exempt from
      these rules, the broker-dealer must make a special written determination that
      the penny stock is a suitable investment for the purchaser and receive the
      purchaser's written agreement to the transaction. These disclosure requirements
      may have the effect of reducing the level of trading activity in the secondary
      market for the stock that is subject to these penny stock rules. Consequently,
      these penny stock rules may affect the ability of broker-dealers to trade our
      securities. We believe that the penny stock rules discourage investor interest
      in and limit the marketability of our common stock.




**ITEM
      2.**  **UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS** .




Effective
      April 18, 2008, we entered into an exchange agreement (“Exchange Agreement”)
      with Mercator Momentum Fund, L.P., Mercator Momentum Fund III, L.P., and Monarch
      Pointe Fund, Ltd. (collectively, “MAG Funds”), the holders of our issued and
      outstanding Series A Convertible Preferred Stock (“Series A Stock”). Pursuant to
      the Exchange Agreement, the MAG Funds exchanged 28,927 shares of Series A Stock,
      constituting all of the issued and outstanding shares of Series A Stock, for
      an
      aggregate of 28,927,000 shares of our common stock. The exchange ratio was
      determined by dividing the $100 purchase price of the shares (the “Series A
      Purchase Price” as defined in Certificate of Designations of Preferences and
      Rights for the Series A Stock) by $0.10.




**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES** .




None.




31




**ITEM
      4.**  **SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS** .




On
      January 29, 2008, we held a special meeting of our stockholders to vote on
      the
      following matters:




(1) **** To
      approve the sale of all of our rights in and to “SaveCream”, a
      developmental-stage topical aromatase inhibitor cream, to Eucodis
      Pharmaceuticals Forschungs und Entwicklungs GmbH. Votes cast were as
      follows:





For
            106,019,635Against
            1,453,285Abstain
            84,940





(2)
      To
      approve an amendment of our Amended and Restated Articles of Incorporation
      to
      increase the authorized number of shares of our common stock from 250,000,000
      to
      500,000,000 shares. . Votes cast were as follows:


For
              103,584,505Against
              3,878,055Abstain
              95,300


(3)
      To
      approve an amendment of our Amended and Restated Articles of Incorporation
      to
      change our company’s name to “Global Clean Energy Holdings, Inc.” Votes cast
      were as follows:


For
              139,581,396Against
              318,935Abstain
              1,462,415
 **ITEM
        5.**  **OTHER
        INFORMATION**




None.




32


**ITEM
      6.**  **EXHIBITS**




10.5
            
            Definitive
              Master
              Agreement dated as of July 29, 2006, by and between MDI Oncology, Inc.
              and
              Eucodis
              Forschungs und Entwicklungs GmbH*10.16
            
            Employment
                Agreement dated March 20, 2008, between Global Clean Energy Holdings,
                Inc.
                and Bruce K. Nelson (incorporated by reference from Current Report
                on Form
                8-K filed April 8, 2008)10.17
            
            Exchange
                Agreement, effective April 18, 2008, by and between Global Clean
                Energy
                Holdings, Inc., on the one hand, and Mercator Momentum Fund, L.P.,
                Mercator Momentum Fund III, L.P., and Monarch Pointe Fund, Ltd.,
                on the
                other hand (incorporated by reference from Current Report on Form
                8-K
                filed April 24, 2008)31.1
            
            Rule
                13a-14(a) Certification, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002 *31.2
            
            Rule
                13a-14(a) Certification, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002 *32.1
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002*32.2
            
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002*




*
      Filed
      herewith


33


**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      the
      registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




GLOBAL
                  CLEAN ENERGY HOLDINGS, INC.Date:
                May 13, 2008
              By:
              /s/
                BRUCE K. NELSONBruce K. NelsonChief
                Financial Officer




34