##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
 Washington, D.C. 20549
 Form 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED June 30, 2007
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-50842
 Earth Biofuels, Inc.
 (Exact name of small business issuer specified in its charter)
 Delaware
    
    71-0915825(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer
Identification Number)
 3001 Knox Street, Suite 403
Dallas, TX 75205  (Address of principal executive offices)  (214) 389-9800  (Issuers telephone number)
 þ o
 o þ
  o þ




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##### 



EARTH BIOFUELS, INC.
 FORM 10-QSBA QUARTERLY REPORT
 PART I FINANCIAL INFORMATIONItem 1.
    
    Financial Statements
    
    
    3Consolidated Balance Sheets at June 30, 2007 and
December 31, 2006 (unaudited)
    
    
    3Consolidated Statements of Operations for the Three and
Six Month Periods Ended June 30, 2007 and 2006
(unaudited)
    
    
    4Consolidated Statement of Stockholders Equity for the
Six Month period ended June 30, 2007 (unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Six Month
Periods Ended June 30, 2007 and 2006 (unaudited)
    
    
    6Notes to Consolidated Financial Statements (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    18Item 3.
    
    Controls and Procedures
    
    
    39PART II OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    40Item 2.
    
    Equity Securities and Use of Proceeds
    
    
    42Item 3.
    
    Defaults upon Senior Securities
    
    
    50Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    50Item 5.
    
    Other Information
    
    
    50Item 6.
    
    Exhibits
    
    
    50Signatures
    
    
    56Certification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of CEO Pursuant to Rule 13a-14(a)Certification of CFO Pursuant to Rule 13a-14(a)Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  2




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 Item 1.
 EARTH BIOFUELS, INC.
 
 CONSOLIDATED BALANCE SHEETS
   June 30,
    
    December 31,2007
    
    2006Current AssetsCash and cash equivalents
    
    $
    534
    
    
    $
    291Investments in equity securities
    
    
    47
    
    
    
    285Trade accounts receivable, net of allowances totaling $0 and $109
    
    
    3,287
    
    
    
    3,019Inventory, finished goods
    
    
    737
    
    
    
    785Prepaid expenses and other current assets
    
    
    4,696
    
    
    
    1,471Advances to related parties
    
    
    1,310Notes receivable from related parties
    
    
    2,704
    
    
    
    857Total Current Assets
    
    
    13,315
    
    
    
    6,708Property, Plant and equipment, net of accumulated depreciation
of $9,416 and $7,854
    
    
    27,817
    
    
    
    27,015Investments and advances
    
    
    13,836
    
    
    
    40,860Investment  related party
    
    
    30
    
    
    
    100Notes receivable from related parties
    
    
    14,909
    
    
    
    5,824Deferred financing fees
    
    
    2,393
    
    
    
    2,445Goodwill, net of impairment of $10,623 and $315 in 2007 and 2006,
respectively
    
    
    26,986
    
    
    
    30,032Prepaid and other long term assets
    
    
    4,212
    
    
    
    747Total Assets
    
    $
    103,498
    
    
    $
    113,731Current LiabilitiesAccounts payable
    
    $
    7,914
    
    
    $
    8,064Accrued interest payable
    
    
    30,926
    
    
    
    11,944Payables to related parties
    
    
    4,537
    
    
    
    6,826Demand Notes
    
    
    288
    
    
    
    250Line of Credit
    
    
    1,574
    
    
    
    5,679Short term convertible promissory notes, net of discount of
$34,220 and $39,633
    
    
    19,380
    
    
    
    13,967Income taxes payable
    
    
    1,818
    
    
    
    1,818Total Current Liabilities
    
    
    66,437
    
    
    
    48,548Long term debt
    
    
    24,000
    
    
    
    Total liabilities
    
    
    90,437
    
    
    
    48,548Commitments and contingenciesStockholders EquityPreferred stock, $.001 par value, 15,000,000 shares authorized,
0 shares issued and outstanding
    
    
    
    
    
    
    Common stock, $.001 par value, 400,000,000 shares authorized,
240,425,887 and 233,047,225 shares issued and outstanding
    
    
    240
    
    
    
    233Additional paid-in capital
    
    
    152,603
    
    
    
    145,555Other comprehensive income
    
    
    
    
    
    
    (570
    )Treasury stock at cost (279,200 shares)
    
    
    
    
    
    
    (463
    )Accumulated deficit
    
    
    (139,782
    )
    
    
    (79,572
    )Total Stockholders Equity
    
    
    13,061
    
    
    
    65,183Total Liabilities and Stockholders Equity
    
    $
    103,498
    
    
    $
    113,731
  3




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##### Table of Contents



EARTH BIOFUELS, INC.
 
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Restated)
    
    
    
    
    
    
    (Restated)Sales revenue
    
    $
    6,742
    
    
    $
    9,006
    
    
    $
    13,387
    
    
    $
    17,623Cost of sales
    
    
    5,794
    
    
    
    7,849
    
    
    
    12,086
    
    
    
    17,403Gross profit
    
    
    948
    
    
    
    1,157
    
    
    
    1,301
    
    
    
    220Compensation
    
    
    1,407
    
    
    
    5,348
    
    
    
    6,521
    
    
    
    11,652Other selling, general and
administrative
    
    
    3,462
    
    
    
    5,995
    
    
    
    6,818
    
    
    
    8,590Depreciation and amortization
    
    
    1,243
    
    
    
    521
    
    
    
    2,195
    
    
    
    754Net loss from operations
    
    
    (5,164
    )
    
    
    (10,707
    )
    
    
    (14,233
    )
    
    
    (20,776
    )Other income (expense)Interest income
    
    
    208
    
    
    
    9
    
    
    
    205
    
    
    
    33Loss on sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    (121
    )
    
    
    Interest expense
    
    
    (13,551
    )
    
    
    (3,065
    )
    
    
    (29,674
    )
    
    
    (3,140
    )Loss on equity investments
    
    
    (4,192
    )
    
    
    
    
    
    
    (4,192
    )
    
    
    Impairment losses
    
    
    (10,623
    )
    
    
    
    
    
    
    (10,938
    )
    
    
    Loss on marketable securities
    
    
    (852
    )
    
    
    
    
    
    
    (852
    )
    
    
    Loss on Derivatives
    
    
    
    
    
    
    (401
    )
    
    
    
    
    
    
    (401
    )Other expenses
    
    
    (508
    )
    
    
    23
    
    
    
    (405
    )
    
    
    43Total other income (expense)
    
    
    (29,518
    )
    
    
    (3,434
    )
    
    
    (45,977
    )
    
    
    (3,465
    )Net loss
    
    $
    (34,682
    )
    
    $
    (14,141
    )
    
    $
    (60,210
    )
    
    $
    (24,241
    )Net loss per common shareBasic and diluted net loss
    
    $
    (0.17
    )
    
    $
    (0.07
    )
    
    $
    (0.29
    )
    
    $
    (0.12
    )Weighted average shares
    
    
    204,160
    
    
    
    196,649
    
    
    
    204,160
    
    
    
    196,649
  4




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##### Table of Contents



EARTH BIOFUELS, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 For the Six Months Period Ended June 30, 2007
  Common
    
    
    
    
    
    
    Additional
    
    
    OtherStock
    
    
    Common
    
    
    Paid
    
    
    Comprehensive
    
    
    Treasury
    
    
    AccumulatedShares
    
    
    Stock at Par
    
    
    in Capital
    
    
    Income (Loss)
    
    
    Stock
    
    
    Deficit
    
    
    TotalsBalance 12/31/06 (restated)
    
    
    233,047
    
    
    $
    233
    
    
    $
    145,555
    
    
    $
    (570
    )
    
    $
    (463
    )
    
    $
    (74,965
    )
    
    $
    69,790Shares issued for cash
    
    
    3,068
    
    
    
    3
    
    
    
    1,522
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,525Shares issued for services
    
    
    6,281
    
    
    
    6
    
    
    
    3,874
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,880Shares issued for exercise of
warrants
    
    
    250
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Shares issued for related party
payables
    
    
    1,000
    
    
    
    1
    
    
    
    510
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    511Unrealized loss on marketable
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (127
    )
    
    
    
    
    
    
    
    
    
    
    (127
    )Realized losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    570
    
    
    
    
    
    
    
    
    
    
    
    570Treasury Stock
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    463
    
    
    
    
    
    
    
    463Shares issued to escrow
    
    
    2,500
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Forfeiture of shares
    
    
    (6,000
    )
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Net Changes in discounts on
convertible debt and long term
debt issued with warrants
    
    
    
    
    
    
    
    
    
    
    1,142
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,142Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60,210
    )
    
    
    (34,682
    )Balance June 30, 2007
    
    
    240,426
    
    
    $
    240
    
    
    $
    152,603
    
    
    $
    
    
    
    $
    
    
    
    $
    (139,782
    )
    
    $
    13,061
  5




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##### Table of Contents



EARTH BIOFUELS, INC
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Six Month Periods Ended June 30, 2007 and 2006
  Six Months Ended June 30,2007
    
    
    2006(Restated)Cash Flows from Operating Activities:Net Loss
    
    $
    (60,210
    )
    
    $
    (24,239
    )Loss on sales of fixed assets
    
    
    121
    
    
    
    Losses on marketable securities
    
    
    697
    
    
    
    Depreciation
    
    
    1,635
    
    
    
    772Amortization of debt issuance costs
    
    
    561
    
    
    
    Impairment of investments
    
    
    4,192
    
    
    
    Goodwill impairment
    
    
    10,938
    
    
    
    Loss on derivatives
    
    
    
    
    
    
    401Share-based compensation expense
    
    
    3,875
    
    
    
    10,063Debt discount amortization
    
    
    5,410
    
    
    
    2,550Changes in assets and liabilities:Decrease (increase) in:Trade accounts receivable
    
    
    (268
    )
    
    
    (2,435
    )Notes receivable
    
    
    
    
    
    
    (100
    )Inventory
    
    
    45
    
    
    
    (6
    )Prepaid expenses & other current assets
    
    
    (3,224
    )
    
    
    970Advances to
related parties
    
    
    (1,310
    )
    
    
    (2,343
    )Notes
receivable from related party
    
    
    (1,847
    )
    
    
    476Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (149
    )
    
    
    91Accrued interest payable
    
    
    18,982
    
    
    
    Net cash provided by (used in) operating
activities
    
    
    (20,555
    )
    
    
    (13,800
    )Cash Flows From Investing Activities:Cash paid for investment
    
    
    (91
    )
    
    
    (1,175
    )Advances on
payments to related parties
    
    
    (1,779
    )
    
    
    
    )Cash paid for advances on investments
    
    
    
    
    
    
    (12,695Repayments from investments and advances
    
    
    2,355
    
    
    
    Cash paid for purchases of fixed assets
    
    
    (2,558
    )
    
    
    (3,480
    )Net cash used in investing activities
    
    
    (2,073
    )
    
    
    (17,350
    )Cash Flows From Financing Activities:Proceeds from issuance of common stock
    
    
    1,534
    
    
    
    6,743Proceeds from long term debt and line of credit
    
    
    30,036
    
    
    
    20,750Repayments of long term debt and line of credit
    
    
    (8,653
    )
    
    
    Proceeds from sale of treasury stock
    
    
    463
    
    
    
    Cash paid for debt issuance cost
    
    
    (509
    )
    
    
    (975
    )Net cash provided by financing activities
    
    
    22,871
    
    
    
    26,518Net increase (decrease) in cash
    
    
    243
    
    
    
    (4,632
    )Cash and cash equivalentsBeginning of period
    
    
    291
    
    
    
    5,070End of period
    
    $
    534
    
    
    $
    437Supplemental Cash Flow Disclosures:Cash paid for income taxes
    
    $
    
    
    
    $
    Cash paid for interest
    
    
    2,904
    
    
    
    339
  6




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NOTE 1  BASIS OF PRESENTATION
  Tax Credits
 Marketable Securities
 NOTE 2  GOING CONCERN
     7




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##### Table of Contents



NOTE 3  RESTATEMENTS
    NOTE 4  INVESTMENTS, ADVANCES AND NOTES RECEIVABLE FROM RELATED PARTIES
  8




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##### Table of Contents



Method of
    
    Investment
    
    Advances
    
    TotalDescription
    
    Accounting
    
    ($ in 000s)
    
    ($ in 000s)
    
    ($ in 000s)InvestmentsTruckers Corner
    
    Equity
    
    $
    1,120
    
    
    $
    4,530
    
    
    $
    5,650American Earth
    
    Equity
    
    
    
    
    
    
    
    
    
    
    Letters of IntentSystems Management Solutions, Inc.
    
    Cost
    
    
    
    
    
    
    
    
    
    
    Vertex Processing, LP
    
    Cost
    
    
    
    
    
    
    
    
    
    
    Biodiesel Investment Group and Bunge North America
    
    Cost
    
    
    4,976
    
    
    
    
    
    
    
    4,976Earth Ethanol and Liquafaction Corporation
    
    Cost
    
    
    
    
    
    
    
    
    
    
    Earth Ethanol and HPS Development, L.L.C.
    
    Cost
    
    
    
    
    
    
    
    
    
    
    Cordele Industrial
    
    Cost
    
    
    
    
    
    
    10
    
    
    
    10Dineh-bi-Keya
    
    Cost
    
    
    
    
    
    
    50
    
    
    
    50DFI-Albemarle Bio-Refinery, Inc.,
    
    Cost
    
    
    
    
    
    
    3,150
    
    
    
    3,150Total
    
    
    
    $
    6,096
    
    
    $
    7,740
    
    
    $
    13,836
 Investments
 Truckers
Corner
 American Earth Fuels Company
 Advances on Letters of Intent
 Systems Management Solutions, Inc. (SMS
 Vertex Processing, LP
 9




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##### Table of Contents



Biodiesel Investment Group and Bunge North America
 Earth Ethanol and Liquafaction Corporatoin,
 Earth Ethanol and HPS Development, L.L.C.
   10




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##### Table of Contents



Cordele Industrial  Investment in a
 Dineh-bi-Keya
 DFI-Albemarle Bio-Refinery, Inc.
 Other investments -
 Notes receivable from related parties 
  2007Description
    
    ($ in 000s)Truckers Corner
    
    $
    359DFI
    
    
    2,172HPS
    
    
    14,377Apollo affiliates
    
    
    8AIRO
    
    
    697Total
    
    
    17,613Less current portion
    
    
    (2,704
    )Long term notes receivable from related parties
    
    $
    14,909
 Advances to related parties 
  11




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Investment in related party 
  NOTE 6  INTANGIBLE ASSETS
   12




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##### Table of Contents



NOTE 7  DEMAND NOTES 
  NOTE 8  LINE OF CREDIT
  NOTE 9  LONG TERM DEBT
      Term debt facilities
    
    $
    24,000Unamortized discounts
    
    
    024,000Less current installments
    
    
    0Long-term debt, less current installments
    
    $
    24,000
 13




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##### Table of Contents



Debt Outstandingat June 30, 20071 year or less
    
    $
    02 years
    
    
    03 years
    
    
    24,0004 years
    
    
    05 years
    
    
    0Thereafter
    
    
    0Total future payments
    
    $
    24,000
 NOTE 10  STOCKHOLDERS EQUITY
 Warrants 
  Remaining
    
    
    
    
    
    2006Description
    
    Life
    
    Exercise Price
    
    WarrantsMay 4, 2006
convertible
debt-(debt
repaid),
warrants issued
to investor
    
    8  9 years
    
    $
    2.00
    
    
    
    920,810May 26, 2006
convertible
debt-(debt
repaid),
warrants issued
to investor and
placement agent
    
    8  9 years
    
    $
    3.84
    
    
    
    768,750June 7, 2006
convertible
debt-(debt
repaid),
warrants issued
to investor and
placement agent
    
    8  9 years
    
    $
    2.93
    
    
    
    1,545,000July 10, 2006
convertible debt
(debt repaid),
warrants issued
to investor and
placement agent
    
    9-10 years
    
    $
    2.50
    
    
    
    1,515,000July 21,2006
warrants issued
for consulting
fees
    
    9-10 years
    
    $
    .25
    
    
    
    4,000,000July 24, 2006
convertible
debt, warrants
issued to
investors
    
    9-10 years
    
    $
    2.90
    
    
    
    9,051,725August 11, 2006
convertible
debt, warrants
issued to
investors and
placement agent
    
    9-10 years
    
    $
    2.90
    
    
    
    189,655January 19,
2007, promissory
notes, warrants
issued to note
holders
    
    9-10 years
    
    $
    .01
    
    
    
    375,000February 28,
2007, long term
debt, warrants
issued to note
holders
    
    9-10 years
    
    $
    .36
    
    
    
    13,549,816March 23, 2007,
long term debt,
warrants issued
to note holders
    
    9-10 years
    
    $
    .30
    
    
    
    6,774,908
   14




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##### Table of Contents



Number of Shares
    
    
    
    
    
    
    Weighted AverageUnder Warrant
    
    
    Exercise Price
    
    
    Exercise PriceWarrants
outstanding at
December 31,
2006
    
    
    17,990,940
    
    
    $
    .25-3.84
    
    
    $
    1.02Issued
    
    
    20,699,724
    
    
    $
    .01-.36
    
    
    $
    .25Exercised
    
    
    (250,000
    )
    
    $
    .01
    
    
    $
    (.01
    )Forfeited
    
    
    (20,324,724
    )
    
    $
    .30-.36
    
    
    $
    (.25
    )Expired
    
    
    
    
    
    
    
    
    
    
    Warrants
outstanding and
exercisable at
June 30, 2007
    
    
    18,115,940
    
    
    $
    .01-$3.84
    
    
    $
    1.01
  Share-based Compensation 
   NOTE 11  RELATED PARTY TRANSACTIONS
 Advances
  2007Description
    
    ($ in 000s)Apollo International Resources, Inc.
    
    $
    3,628LNG affiliates
    
    
    909Total
    
    $
    4,537
  15




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##### Table of Contents



NOTE 12  COMMITMENTS AND CONTINGENCIES
 Registration Payments
  NOTE 13  SEGMENT INFORMATION
   LNG
    
    
    Earth Biofuels
    
    
    Consolidated($ in 000s)
    
    
    ($ in 000s)
    
    
    ($ in 000s)Six months
ended June 30,
2007Revenue
    
    $
    12,512
    
    
    
    875
    
    
    
    13,387Income (Loss) from
operations
    
    $
    1,412
    
    
    
    (111
    )
    
    
    1,301Interest Expense
    
    $
    (1,401
    )
    
    
    (28,273
    )
    
    
    (29,674
    )Net Loss for the
six months ended
June 30, 2007
    
    $
    (1,890
    )
    
    
    (58.320
    )
    
    
    (60,210
    )Property, plant
and equipment, net
    
    $
    10,974
    
    
    
    16,843
    
    
    
    27,817Total Assets
    
    $
    45,149
    
    
    
    58,349
    
    
    
    103,498Current Liabilities
    
    $
    506
    
    
    
    65,931
    
    
    
    66,437
  16




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NOTE 14  SUBSEQUENT EVENTS
  H.C. Wainwright & Co., Inc.
 17




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis.
  Overview
    Continuing Losses.
 18




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##### Table of Contents



Results of Operations
 Comparison of Six Months Ended June 30, 2007
 To Six Months Ended June 30, 2006
  Six Months EndedJune 30,2007
    
    2006Revenues:Sales revenue
    
    
    100
    %
    
    
    100
    %Cost of sales
    
    
    90
    %
    
    
    99
    %Gross profit
    
    
    10
    %
    
    
    1
    %Compensation
    
    
    49
    %
    
    
    66
    %Other selling, general and administrative
    
    
    51
    %
    
    
    49
    %Depreciation and amortization
    
    
    16
    %
    
    
    4
    %Net loss from operations
    
    
    (106
    )%
    
    
    (118
    )%Interest expense
    
    
    222
    %
    
    
    18
    %Impairments
    
    
    113
    %
    
    
    0
    %Net (loss)
    
    
    (450
    )%
    
    
    (138
    )%
 Revenue.
 19




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##### Table of Contents



Cost of Sales.
 Compensation. Share-Based Payment
 Other Selling, General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense.
 Comparison of Three Months Ended June 30, 2007
 To Three Months Ended June 30, 2006
  Three Months EndedJune 30,2007
    
    2006Revenues:Sales revenue
    
    
    100
    %
    
    
    100
    %Cost of sales
    
    
    86
    %
    
    
    87
    %Gross profit
    
    
    14
    %
    
    
    13
    %Compensation
    
    
    21
    %
    
    
    59
    %Other selling, general and administrative
    
    
    51
    %
    
    
    67
    %Depreciation and amortization
    
    
    18
    %
    
    
    6
    %Net loss from operations
    
    
    (77
    )%
    
    
    (119
    )%Interest expense
    
    
    201
    %
    
    
    34
    %Impairments
    
    
    220
    %
    
    
    0
    %Net (loss)
    
    
    (514
    )%
    
    
    (157
    )%
 Revenue.
 20




---



##### Table of Contents



Cost of Sales.
 Compensation. Share-Based Payment
 Other Selling, General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense.
 Liquidity and Capital Resources
 Overview.
    21




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##### Table of Contents



Current and Future Financing Needs 
      22




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##### Table of Contents



23




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##### Table of Contents



24




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##### Table of Contents



25




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##### Table of Contents



%
    
    Investment
    
    
    
    
    
    Note
    
    
    
    
    
    Future
    
    Future Cash
    
    Sources ofName
    
    Industry
    
    Ownership
    
    Amount
    
    Advances
    
    Receivable
    
    Total
    
    Obligations
    
    Requirement
    
    Capital(As of June 30, 2007 $ in 000s)Investments:Truckers
    
    Retail center
    
    
    50
    %
    
    
    1,120
    
    
    $
    4,530
    
    
    $
    359
    
    
    $
    6,009
    
    
    Construction
    
    Estimated $3m
    
    Seeking new
investors/lendersCorner-costs
Hillsboro, Texas
    
    
    
    (Also partially
owned by Willie
Nelson)SMS-
San Antonio, TX
    
    Biodiesal - Letter of
Intent (LOI)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Currently in
default; total
investment impairedVertex Houston,
Texas
    
    Biodiesal-Letter of Intent
*(1,600k shares issued
valued At $4,320k or
$2.70 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Currently in
litigation; total
investment impairedBiodiesel
Investment
    
    Biodiesal plant
    
    
    10
    %
    
    
    4,976
    
    
    
    
    
    
    
    
    
    
    
    4,976
    
    
    None
    
    None
    
    Subscription
agreements with
investors totaling
Group-Illinois $39m
on projectMoses
Lake-Washington
(Liquifaction LP)
    
    Ethanol plant
    
    80%
(amended to
~15%)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Construction costs
Subject to 5 day
notice termination
    
    $9.5m
    
    Additional
investors to
contribute to total
estimated project
of $58mHPS- New Orleans
    
    Ethanol Plant-LOI
    
    
    
    
    
    
    
    
    
    
    14,377
    
    
    
    
    
    
    
    14,377
    
    
    None
    
    None
    
    Litigation settled
for $5m
Non-compete and
$22m Note ReceivableDFI-North Carolina
    
    Ethanol plant-LOI
    
    
    
    
    
    
    
    
    
    
    3,150
    
    
    
    2,172
    
    
    
    5,322
    
    
    None
    
    None
    
    Additional
investors to
contribute to total
project of $25m(Note: All investments are recorded using the cost or equity method of accounting. There were no
current operations on any investments, and thus there are no related equity investment entries to
record profits and losses. All future sources of capital are to be from other investment groups
unrelated to Earth. As a result at this time Earth is not required to put in any additional
funding until other equity partners have been obtained. As other investors do come on board Earth
will finalize letters of intent and record any liabilities as required by the agreements.)Advances-Related Parties:Blue Wireless
    
    Technology
    
    10%
(Earth CEO is also
on BOD of Blue)

    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    None
    
    Provider of IT services
    
    OperationsAiro
    
    Technology
    
    0%
(Note assigned
From Blue Wireless)
    
    

    
    
    
    
    
    
    
    
    697
    
    
    
    69
    
    
    7 None
    
    None
    
    Note receivableOther Properties:Grenada, Mississippi
    
    Truck Stop
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    None
    
    None
    
    Cash flow provided
from retail
operations
 26




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##### Table of Contents



%
    
    Investment
    
    
    
    Note
    
    
    
    
    
    Future
    
    Future Cash
    
    Sources ofName
    
    Industry
    
    Ownership
    
    Amount
    
    Advances
    
    Receivable
    
    Total
    
    Obligations
    
    Requirement
    
    Capital(As of June 30, 2007 $ in 000s)Other Properties (continued):Grenada, Mississippi
    
    Office space
    
    0%
(owned by director
of Earth)
    
    
    
    
    
    
    
    
    
    
    
    
    
    Lease obligations
    
    $568,006-(Lease
payments)
    
    Cash flow provided
from retail
operationsMeridian- Mississippi
    
    Pilot Bio- Diesel
Operations
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    None
    
    None
    
    Pilot operations
with fixed assets
only- sold in 2007Subsidiaries:Durant Biofuels, Oklahoma
    
    Biodiesal Plant
    
    100%*(2,933k shares
issued for
acquisition valued
at $7,157k, or
$2.70 per share)
(part of PP&E
costs)
    
    
    15,778
    
    
    
    
    
    
    
    15,778
    
    
    Note payable
incurred for
construction
costs~$9m
    
    Methanol
Recovery System-
Est cost $3.5m
    
    Durant operationsEarth Biofuels Distribution
Co.-Texas
    
    Biodiesal
    
    100%*(6,667k 
shares issued for
acquisition of the
company valued at
$4,210k or .63 per
share) (Goodwill of
$3,981 on
acquisition deemed
impaired)
    
    
    
    
    
    
    
    
    
    
    
    
    
    None-Royalty
Contract payable to
W. Nelson for $2
cents a gallon on
all sales
    
    Contract-w/ Motiva
for biodiesal
sales-contract
cancelled in 2007
    
    Motiva SalesAmerican Earth Fuels Co.
LLC-
Texas
    
    Retail bio Stations
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    Determined to
disband operations
for this subsidiary
And to record addl
Losses of $46k.
    
    None-had previously
put down payment of
$250k on gas
stations written
off 12/31/06
    
    NAEarth Biofuels Co. LLC-Texas
    
    Biodiesal Technology
    
    
    50
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    None
    
    None
    
    Construction
contracts To build
biodiesal plantsEarth
LNG Texas
(including
subsidiaries-Arizona LnG,
LLC
And Applied LNG
Technologies USA, LLC)
(LNG companies acquired
from Parent Apollo
Resources for 18,224k
shares valued At
$39.3million/parents basis)
    
    Liquified
Natural gas
    
    
    100
    %
    
    
    39,567
    
    
    
    
    
    
    
    39,567
    
    
    $15m Note
payable- 3 yr term
note
    
    None
    
    LNG operationsEarth Ethanol Inc.
    
    Ethanol
    
    
    100
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    None
    
    None
    
    Created to hold
Investment in HPS
 27




---



##### Table of Contents



Letters of Intent:
 New Orleans
    
    Houston Facility-
    
    North Carolina Facility-Facility-HPS
    
    Vertex
    
    DFILocation
    
    Plaquemines Parish,
    
    Houston Shipping Channel,
    
    Martin County, NorthLouisiana
    
    Houston, Texas
    
    CarolinaOwnership
    
    50%
    
    51%
    
    51%Anticipated closing month
    
    August 2006
    
    August 2006
    
    August 2006Purchase PriceCash
    
    $50,000,000 plus
    
    $2,500,000
    
    $25,000,000assumption of debtShares of our Common Stock
    
    5,829,005
    
    1,500,000
    
    5% of shares of commonstock of Earth Ethanol, Inc.Months scheduled to be completed
    
    12-14 months
    
    1 month
    
    Phase I: 12-14 monthsPhase II: 6 months afterPhase IAnnual capacity (MMPGY)
    
    60-80
    
    10-20
    
    Phase I: 55Phase II: additional 50-55
  HPS-
   28




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Vertex-
  DFI-
    Additional investments entered into during the year ended 2006 were as follows:
 Truckers Corner-
 ®
  29




---



##### Table of Contents



SMS-
  Biodiesel Investment Group-
  Moses Lake, Washington
   30




---



##### Table of Contents



Subsidiaries:
 Earth Biofuels Technologies-USA
     31




---



##### Table of Contents



Earth LNG, Inc.- Topock, Arizona
        32




---



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Critical Accounting Policies and Estimates
  Revenue Recognition
 Business Combinations
 Accounting for Stock Based Compensation
 Accounting for
Derivatives
 33




---



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34




---



##### Table of Contents



Net Loss Per Share Data
 Reclassifications
 Use of Estimates
 Impairment of Long-Lived Assets
 Debtors
Accounting for a Modification or Exchange of Debt Instruments
  Off-Balance Sheet Arrangements
  Contractual obligations
 Current Debt Obligations 
  35




---



##### Table of Contents



Leases 
  36




---



##### Table of Contents



Risk Factors
    
    
    the ability to quickly bring new production capacity on stream;
    
    the fluctuating prices of feedstocks and natural gas;
    
    the ability to raise the necessary capital to fund working
capital, execute mergers, acquisitions and asset purchases;
   
    
    the prices at which others offer competitive services, including aggressive
price competition and discounting;
    
    actions taken by the Federal Government or State Governments to remove
subsidies and tax credits associated with the biodiesel business;
    
    large swings in the price of oil which will affect the price at which Earth
can purchase fuel supplies;
    
    the ability of competitors to undertake more extensive marketing campaigns;
    
    the extent, if any, to which competitors develop proprietary tools that
improve their ability to compete; and
    
    the extent of competitors responsiveness to customer needs.
     37




---



##### Table of Contents




    
    increase Earths vulnerability to general adverse economic and industry conditions;
    
    limit Earths ability to fund future working capital and other general corporate
requirements; and
    
    limit Earths flexibility in planning for, or reacting to, changes in Earths
business and the industry in which it operates.
  Forward Looking Statements
   
    
    volatility or decline of Earths stock price;
    
    potential fluctuation in quarterly results;
    
    ability of Earth to earn revenues or profits;
    
    sufficiency of revenues to cover operating costs;
    
    availability and cost of raw materials;
    
    any impact of competition, competitive products, and pricing;
    
    adequacy of capital to continue or expand its business, inability to
raise additional capital or financing to implement its business plans;
    
    ability to commercialize its technology or to make sales;
    
    overall expected growth in the alternative fuels industry;
    
    changes in interest rates and capital market conditions;
    
    changes in laws and other regulatory actions;
    
    acquisitions of business enterprises, including the ability to integrate
acquired businesses effectively;
    
    litigation with or legal claims and allegations by outside parties; and
 38




---



##### Table of Contents




    
    other assumptions described in this report, as well as
other reports filed with the United States Securities
and Exchange Commission, underlying such
forward-looking statements.
   
 Item 3.Controls and Procedures
   Extension of Compliance Date for Managements Report on Internal Control Over Financial
Reporting
    39




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##### Table of Contents



PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings
 H.C. Wainwright & Co., Inc.
  Vertex Energy, LP,
 40




---



##### Table of Contents



Two mechanics liens
 Liquafaction Corporation
 JM Allen & Associates, v.
 Security agreements
 41




---



##### Table of Contents



Item 2. Equity Securities and Use of Proceeds
 Market for Registrants Common Equity
  42




---



##### Table of Contents



Quarter Ended
    
    High
    
    LowJune 30, 2007
    
    $
    .20
    
    
    $
    .18March 31, 2007
    
    
    .41
    
    
    
    .39December 31, 2006
    
    
    1.29
    
    
    
    .98September 30, 2006
    
    
    2.35
    
    
    
    2.25June 30, 2006
    
    
    3.15
    
    
    
    2.85March 31, 2006
    
    
    2.65
    
    
    
    2.44December 31, 2005
    
    
    1.20
    
    
    
    .35September 30, 2005
    
    
    .92
    
    
    
    .24
 Holders of Record
  Dividends
  Equity Compensation Plan Information
  Number of SecuritiesRemaining Available forNumber of Securities
    
    Future Issuance UnderIssued or Issuable Upon
    
    Equity Compensation PlansExercise of Outstanding
    
    (Excluding Securities inOptions, Warrants and
    
    the First Column of ThisDescription
    
    Rights
    
    Table)Compensatory
common stock
awards approved
by security
holders
    
    
    5,000,000
    
    
    
    0Compensatory
common stock
awards and
warrants or
options not
approved by
security holders
    
    
    14,365,812
    
    
    
    N/A
 Description of Securities
 Common Stock
 Preferred Stock
 43




---



##### Table of Contents



Debt securities and Warrants 
      Accounting for Derivative Instruments and Certain Hedging Activities
 Accounting for Derivative Instruments and Certain Hedging Activities
 Registration Rights 
  44




---



##### Table of Contents



Change in Securities and Use of Proceeds 
 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 
  45




---



##### Table of Contents



46




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
    
    On May 4, 2006, we issued a $1.0 million convertible,
secured promissory note, bearing interest at 7%,
payable within thirty days upon demand by the holder,
and convertible into shares of our common stock at a
conversion price of $1.086 per share. We also issued
the investor a warrant to purchase 920,810 shares of
our common stock, exercisable until May 31, 2001 at
the lesser of $2.00 per share or 80% of the average
trading price of our common stock for the thirty
trading days prior to the exercise of the warrant. We
used the net proceeds from the sale in connection with
our biodiesel and ethanol plant acquisition strategy
and for other general corporate purposes. We granted
the note holder certain registration rights with
respect to the shares of common stock underlying the
convertible note and the warrant. The note and warrant
and a corresponding guarantee given by Apollo
Resources, our majority stockholder, were subsequently
cancelled by the holder in connection with Apollo
Resources closing on July 21, 2006 of a securities
purchase agreement with Greenwich Power.
    
    On May 26, 2006, we issued $5.0 million principal
amount of 8% senior convertible promissory notes to a
single institutional investor. The notes carried an 8%
coupon, payable quarterly, and were redeemable by us
at par at any time prior to their initial maturity
date in August 2006. The notes were not convertible
until after August 2006, at which time the maturity
date was extendable to November 2006 at the holders
option. The notes were convertible into our common
stock at a conversion price equal to the greater of
$1.00 per share or 75% of the weighted average price
per share of our common stock on a five-day volume
weighted average prior to closing. We also issued
five-year warrants to purchase 750,000 shares of
common stock to the investor and five-year warrants to
purchase 18,750 shares of common stock to our
placement agent, both at an exercise price of $3.84
per share. We used the net proceeds from the sale in
connection with our biodiesel and ethanol plant
acquisition strategy and for other general corporate
purposes. We granted the investor certain registration
rights with respect to the shares of common stock
issuable upon conversion of the convertible notes and
exercise of the warrants. The remaining unpaid
principal and accrued and unpaid interest on these
notes were repaid in full with a portion of the net
proceeds from the senior convertible promissory notes
we issued in July 2006. The warrants remain
outstanding.
    
    On June 2, 2006, we issued a convertible note with a
principal amount of $500,000 to one individual. The
note bore interest at 8% per year, which was payable
on July 28, 2006, August 28, 2006, January 28, 2007
and April 28, 2007. The note had a maturity date of
April 28, 2007. The note was convertible into shares
of our common stock at a conversion price equal to the
lesser of $0.50 per share or 70% of the weighted
average price per share of our common stock. We used
the net proceeds from the sale in connection with our
biodiesel and ethanol plant acquisition strategy and
for other general corporate purposes. We granted the
note holder
 47




---



##### Table of Contents



certain registration rights with respect to the shares of common stock
underlying the convertible notes. On July 13, 2006, the holder of the note
exercised its option to convert the notes, and we issued an aggregate of
1,000,000 shares of our common stock to such holder in exchange for the
cancellation of the note.
 
    
    On June 7, 2006, we issued $10 million aggregate
principal amount of senior convertible notes to four
institutional investors. The notes carried an 8%
coupon, payable quarterly, and were redeemable by us
at par at any time prior to their initial maturity
date in September 2006. The notes were not convertible
until after September 2006, at which time the maturity
date was extendable to December 2006 at the holders
option. The notes were convertible into our common
stock at a conversion price equal to the greater of
$1.00 per share or 70% of the weighted average price
per share of our common stock on a five-day volume
weighted average prior to closing. We also issued to
the investors five-year warrants to purchase an
aggregate of 1,500,000 shares of common stock to the
investors and five-year warrants to purchase 45,000
shares of common stock to our placement agent, at an
exercise price of $2.93 per share. We used the net
proceeds from the sale, in concert with other funds,
to continue to execute our business plan, specifically
the construction or acquisition of additional
biodiesel and ethanol facilities, and for other
general corporate purposes, including working capital.
We granted the investor certain registration rights
with respect to the shares of common stock underlying
the convertible notes and warrants. The remaining
unpaid principal and accrued and unpaid interest on
these notes were repaid in full with a portion of the
net proceeds from the senior convertible promissory
notes we issued in July 2006. The warrants remain
outstanding.
    
    On July 10, 2006, Earth entered into a securities
purchase agreement, pursuant to which Earth issued an
8% senior convertible note with a principal amount of
$5.0 million to one institutional investor. Earth also
issued five-year warrants to purchase an aggregate of
1,500,000 shares of common stock to the investor and
five-year warrants to purchase 15,000 shares of common
stock to Earths placement agent, both at an exercise
price of $2.50 per share. On July 24, 2006, Earth used
a portion of the net proceeds from its July 24, 2006
offering to repay in full the remaining unpaid
principal and accrued and unpaid interest on this
note.
    
    On July 13, 2006, holders of convertible notes issued
during January through June of 2006, exercised their
conversion option and Earth issued an aggregate of
3,000,000 shares of common stock in exchange for the
conversion of notes with an aggregate principal amount
of $1.5 million.
    
    On July 24, 2006, Earth entered into a securities
purchase agreement pursuant to which Earth issued
$52.5 million aggregate senior convertible notes that
are due in 2011 to eight institutional investors. The
notes initially carry an 8% coupon, payable quarterly,
and are convertible into shares of common stock at
$2.90 per share. In 2007, the coupon may decline to 6%
upon Earth achieving certain financial milestones. The
notes will begin to amortize in equal, quarterly
payments beginning in 2007. In connection with the
issuance of the notes, Earth also issued five-year
warrants to purchase 9,051,725 shares of common stock
to the investors and five-year warrants to purchase
1,357,759 shares of common stock to Earths placement
agent, at $2.90 per share. Earth used the net proceeds
from this offering to repay in full the remaining
unpaid principal and accrued and unpaid interest on
our $20.0 million aggregate principal amount of senior
convertible promissory notes issued in May, June and
July 2006, and expects to use the remaining proceeds
from the offering for its program of building and
acquiring interests in biodiesel and ethanol
 48




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##### Table of Contents



production facilities, and for other general corporate
purposes.
    
    In connection with the 8% senior convertible notes
issued in July, 2006, Earth incurred loan costs in the
amount of $3,452,000, which will be amortized over the
term of the convertible notes.
    
    On August 11, 2006, Earth entered into a securities
purchase agreement pursuant to which Earth issued $1.1
million aggregate senior convertible notes that are
due in 2011 to two institutional investors. The notes
initially carry an 8% coupon, payable quarterly, and
are convertible into shares of common stock at $2.90
per share. In 2007, the coupon may decline to 6% upon
Earth achieving certain financial milestones. The
notes will begin to amortize in equal, quarterly
payments beginning in March, 2007. In connection with
the issuance of the notes, Earth also issued five-year
warrants to purchase 232,759 shares of common stock to
the investors at $2.90 per share. The shares issued to
an accredited investor included registration rights
therein. As of year end December 31, 2006 these shares
have not been registered, however, the company will
include these rights upon filing of its registration
statement to be filed during the year ended 2007.
 49




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##### Table of Contents



Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 ITEM 6. EXHIBITS
  ExhibitNumber
    
    Description3.01
    
    Certificate of Incorporation (filed as Exhibit 3.1 to the
Report on Form 10-QSB for the period ending September 30,
2005 and incorporated herein by reference)3.02
    
    Bylaws (filed as Exhibit 3.2 to the Report on Form 10-QSB
for the period ending September 30, 2005 and incorporated
herein by reference)10.1
    
    Merger Agreement dated March 31, 2006 by and among Earth
Biofuels, Inc., Southern Bio Fuels, Inc. and certain
affiliates of Southern Bio Fuels, Inc. (filed as Exhibit
10.1 to the Report on Form 8-K filed April 10, 2006 and
incorporated herein by reference)10.2
    
    Stock Purchase Agreement dated October 1, 2005 by and
between The Wing Sail Company and Earth Biofuels, Inc.
(filed as Exhibit 10.1 to the Report on Form 8-K filed
December 14, 2005 and incorporated herein by reference)10.3(1)
    
    Indemnification Agreement dated September 29, 2005 by and
between Meadow Springs, Inc. (as predecessor to Earth
Biofuels, Inc.) and William O. Locket, Jr.10.4(1)
    
    Indemnification Agreement dated September 29, 2005 by and
between Meadow Springs, Inc. (as predecessor to Earth
Biofuels, Inc.) and Morgan Freeman.10.5(1)
    
    Indemnification Agreement dated September 29, 2005 by and
between Meadow Springs, Inc. (as predecessor to Earth
Biofuels, Inc.) and Bruce Blackwell.10.6(1)
    
    Lease Agreement dated October 2005 by and between R. Bruce
Blackwell and Earth Biofuels, LLC.10.7(1)
    
    Intercompany Credit Agreement dated January 1, 2006 by and
between Earth Biofuels, Inc. and Apollo Resources
International, Inc.10.8(1)
    
    Registration Rights Agreement dated January 27, 2006 by and
between Earth Biofuels, Inc. and Tom Groos.
 50




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##### Table of Contents



ExhibitNumber
    
    Description10.9(1)
    
    Earth Biofuels, Inc. Convertible Promissory Note dated
January 27, 2006 issued by Earth Biofuels, Inc. in favor
of Tom Groos.10.10(1)
    
    Registration Rights Agreement dated January 30, 2006 by
and between Earth Biofuels, Inc. and Marc Weill.10.11(1)
    
    Earth Biofuels, Inc. Convertible Promissory Note dated
January 30, 2006 issued by Earth Biofuels, Inc. in favor
of Marc Weill.10.12(1)
    
    Membership Interest Purchase Agreement dated March 1, 2006
by and between Earth Biofuels, Inc. and Dr. Miguel J.
Dabdoub.10.13(1)
    
    Registration Rights Agreement dated March 29, 2006 by and
between Earth Biofuels, Inc. and Josh Cohen.10.14(1)
    
    Earth Biofuels, Inc. Convertible Promissory Note dated
March 29, 2006 issued by Earth Biofuels, Inc. in favor of
Josh Cohen.10.15(1)
    
    Registration Rights Agreement dated March 31, 2006 by and
between Earth Biofuels, Inc. and Tom Groos.10.16(1)
    
    Earth Biofuels, Inc. Convertible Promissory Note dated
March 31, 2006 issued by Earth Biofuels, Inc. in favor of
Tom Groos.10.17(1)
    
    Letter of Intent dated June 13, 2006 by and between Earth
Biofuels, Inc. and HPS Development, L.L.C.10.17(1)
    
    Letter of Intent dated June 13, 2006 by and between Earth
Biofuels, Inc. and HPS Development, L.L.C.10.18(1)
    
    Agreement dated August 2, 2006 by and between Earth
Biofuels, Inc. and HPS Development, L.L.C.10.19
    
    Securities Purchase Agreement dated April 28, 2006, by and
among Earth Biofuels, Inc. and the buyers listed on the
schedule thereto (incorporated by reference to Exhibit 4.1
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on May 10, 2006).10.20
    
    Registration Rights Agreement dated April 28, 2006 by and
among Earth Biofuels, Inc. and the buyers listed on the
schedule thereto (incorporated by reference to Exhibit 4.2
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on May 10, 2006).10.21(1)
    
    Registration Rights Agreement dated May 4, 2006 by and
between Earth Biofuels, Inc. and Greenwich Power, L.L.C.10.22(1)
    
    Convertible Secured Promissory Note-Bridge Loan dated May
4, 2006 issued by Earth Biofuels, Inc. in favor of
Greenwich Power, L.L.C.10.23(1)
    
    Warrant to Purchase Shares of Common Stock of Earth
Biofuels, Inc. dated May 4, 2006 issued to Greenwich
Power, L.L.C.10.24(1)
    
    Unconditional Guaranty of Payment and Performance dated
May 4, 2006 executed by Apollo Resources International,
Inc. in favor of Greenwich Power, L.L.C.10.25(1)
    
    Letter of Intent dated May 13, 2006 by and between Earth
Biofuels, Inc. and Vertex Energy, LP.10.26
    
    Securities Purchase Agreement dated May 26, 2006 by and
between Earth Biofuels, Inc. and the purchasers listed on
the schedule thereto (incorporated by reference to Exhibit
4.1 of the Current Report on Form 8-K filed by Earth
Biofuels, Inc. with the SEC on May 31, 2006).10.27(1)
    
    Amended and Restated Securities Purchase Agreement dated
May 26, 2006 by and between Earth Biofuels, Inc. and the
purchasers listed on the schedule thereto.10.28
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels,
Inc. dated May 26, 2006, issued to Evolution Master Fund,
Ltd. (incorporated by reference to Exhibit 4.3 of the
Current Report on Form 8-K filed by Earth Biofuels, Inc.
with the SEC on May 31, 2006).10.29(1)
    
    Warrant No. 1r to Purchase Common Stock of Earth Biofuels,
Inc. dated May 26, 2006 issued to Evolution Master Fund,
Ltd.10.30(1)
    
    Warrant No. 2 to Purchase Common Stock of Earth Biofuels,
Inc. dated May 26, 2006 issued to Cowen & Company LLC.10.31
    
    8% Senior Convertible Note dated May 26, 2006 issued by
Earth Biofuels, Inc. in favor of Evolution Master Fund,
Ltd. (incorporated by reference to Exhibit 4.2 of the
Current Report on Form 8-K filed by Earth Biofuels, Inc.
with the SEC on May 31, 2006).
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##### Table of Contents



ExhibitNumber
    
    Description10.32
    
    Registration Rights Agreement dated May 26, 2006 by and
between Earth Biofuels, Inc. and the purchasers listed on
the signature pages thereto (incorporated by reference to
Exhibit 4.4 of the Current Report on Form 8-K filed by
Earth Biofuels, Inc. with the SEC on May 31, 2006).10.33(1)
    
    Amended and Restated Registration Rights Agreement dated
May 26, 2006 by and between Earth Biofuels, Inc. and the
purchasers listed on the signature pages thereto.10.34(1)
    
    Registration Rights Agreement dated June 2, 2006 by and
between Earth Biofuels, Inc. and Marc Weill.10.35(1)
    
    Earth Biofuels, Inc. Convertible Promissory Note dated June
2, 2006 issued by Earth Biofuels, Inc. in favor of Marc
Weill.10.36(1)
    
    Convertible Promissory Note, dated May 31, 2006, made by
Albemarle Bio-Refinery, Inc. in favor of Earth Biofuels,
Inc.10.37(1)
    
    Convertible Promissory Note, dated July 19, 2006, made by
Albemarle Bio-Refinery, Inc. in favor of Earth Biofuels,
Inc.10.38
    
    Securities Purchase Agreement dated June 7, 2006 by and
among Earth Biofuels, Inc. and the purchasers listed on the
schedule thereto (incorporated by reference to Exhibit 4.1
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006).10.39
    
    Registration Rights Agreement dated June 7, 2006, by and
among Earth Biofuels, Inc. and the purchasers listed on the
schedule thereto (incorporated by reference to Exhibit 4.8
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006).10.40
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Capital Ventures
International (incorporated by reference to Exhibit 4.6 of
the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006).10.41(1)
    
    Warrant No 1r to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Capital Ventures
International.10.42
    
    8% Senior Convertible Note dated June 7, 2006 issued by
Earth Biofuels, Inc. in favor of Capital Ventures
International (incorporated by reference to Exhibit 4.3 of
the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006).10.43
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Castlerigg Master
Investments Ltd. (incorporated by reference to Exhibit 4.5
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006)10.44
    
    8% Senior Convertible Note dated June 7, 2006 issued by
Earth Biofuels, Inc. in favor of Castlerigg Master
Investments, Ltd (incorporated by reference to Exhibit 4.2
of the Current Report on Form 8-K filed by Earth Biofuels,
Inc. with the SEC on June 12, 2006).10.45
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Radcliffe SPC, Ltd for
and on behalf of the Class A Convertible Crossover
Segregated Portfolio (incorporated by reference to Exhibit
4.7 of the Current Report of Form 8-K filed by Earth
Biofuels, Inc. with the SEC on June 12, 2006)10.46(1)
    
    Warrant No 1r to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Radcliffe SPC, Ltd. for
and on behalf of the Class A Convertible Crossover
Segregated Portfolio.10.47
    
    8% Senior Convertible Note dated June 7, 2006 issued by
Earth Biofuels, Inc. in favor of Radcliffe SPC, Ltd. for
and on the behalf of the Class A Convertible Crossover
Segregated Portfolio (incorporated by reference to Exhibit
4.4 of the Current Report on Form 8-K filed by Earth
Biofuels, Inc. with the SEC on June 12, 2006).10.48(1)
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Cowen & Company LLC.10.49(1)
    
    Warrant No. 1r to Purchase Common Stock of Earth Biofuels,
Inc. dated June 7, 2006 issued to Cowen & Company LLC.10.50(1)
    
    Consulting Agreement dated June 9, 2006 by and between
Earth Biofuels, Inc. and Herb Meyer.10.51(1)
    
    Securities Purchase Agreement dated July 10, 2006 by and
between Earth Biofuels, Inc. and the purchasers signatory
thereto.
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ExhibitNumber
    
    Description10.52(1)
    
    Registration Rights Agreement dated July 10, 2006 by and between Earth
Biofuels, Inc. and the purchasers signatory thereto.10.53(1)
    
    8% Senior Convertible Note dated July 11, 2006 issued by Earth Biofuels, Inc.
to Castlerigg Master Investments Ltd.10.54(1)
    
    Warrant No. 1 to Purchase Common Stock of Earth Biofuels, Inc. dated July 11,
2006 issued to Castlerigg Master Investments Ltd.10.55(1)
    
    Warrant No. 2 to Purchase Common Stock of Earth Biofuels, Inc. dated July 11,
2006 issued to Castlerigg Master Investments Ltd.10.56(1)
    
    Warrant No. 2 to Purchase Common Stock of Earth Biofuels, Inc. dated July 11,
2006 issued to Cowen & Company LLC.10.57(1)
    
    Registration Rights Agreement dated July 21, 2006 by and between Apollo
Resources International, Inc. and Greenwich Power, LLC and acknowledged by
Earth Biofuels, Inc.10.58(1)
    
    Registration Rights Agreement dated July 21, 2006 by and between Apollo
Resources International, Inc. Greenwich Power II, LLC and acknowledged by
Earth Biofuels, Inc.10.59(1)
    
    Registration Rights Agreement dated July 21, 2006 by and between Earth
Biofuels, Inc. and Lance A Bakrow.10.60(1)
    
    Warrant to Purchase Shares of Common Stock of Earth Biofuels, Inc. dated July
21, 2006 to Lance A. Bakrow.10.61
    
    Securities Purchase Agreement dated July 24, 2006 by and among Earth Biofuels,
Inc. and the buyers listed on the schedule thereto (incorporated by reference
to Exhibit 4.1 of the Current Report on Form 8-K filed by Earth Biofuels, Inc.
with the SEC on July 25, 2006).10.62
    
    Registration Rights Agreement dated July 24, 2006 among Earth Biofuels, Inc.
and the buyers listed on the schedule thereto (incorporated by reference to
Exhibit 4.2 of the Current Report on Form 8-K filed by Earth Biofuels, Inc.
with the SEC on July 25, 2006).10.63(1)
    
    Lock-Up Letter dated July 24, 2006 from Apollo Resources International, Inc.10.64(1)
    
    Lock-Up Letter dated July 24, 2006 from Dennis G. McLaughlin III.10.65(1)
    
    Warrant No. 3 to Purchase Common Stock of Earth Biofuels, Inc. dated July 24,
2006 by Cowen & Company LLC.10.66
    
    Form of Warrant to Purchase Common Stock of Earth Biofuels, Inc. dated July
24, 2006 (incorporated by reference to Exhibit 4.4 of the Current Report on
Form 8-K filed by Earth Biofuels, Inc. with the SEC on July 25, 2006).10.67
    
    Form of Notes dated as of July 24, 2006 issued by Earth Biofuels, Inc.
(incorporated by reference to Exhibit 4.3 on the Current Report on Form 8-K
filed by Earth Biofuels, Inc. with the SEC on July 25, 2006).10.68
    
    Merger Agreement, dated March 31, 2006, by and between Earth Biofuels,
Southern Bio Fuels, Inc., Southern Bio Fuels, LLC, and the other members and
individuals party thereto (incorporated by reference to Exhibit 10.1 of the
Current Report on Form 8-K filed by Earth Biofuels, Inc. with the SEC on April
10, 2006).10.69(1)
    
    Securities Purchase Agreement, dated August 19, 2005, by and among Apollo
Resources International, Inc., Tommy Johnson, Bruce Blackwell, William H.
Webster and Robert Glenn.10.70(1)
    
    Purchase and Sale Agreement dated February 25, 2005 by and between Earth
Biofuels, Inc., R. Bruce Blackwell, Tommy Johnson, Robert Glenn, William
Webster and Apollo Resources International, Inc.10.71(1)
    
    Promissory Note issued on March 2, 2006 to Southern Bio Fuels, LLC.10.72(1)
    
    Commercial Guaranty made on March 2, 2006 by Dennis G. McLaughlin, III in
favor of Southern Biofuels, LLC.10.73(1)
    
    Promissory Note issued on March 31, 2006 to Southern Bio Fuels, LLC.10.74(1)
    
    Commercial Guaranty made on March 31, 2006 by Dennis G. McLaughlin, III in
favor of Southern Bio Fuels, LLC.
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ExhibitNumber
    
    Description10.75(1)
    
    Commercial Guaranty made on March 31, 2006 by R. Bruce
Blackwell in favor of Southern Bio Fuels, LLC.10.76(1)
    
    Commercial Guaranty made on March 31, 2006 by Tommy
Johnson in favor of Southern Bio Fuels, LLC.10.77(1)
    
    Earth Biofuels, Inc. 2006 Stock Option and Award Plan
effective April 15, 2006.10.78(1)
    
    Sublicense Agreement dated April 1, 2006 by and between
Earth Biofuels, Inc. and Biodiesel Venture, L.P.10.79(1)
    
    Securities Purchase Agreement dated August 11, 2006 by
and among Earth Biofuels, Inc. and the buyers listed on
the schedule.10.80(1)
    
    Revised Schedule of buyers on Securities Purchase
Agreement dated August 11, 2006.10.81(1)
    
    Registration Rights Agreement dated August 11, 2006 among
Earth Biofuels, Inc. and the buyers listed on the
schedule.10.82(1)
    
    Form of Notes dated as of August 11, 2006 issued by Earth
Biofuels, Inc. with Whalehaven Capital Fund Ltd.10.83(1)
    
    Form of Notes dated as of August 11, 2006 issued by Earth
Biofuels Inc. with Gundyco ITF Excalibur Ltd Partnership.10.84(1)
    
    Form of Warrant to Purchase Common Stock of Earth
Biofuels, Inc. dated August 11, 2006, with Whalehaven
Capital Fund Ltd.10.85(1)
    
    Form of Warrant to Purchase Common Stock of Earth
Biofuels, Inc. dated August 11, 2006, with Gundyco ITF
Excalibur Ltd Partnership.10.86(1)
    
    Form of Warrant to purchase Common Stock of Earth
Biofuels, Inc. dated July 21, 2006 with Lance Bakrow, and
Consulting Agreement with Lance Bakrow.10.87(2)
    
    Share Exchange Agreement effective as of November 17,
2006, by and between Earth Biofuels, Inc., a Delaware
corporation (Earth Biofuels) and Apollo Resources
International, Inc., a Utah corporation (Apollo).10.88
    
    Acquisition Agreement between Liquafaction Corporation,
et al and Earth Ethanol (incorporated by reference to
Exhibit 1.01 of the Current Report on Form 8-K filed by
Earth Biofuels, Inc. with the SEC on December 21, 2006).**10.89
    
    Pledge Agreement, Promissory Notes and Warrant Agreements
with and from Two Ponds, Gilcreast and Bryant Russell
Construction11(3)
    
    Code of Ethics12(3)
    
    Subsidiaries13(3)
    
    Forbearance and Amendment Agreement and related Security
and Subsidiary Agreements14(3)
    
    Letter from Nexxus re offer to Capitalize Biofuels with
$150 million in Exchange for Common Stock and Escrow
Agreement dated January 9, 200715(3)
    
    Credit Agreement dated March 23 2007 by and between
Durant Biofuels, LLC and Lenders and related Amendment
No. 1, Amended and Restated Collateral Agreement, and
Warrant Purchase and Registration Rights Agreement16(3)
    
    Credit Agreement dated February 28, 2007 by and between
Earth LNG, Inc. and Lenders, and related Guarantee and
Collateral Agreement and Warrant Purchase and
Registration Rights Agreement17(3)
    
    Loan and Security Agreement with Greenfield Commercial
Credit LLC dated March 1, 2007, and related Revolving
Credit Loan note and Guaranty18(3)
    
    Report of Independent Registered Public Accounting Firm
to the audit committee of Earth LNG, Inc.*31.1
    
    Certification of Chief Executive Officer pursuant to Rule
13a-14(a) under the Securities Act of 1934.*31.2
    
    Certification of Chief Financial Officer pursuant to Rule
13a-14(a) under the Securities Act of 1934.
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##### Table of Contents



ExhibitNumber
    
    Description*32.1
    
    Certification of Chief Executive Officer pursuant to 18
U.S.C., Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Chief Financial Officer pursuant to 18
U.S.C., Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Previously filed.+
    
    Management contract, compensatory plan or arrangement.(1)
    
    Filed as an exhibit to the registrants Report on Form 10-QSB for
the period ending September 30, 2006 filed with the SEC on
November 21, 2006.(2)
    
    Filed as an exhibit to the registrants Current Report on Form
8-K filed with the SEC on November 22, 2006(3)
    
    Filed as an exhibit to the registrants Report on Form 10-KSB for
the period ending December 31, 2006 filed with the SEC on May 18,
2007. 55




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SIGNATURE
   /s/  Dennis G. McLaughlin, III 
 56