##### 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 1934FOR THE QUARTERLY PERIOD ENDED
    MARCH 31, 2007ORo

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
  Rule 12b-2 o þ
    o þ




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##### 



EARTH
    BIOFUELS, INC.
  TABLE OF
    CONTENTS
  FORM 10-QSB
    QUARTERLY REPORT
  PART I
    FINANCIAL INFORMATIONItem 1.

Financial
    Statements


3Consolidated
    Balance Sheets at March 31, 2007 and December 31, 2006
    (unaudited)


3Consolidated
    Statements of Operations for the Three Months Ended
    March 31, 2007 and 2006 (unaudited)


4Consolidated
    Statement of Stockholders Equity for the three month
    period ended 
    March 31, 2007 (unaudited)


5Consolidated
    Statements of Cash Flows for the Three Months Ended
    March 31, 2007 and 2006 (unaudited)


6Notes to
    Consolidated Financial Statements (unaudited)


7Item 2.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


15Item 3.

Controls and
    Procedures


25PART II
    OTHER INFORMATIONItem 1.

Legal
    Proceedings


26Item 2.

Equity Securities
    and Use of Proceeds


27Item 3.

Defaults upon
    Senior Securities


34Item 4.

Submission of
    Matters to a Vote of Security Holders


34Item 5.

Other
    Information


34Item 6.

Exhibits


35Signatures


40Pledge AgreementCertification of Chief Executive OfficerCertification of Chief Financial OfficerCertification of Chief Executive OfficerCertification of Chief Financial Officer   2




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##### Table of Contents



PART I
    FINANCIAL INFORMATION Item 1. EARTH
    BIOFUELS, INC.
 CONSOLIDATED
    BALANCE SHEETS March 31,


December 31,2007


2006(Unaudited)($ in 000s, exceptper share and share amounts)ASSETSCurrent AssetsCash and cash equivalents

$
1,921


$
291Investments in equity securities


142



285Trade accounts receivable, net of
    allowances totaling $0 and $109


3,520



3,019Inventory, finished goods


802



785Prepaid expenses and other current
    assets


3,276



1,471Advances to related parties


210



Notes receivable


894



857Total Current Assets


10,765



6,708Property, Plant and equipment, net
    of accumulated depreciation of $8,517 and $7,854


28,382



27,015Investments and advances


43,429



40,860Investment  related
    party


100



100Notes receivable from related
    parties


11,266



5,824Deferred financing fees


2,570



2,445Goodwill and other intangibles,
    net of accumulated amortization of $224 and $168


29,662



30,032Prepaid and other long term assets


1,823



747Total Assets

$
127,997


$
113,731LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent
    LiabilitiesAccounts payable

$
6,977


$
8,064Accrued interest payable


10,203



7,337Payables to related parties


6,723



6,826Demand Notes


200



250Line of Credit


2,076



5,679Short term convertible promissory
    notes, net of discount of $36,922 and $39,633


16,678



13,967Income taxes payable


1,818



1,818Total Current
    Liabilities


44,675



43,941Long term debt, net of
    discounts totaling $5,235


18,765



Total liabilities


63,440



43,941Commitments 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, 246,017,970 and
    233,239,225 shares issued and outstanding at respective
    dates


246



233Additional paid-in capital


157,482



145,555Other comprehensive income


(697
)


(570
)Accumulated deficit


(92,474
)


(74,965
)Treasury stock at cost
    (279,200 shares)






(463
)Total Stockholders Equity


64,557



69,790Total Liabilities and
    Stockholders Equity

$
127,997


$
113,731    3




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##### Table of Contents



EARTH
    BIOFUELS, INC.
 CONSOLIDATED
    STATEMENTS OF OPERATIONS
    For the Three Month Periods Ended March 31, 2007 and
    2006  2007


2006(Restated)(Unaudited)($ in 000s, except per share and share amounts)RevenueSales revenue

$
6,641


$
8,231Energy production credits


4



386Total revenues


6,645



8,617Cost of sales


6,292



9,413Gross profit (loss)


353



(796
)Operating ExpensesCompensation (including share
    based compensation of $3,163 and $4,616, respectively)


5,114



4,616Other selling, general and
    administrative


3,356



2,594Depreciation and amortization


952



374Total operating
    expenses


9,422



7,584Net loss from
    operations


(9,069
)


(8,380
)Other income
    (expense)Interest expense


(8,106
)


(75
)Loss on sale of fixed assets


(120
)


Loss on equity investments


(315
)


Other income


101



43Total other income
    (expense)


(8,440
)


(32
)Loss before provision for
    income tax


(17,509
)


(8,412
)Income tax expense






454Net income (loss)


(17,509
)


(8,866
)Unrealized loss on marketable
    securities


(127
)


Total comprehensive loss

$
17,636


$
(8,866
)Net income (loss) per common
    share:Basic and dilutedNet loss

$
(.09
)

$
(.05
)Weighted average shares:Basic and diluted


202,988,783



166,668,025    4




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##### Table of Contents



EARTH
    BIOFUELS, INC.
 CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
    For the Three Month Period Ended March 31, 2007  Common





Additional


OtherStock


Common


Paid


Comprehensive


Treasury


AccumulatedShares


Stock at Par


in Capital


Income (Loss)


Stock


Deficit


Totals(Unaudited)($ in 000s except per share and share amounts)Balance
    12/31/06


233,047


$
233


$
145,555


$
(570
)

$
(463
)

$
(74,965
)

$
69,790Shares issued for cash


3,068



3



1,522















1,525Shares issued for services


5,999



6



3,817















3,823Shares issued for exercise of
    warrants


125



1



















1Shares issued for related party
    payables


1,000



1



510















511Unrealized loss on marketable
    securities














(127
)










(127
)Treasury Stock


279















463







463Shares issued to escrow


2,500



2



















2Net Changes in discounts on
    convertible debt and reversal of derivative liabilities from
    retirements of debts










6,078















6,078Net loss






















(17,509
)


(17,509
)Balance March 31,
    2007


246,018


$
246


$
157,482


$
(697
)

$
(0
)

$
(92,474
)

$
64,557    5




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 For
    the Three Month Periods Ended March 31, 2007 and
    2006
  2007


2006(Restated)(Unaudited)($ in 000s, except per share and share amounts)OPERATING ACTIVITIESNet loss

$
(17,509
)

$
(8,866
)Adjustments to reconcile net loss
    to cash provided by operating activitiesLoss on sale of fixed assets


121



Depreciation and amortization of
    intangibles


737



374Amortization of debt issuance costs


215



Goodwill impairment


315



Debt discount amortization


3,556



Share-based compensation


3,818



4,874Changes inTrade accounts receivable


(500
)


(2,596
)Inventory


(17
)


276Prepaid expenses and other current
    assets


(586
)


(532
)Other assets


(2,166
)


881Accounts payable and accrued
    expenses


(1,088
)


580Accrued interest


2,867



1,100Taxes payable






455Other liabilities


8



(111
)Net cash used in operating
    activities


(10,229
)


(3,565
)INVESTING ACTIVITIESPurchases of equity securities


(71
)


Purchases of property, plant and
    equipment


(2,243
)


(2,414
)Investments in and advances to
    related parties


(2,296
)


2,309Proceeds from the sale of
    property, plant and equipment


75



Increase in notes receivable


(5,441
)


(2,828
)Net cash used in investing
    activities


(9,976
)


(2,933
)FINANCING ACTIVITIESProceeds from issuance of stock


1,534



777Sales of treasury stock


463



Proceeds from long term debt and
    line of credit


29,000



1,000Repayments of long term debt and
    line of credit


(8,653
)


(143
)Cash paid for debt issuance costs


(509
)


Net cash provided by financing
    activities


21,835



1,634NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS


1,630



(4,864
)CASH AND CASH
    EQUIVALENTS  Beginning of year


291



5,069CASH AND CASH
    EQUIVALENTS  End of year

$
1,921


$
205SUPPLEMENTAL CASH FLOW
    DISCLOSURES:Interest paid

$
1,574


$
Income taxes paid






    6




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
  NOTE 1 
    BASIS OF PRESENTATION
  Form 10-KSB. Form 10-QSB
  NOTE 2 
    NEW ACCOUNTING PRONOUNCEMENTS
    NOTE 3 
    GOING CONCERN
        NOTE 4 
    RESTATEMENT
     7




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      NOTE 5 
    INVESTMENTS, ADVANCES AND NOTES RECEIVABLE FROM RELATED
    PARTIES
  less-than-majority-owned
 8




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Method ofAccountingfor the









TotalYear Ended December 31,



Investment


Amount of


InvestmentDescription

2006

% Ownership

Amount


Advances


and Advances


Type of Investment($ in 000s)


($ in 000s)


($ in 000s)InvestmentsTruckers Corner Hillsboro, TX

Equity

25%

$
1,120


$
4,161


$
5,281


Retail facility for Bio-diesel
    distributionAmerican Earth Dallas, TX

Equity-to be consolidated in 2007

Proposed To be 51%-Start up Co.


77







77


Acquisitions of retail sites for
    Bio-diesel distributionSystems Management Solutions, Inc.
    (SMS), San Antonio, TX

Cost

Advances-LOI






22



22


Bio-diesel production facilityVertex Processing, LP, Houston, TX

Cost

Advances-LOI-51%






2,497



2,497


Bio-diesel production facilityLetters of IntentBiodiesel Investment Group and
    Bunge North America, Danville, Illinois

Cost

10%


4,901







4,901


Bio-diesel production facilityEarth Ethanol and Liquafaction
    Corporation, Moses Lake, Washington

Equity-to be consolidated in 2007

Proposed to be 80%-Start up Co.






425



425


Ethanol production facilityEarth Ethanol and HPS Development,
    L.L.C., Plaquemines Parish, Louisiana

Cost

Advances-LOI






27,076



27,076


Ethanol production facilityDFI-Albemarle Bio-Refinery, Inc.,
    North Carolina

Cost

Advances-LOI






3,150



3,150


Ethanol production facilityTotal investment and
    advances





$
6,098


$
37,331


$
43,429   Investments 
  American Earth Fuels Company
  Advances
    on Letters of Intent 
   9




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Notes
    receivable from related
    parties
    Description

2007


2006($ in 000s)


($ in 000s)Truckers Corner

$
107


$
104SMS


788



788DFI


2,146



2,120Apollo


7,636



2,812Apollo Affiliates


589



0AIRO


857



857Total


12,123



6,681Less current portion


(857
)


(857
)Long term notes receivable from
    related parties

$
11,266


$
5,824   Advances
    to related parties 
    NOTE 6 
    INTANGIBLE ASSETS
        NOTE 7 
    DEMAND NOTES 
   10




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     NOTE 8 
    LINE OF CREDIT
    NOTE 9 
    LONG TERM DEBT
          March 31, 2007Term debt facilities


24,000Unamortized discounts


(5,235
)18,765Less current installments


0Long-term debt, less current
    installments

$
18,765  11




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Debt Outstandingat March 31, 20071 year or less

$
02 years


03 years


24,0004 years


05 years


0Thereafter


0Total future payments

$
24,000     NOTE 10 
    STOCKHOLDERS EQUITY
  Warrants 
    2006Description

Exercise Price


WarrantsMay 4, 2006 convertible
    debt-(debt repaid), warrants issued to investor

$
2.00



920,810May 26, 2006 convertible
    debt-(debt repaid), warrants issued to investor and placement
    agent

$
3.84



768,750June 7, 2006 convertible
    debt-(debt repaid), warrants issued to investor and placement
    agent

$
2.93



1,545,000July 10, 2006 convertible
    debt (debt repaid), warrants issued to investor and placement
    agent

$
2.50



1,515,000July 21,2006 warrants issued
    for consulting fees

$
.25



4,000,000July 24, 2006 convertible
    debt, warrants issued to investors

$
2.90



9,051,725August 11, 2006 convertible
    debt, warrants issued to investors and placement agent

$
2.90



189,655January 19, 2007, promissory
    notes, warrants issued to note holders

$
.01



750,000February 28, 2007, long term
    debt, warrants issued to note holders

$
.36



13,549,816March 23, 2007, long term
    debt, warrants issued to note holders

$
.30



6,774,908      12




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Number of Shares





Weighted AverageUnder Warrant


Exercise Price


Exercise PriceWarrants outstanding at
    December 31, 2006


17,790,904


$
.25-3.84


$
.73Issued


20,699,724


$
.01-.36


$
.25Exercised


(125,000
)

$
.01


$
.01Expired










Warrants outstanding and
    exercisable at March 31, 2007


38,365,628


$
.01-$3.84


$
.60     Share-based
    Compensation 
      Subscriptions 
    Escrowed
    Shares 
    NOTE 11 
    RELATED PARTY TRANSACTIONS
  Advances
    Description

2007($ in 000s)Apollo International Resources,
    Inc.

$
2,648LNG affiliates


4,075Total

$
6,723    13




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##### Table of Contents



EARTH
    BIOFUELS, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     NOTE 12 
    COMMITMENTS AND CONTINGENCIES
  Escrowed
    Shares
    NOTE 13 
    SEGMENT INFORMATION
      LNG


Earth Biofuels


Consolidated($ in 000s)


($ in 000s)


($ in 000s)Three months ended
    March 31, 2007Revenue

$
5,971



674



6,645Loss from operations

$
(820
)


(8,249
)


(9,069
)Interest Expense

$
(139
)


(7,967
)


(8,106
)Net Loss for the three months
    ended March 31, 2007

$
(946
)


(16,555
)


(17,501
)Property, plant and equipment, net

$
11,430



16,952



28,382Total Assets

$
15,412



112,585



127.997Current Liabilities

$
9,361



35,314



44,675    14




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##### Table of Contents



ITEM 2.
    Managements
    Discussion and Analysis.  Form 10-KSB.
  Overview
        and/or
    Acquisition of Apollo LNG 
 15




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##### Table of Contents



historical cost basis.
  Continuing Losses.
         16




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##### Table of Contents



Results
    of Operations
   Comparison
    of Three Months Ended March 31, 2007
    To Three Months Ended March 31, 2006
    Three Months EndedMarch 31, 20072007


2006Revenues:Sales revenue


99
%


96
%Energy production credits


1
%


4Total revenues


100
%


100
%Cost of sales


95
%


109
%Gross profit


5
%


(9
)%Compensation


77
%


54Other selling, general and
    administrative


51
%


30
%Depreciation and amortization


1
%


4
%Net loss from operations


(125
)%


(97
)%Net (loss)


(262
)%


(123
)%   Revenue.
 17




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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 March 31, 2006
  To Three Months Ended March 31, 2005
    Liquidity
    and Capital Resources
  Overview.
  ramp-up
     18




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##### Table of Contents



Current
    and Future Financing Needs 
           19




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##### Table of Contents



Critical
    Accounting Policies and Estimates
    Revenue Recognition
  Business Combinations
  Accounting for Stock Based Compensation
  Accounting for Derivatives
  00-19, 00-19) 00-19, 00-19,
 20




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##### Table of Contents



Net Loss Per Share Data
  Reclassifications
  Use of Estimates
  Impairment of Long-Lived Assets
  Recent
    Accounting Pronouncements
    NOTE 2 
    NEW ACCOUNTING PRONOUNCEMENTS
    Off-Balance
    Sheet Arrangements
    Contractual
    obligations
  Current
    Debt Obligations 
   21




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##### Table of Contents



Leases 
     22




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##### Table of Contents



Risk
    Factors
      quarter-to-quarter
  
    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.         23




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##### 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
  Form 10-KSB
    
    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 24




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##### 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.    Form 10-QSB Form 10-KSB Form 8-K
 Item 3.Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)
  Form 10-QSB
  Extension
    of Compliance Date for Managements Report on Internal
    Control Over Financial Reporting
  Rule 12b-2 Rule 13a-15(d) 15d-15(d), Rules 13a-14(a) 15d-14(a) Rules 13a-15(a) 15d-15(a)
  Rule 13a-15(f)
   25




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##### Table of Contents



Form 10-KSB
   PART II
    OTHER INFORMATION Item 1.Legal
    Proceedings    HPS
 26




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##### Table of Contents



th v.
      Item 2.
    Equity
    Securities and Use of Proceeds  Market
    for Registrants Common Equity
   27




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##### Table of Contents



mark-up,
  Quarter Ended

High


LowMarch 31, 2006

$
.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
  Debt
    securities and Warrants 
   28




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##### Table of Contents



Form 10-K
  EITF 96-19,
    Accounting for Derivative Instruments and Certain
    Hedging Activities 00-19 00-19,
 29




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##### Table of Contents



Accounting for Derivative Instruments and Certain
    Hedging Activities
  Registration
    Rights 
  12-month
     30




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##### Table of Contents



Change
    in Securities and Use of Proceeds 
  March 31, 2007


March 31, 2007Description

Amount


Shares(In 000s)


(In 000s)Shares issued for services


3,823



5,999Shares issued related to repayment
    of amounts due to parent


510



1,000Shares issued to escrow account


0



2,500Shares issued for exercise of
    warrant


0



125Shares issued for cash


1,525



3,068Sale of common stock held in
    treasury


463



279Total shares issued during the
    three months ended March 31, 2007

$
6,321



12,971   UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 
             31




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##### Table of Contents




    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. 32




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##### Table of Contents




    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 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 33




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##### Table of Contents



$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 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.  Item 3.
    Defaults
    upon Senior Securities    Item 4.
    Submission
    of Matters to a Vote of Security Holders        Item 5.
    Other
    Information   34




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##### Table of Contents



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.10
.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). 35




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##### Table of Contents



ExhibitNumber

Description10
.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).10
.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). 36




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##### Table of Contents



ExhibitNumber

Description10
.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.10
.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). 37




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##### Table of Contents



ExhibitNumber

Description10
.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.10
.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. 38




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ExhibitNumber

Description10
.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, etal 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.*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.  +
    
    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. 39




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##### Table of Contents



SIGNATURE      /s/  Dennis
    G. McLaughlin, III  
    
  
   40