UNITED
STATES


SECURITES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549









þ  ANNUAL
REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934


For
Fiscal Year Ended December 31, 2007




Commission
File #000-31935




EARTHBLOCK
TECHNOLOGIES, INC.


(Exact
name of registrant as specified in its charter)




NEVADA


(State or
other jurisdiction of incorporation or organization)




65-0729440


(IRS
Employer Identification Number)




2637
Erie Avenue, Suite 207, Cincinnati, OH 45208


(Address
of principal executive offices, including zip code)




(513) 533-1220


(Registrant’s
telephone no., including area code)




SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None




SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: Common Stock, $0.001 Par Value.
Preferred Stock, $0.001 Par Value.




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes  þNo o




Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. o




Revenues
for year ended December 31, 2007: $402,900.  Aggregate market value of
the voting common stock held by non-affiliates of the registrant as
of  May 20, 2008 was: $97,451.  Number of shares of the
registrant’s common stock outstanding as of  May 20, 2008 was
101,965,018. Number of shares of registrant’s preferred stock outstanding as
of  May 20, 2008 was two (2).


-1-




FORWARD-LOOKING
STATEMENTS




Statements
we make in this Annual Report on Form 10-KSB that are not historical facts are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions (“Factors”) that are difficult to predict. Factors that could cause
our actual results to differ materially from those in the forward-looking
statements include, but are not limited to:




●
            the
      cyclical nature of our business




●
            national
      and regional economic conditions in the U.S. and other countries in which
      we operate




●
            currency
      fluctuations




●
            seasonality
      of our operations




●
            levels
      of construction spending in major
markets




●
            supply/demand
      structure of our industry




●
            competition
      from new or existing competitors




●
            unfavorable
      weather conditions during peak construction
  periods




●
            changes
      in and implementation of environmental and other governmental
      regulations




●
            our
      ability to successfully identify, complete and efficiently integrate
      acquisitions




●
            our
      ability to successfully penetrate new markets availability of raw
      materials and/or supplies




In
general, we are subject to the risks and uncertainties of the construction
industry and of doing business in the U.S. and foreign countries, particularly
developing nations. The forward-looking statements are made as of the date of
this report, and we undertake no obligation to update them, whether as a result
of new information, future events or otherwise.


-2-





PART
I




ITEM 1. DESCRIPTION OF
BUSINESS




EarthBlock
Technologies, Inc. a Nevada Corporation was formerly Terra Block International,
Inc., having been renamed effective February 11, 2005, (the “Company” or
“EarthBlock”) was formerly L.L. Brown International, Inc. (“L.L. Brown”). L.L.
Brown was originally incorporated as Smart Industries, Inc. on February 19,
1997. On February 14, 2003, L.L. Brown entered into a Share Exchange Agreement
with Terra Block Consolidated. The Agreement provides for 100% of the shares of
Terra Block Consolidated to be acquired by L.L. Brown in exchange for shares of
common stock of L.L. Brown; for the establishment of a new Board of Directors
consisting of Terra Block Consolidated directors; and, with total issued and
outstanding common shares of the Company immediately after the closing of
10,000,000. The Company’s former subsidiary, LLBA has been spun off, leaving
Terra Block Consolidated as the sole operating subsidiary of the Company after
effecting the Agreement.




INTRODUCTION




EarthBlock
Technologies, Inc. uses compressed earth blocks in its building system to
construct a variety of structures both commercial and residential, including
warehouses, office buildings, outbuildings, retail stores, various types of
walls and residences from expensive custom homes to low income
housing.




The
construction method is simple; utilizing properly mixed soil compressed into
dense, non-fired, uniform building blocks at the building site. The blocks don’t
require curing and are stacked on a proper foundation using thin slurry between
each layer. A comprehensive bonding takes place between the blocks and results
in a block-to-block bond, not a block-to-mortar bond as in concrete hollow block
construction. This comprehensive bonding results in a monolithic structure and a
block-to-block strength with very high shearing strength. Completed walls
require a concrete bond beam on top before the roofing system of choice is
installed. Completed walls typically receive a stucco finish. The system is
fast, a single machine can produce over 3,800 blocks per day and wall
construction can be completed with unskilled labor.




The
blocks are strong having compressive strength between 1,000 - 1,600 psi without
any additives. Building codes in the United States require a non-fired block to
have a compressive strength of 300 psi.




The
Company’s goal is to become the leading provider of durable, structurally sound,
low cost, and environmentally friendly, residential and commercial buildings in
the world.





COMPRESSED
EARTH BLOCK CONSTRUCTION




The
Company’s building system makes possible the large-scale construction of low
cost, affordable, energy-efficient homes as well as a variety of commercial
structures. EarthBlock’s suppliers have perfected machines that convert our most
abundant raw material (common soil) into one of our most needed building
components. These portable machines convert ordinary soil on a building site,
into rock-hard, durable blocks, used in construction. The machine can be towed
to a site by a normal pick-up truck or SUV. It takes the dirt, which is already
there in abundance and converts it into strong, stable building blocks. There is
no material cost and no freight expense. The system utilizes low skilled labor
to construct the walls and it’s fast as the blocks do not require
curing.


-3-





The
Company uses these blocks to build structures that have the following
characteristics:




●
            The
      raw material - dirt - is readily available at the job
  site.




●
            No
      expensive additives required




●
            Skilled
      labor is not required for construction. Blocks are simply plumbed and
      stacked which reduces labor cost
significantly.




●
            Excellent
      thermal performance, reducing heating and cooling
  costs.




●
            Low
      maintenance.




●
            Long
      lasting and durable.




●
            Non-toxic-
      materials are completely natural and don't out-gas toxic
      chemicals.




●
            Sound
      resistant




●
            Fire
      resistant - earthen walls don't
burn.




●
            Insect
      resistant - the walls are solid and very dense, discouraging
      insects.




●
            Very
      strong - highly resistant to extreme wind conditions as found in
      hurricanes and tornadoes.




●
            The
      monolithic walls and bond beam create a structure very resistant to
      earthquakes.




CERTAIN
RISK FACTORS




GOING CONCERN
RISK




We have
had and could have losses, deficits and deficiencies in liquidity, which could
impair our ability to continue as a going concern.


-4-




In Note #
7 to our consolidated financial statements, our independent auditors have
indicated that certain factors raise substantial doubt about our ability to
continue as a going concern.




The
ability of the Company to continue as a going concern is dependent upon
generating sufficient cash flow to conduct operations and obtaining additional
capital and financing. Any financing activity is likely to result in significant
dilution to current shareholders.




The
Company’s strategic plan for dealing with its insufficient cash flow is
currently being developed, and may include additional private placements of the
Company’s common stock, the abandonment of unprofitable projects and the
exchange of common stock for settlement of vendor accounts. There can be no
assurance that any of the plans developed by the Company will produce cash flows
sufficient to overcome current liquidity problems.





The
Company’s long-term viability as a going concern is dependent on certain key
factors, as follows:


●
              The
      Company’s ability to obtain adequate sources of outside
      financing.
 ●
                The
      Company’s ability to ultimately achieve adequate profitability and cash
      flows necessary to sustain continuing
  operations.




IMPLEMENTATION
OF BUSINESS STRATEGY DEPENDENT ON ADDITIONAL FINANCING




Our plan
of operation calls for additional capital to facilitate growth and support
long-term development and marketing programs. It is likely that we will seek
additional financing through subsequent future public or private sales of our
securities, including equity securities, borrowing, or other sources of third
party financing. Further, the sale of equity securities could substantially
dilute our existing stockholders’ interests, and borrowings from third parties
could result in our assets being pledged as collateral. Loan terms, which would
increase our debt service requirements, could restrict our operations. There is
no assurance that we can obtain financing on favorable terms. Any such
additional financing may result in significant dilution to existing
stockholders. We may seek merger or acquisition candidates which could
significantly dilute current ownership or cause a change in control. We may also
seek funding for the development and marketing of our services through strategic
partnerships and other arrangements with investment partners. There can be no
assurance, however, that such collaborative arrangements or additional funds
will be available when needed, or on terms acceptable to us, if at all. If
adequate funds are not available, we may be required to curtail one or more of
our future programs.




GOVERNMENTAL
REGULATION




We are
subject to general business regulations, including Federal and state
construction, environmental and hazardous material handling regulations. In
other countries in which we operate, we may be subject to additional regulations
as well.





NEW
PROJECTS.




The
Company may undertake one or more new projects worldwide without limitation.
Management may fail to accurately gauge conditions prior to undertaking a new
project, and therefore may not achieve anticipated results from a new project.
If this were to occur, the Company may experience lower cash flow from
operations. To the extent that the Company incurs debt to finance a portion of
the capital costs of a new project, the cash flow from the new project may be
inadequate to cover the debt service.


-5-




WEATHER
CONDITIONS




Due to
the fact that a substantial portion of our revenues may be derived from
construction operations, our business operations, revenues and operating income
could be negatively affected by weather phenomenon such as but not limited to,
hurricanes, monsoon rain seasons, droughts, excessive heat, wind-storms etc.
Such weather phenomena could interfere with operations and disrupt delivery
schedules and revenue streams. In addition, occurrences like those described
above could negatively impact our customer’s ability to pay us, or interfere
with financing operations within a specific region.





INTERNATIONAL




Foreign
sales are expected to account for a portion of sales and revenue. Sales of
products and services obtained outside the United States are typically
negotiated, invoiced and paid in local currency. Changes in exchange rates may
also adversely affect the ability of customers to purchase the Company’s
products. Economic instability may have an adverse effect on the Company’s
foreign sales. In addition, the Company’s international business strategy may
require it to make significant investments outside of the United
States.




EMPLOYEES




As
of  May 20, 2008, EarthBlock has 2 full-time employees and 0 part-time
employees, including executive officers, non- executive officers, secretarial
and clerical personnel and field personnel. EarthBlock also retains independent
consultants and administrative assistance on a limited basis and expects to
continue to do so in the future.




ITEM 2. DESCRIPTION OF
PROPERTY




The
Company maintains its executive offices at 2637 Erie Avenue, Suite 207,
Cincinnati, Ohio 45208. Approximately, 850 square feet of space is devoted
entirely to EarthBlock as office space. This space is leased by Vector Capital
Group, Inc. (“Vector”) owned equally by Gregory A. Pitner, the Company’s
President, Chief Executive Officer and Chairman and by James E. Hines, the
Company’s Chief Financial Officer and Director. The Company is under no lease
obligation to Vector. Its telephone number is (513) 533-1220 and its facsimile
number is (513) 533-1990. The Company was formerly located at L.L. Brown
International, Inc., 19435 68th Avenue South, Suite S-105, Kent, Washington
98032 until February of 2003 when L.L. Brown International, Inc. consummated a
reverse merger with Terra Block.







ITEM 3. LEGAL
PROCEEDINGS




On
February 5, 2008, a default judgment was entered against EarthBlock for
breaching a construction contract for a total of $527,664.75 and shall bear
interest at the rate of 7.25% per annum until judgment is paid.




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




None


-6-




ITEM 5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS




As of
December 31, 2007, EarthBlock had 101,965,018 shares of common stock outstanding
and had approximately 170 stockholders of record.




The bid
price of our common stock was $0.0014 per share on  May 20,
2008.





OUR
TRANSFER AGENT AS OF MAY 20, 2008 IS:




Interwest
Transfer Company, Inc.


1981 East
4800 South


Suite
100


Salt Lake
City, UT 84117




DIVIDENDS




We intend
to retain future earnings to support our growth. The Company has never paid a
cash dividend on the Common Stock and does not expect to pay a cash dividend in
the foreseeable future.




-7-





PART
II




ITEM 6. MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS




The
following is a discussion of our financial condition, results of operations,
liquidity and capital resources. This discussion should be read in conjunction
with our Consolidated Financial Statements and the notes thereto included
elsewhere in this Form 10-KSB.




FORWARD-LOOKING
INFORMATION-GENERAL




This
report contains a number of forward-looking statements, which reflect the
Company’s current views with respect to future events and financial performance
including statements regarding the Company’s projections. These forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or those
anticipated. In this report, the words “anticipates”, “believes”, “expects”,
“intends”, “future”, “plans”, “targets” and similar expressions identify
forward-looking statements. Readers are cautioned to not place undue reliance on
the forward-looking statements contained herein, which speak only as of the date
hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements, to reflect events or circumstances that may arise
after the date hereof. Additionally, these statements are based on certain
assumptions that may prove to be erroneous and are subject to certain risks
including, but not limited to, the Company’s dependence on limited cash
resources, and its dependence on certain key personnel within the Company.
Accordingly, actual results may differ, possibly materially, from the
predictions contained herein.




GENERAL




EarthBlock
Technologies, Inc. a Nevada Corporation was formerly Terra Block International,
Inc., having been renamed effective February 11, 2005, (the “Company” or
“EarthBlock”) was formerly L.L. Brown International, Inc. (“L.L. Brown”). L.L.
Brown was originally incorporated as Smart Industries, Inc. on February 19,
1997. On February 14, 2003, L.L. Brown entered into a Share Exchange Agreement
with Terra Block Consolidated. The Agreement provides for 100% of the shares of
Terra Block Consolidated to be acquired by L.L. Brown in exchange for shares of
common stock of L.L. Brown; for the establishment of a new Board of Directors
consisting of Terra Block Consolidated directors; and, with total issued and
outstanding common shares of the Company immediately after the closing of
10,000,000. The Company’s former subsidiary, LLBA has been spun off, leaving
Terra Block Consolidated as the sole operating subsidiary of the Company after
effecting the Agreement. The Company currently trades on the OTC Bulletin Board
under the symbol EBLC.




EarthBlock
Technologies, Inc. engages in the application of technologically advanced
building products and technologies for earthen construction. EarthBlock uses
machinery from a variety of manufactures to manufacture Compressed Earth Blocks
for construction. The Company’s machines manufacture building blocks of various
sizes using common soil as the only raw material. This is accomplished by
compacting the soil at up to 460,000 lbs. of hydraulic pressure to form a rock
hard block.


-8-





GOING
CONCERN STATEMENT




The
Company’s strategic plan for dealing with its cash flow problems is currently
being developed, and may include additional private placements of the Company’s
common stock, the abandonment of unprofitable projects and the exchange of
common stock for settlement of vendor accounts. There can be no assurance that
any of the plans developed by the Company will produce cash flows sufficient to
overcome current liquidity problems.




The
Company’s long-term viability as a going concern is dependent on certain key
factors, as follows:


●
                The
      Company's ability to obtain adequate sources of outside
      financing.  There are currently no commitments or other known
      sources for this financing.
 ●
                    The
      Company’s ability to ultimately achieve adequate profitability and cash
      flows to sustain continuing
operations.


RESULTS
OF OPERATIONS




During
fiscal 2007, the Company had total revenues of $402,900.




The
Company continues to search for a joint venture partner to begin its first
housing foreign development.




LIQUIDITY
AND CAPITAL RESOURCES




While the
Company currently has several projects in development and a business plan for
growing the business, it requires additional capital in order to fully implement
its business plan. The Company has been developing a plan to deal with its
liquidity problems. These steps may include additional private placements of the
Company’s common stock, a business combination with a more profitable entity
and/or efforts to raise additional debt financing. There can be no assurance
that any of the plans developed by the Company will produce cash flows
sufficient to ensure its long-term viability as a going concern.





The
Company’s long-term viability as a going concern is dependent on certain key
factors, as follows:


●
                  The
      Company’s ability to obtain adequate sources of outside financing to
      support near term operations and to allow the Company to continue forward
      with current strategic plans.
 ●
                      The
      Company’s ability to implement its operating business
  plan.
 ●
                            The
      Company’s ability to ultimately achieve adequate profitability and cash
      flows to sustain continuing
operations.
 -9-





2008
OUTLOOK




During
2008 The Company is planning on expanding development in its housing
construction business segments:




●
              Housing
      Development and Construction: The Company is working toward developments
      both domestically and abroad to capitalize on its unique construction and
      building system.


ITEM 7. FINANCIAL
STATEMENTS




The
financial statements of the company are set forth beginning on page
F-1.




ITEM 8. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE




None




Item 8A.
Controls and Procedures.




In
accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as of the end of the period covered by this Annual
Report on Form 10-KSB , the Company’s management evaluated, with the
participation of the Company’s principal executive officer and principal
financial officer, the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or
Rule 15d-15(e) under the Exchange Act). Based on their evaluation of these
disclosure controls and procedures, the Company’s chief executive officer and
the Company’s chief financial officer have concluded that the disclosure
controls and procedures were effective as of the date of such evaluation to
ensure that material information relating to the Company, including its
consolidated subsidiaries, particularly during the period in which this Annual
Report on Form 10-KSB was being prepared.




Item 8B.
Other Information.




None.





-10-


PART
III




ITEM 9.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(A) OF THE EXCHANGE ACT




The
directors and officers of the Company, as of April 12, 2006, are set forth
below. The directors hold office for their respective term and until their
successors are duly elected and qualified. The officers serve at the will of the
Board of Directors.




DIRECTORS
AND EXECUTIVE OFFICERS




Set forth
below are the names, ages, and positions of the executive officers and directors
of the Company




Name
            Age
            Position(s)
      with CompanyGregory
      A. Pitner
            44
            Chairman,
      President and CEOJames
      E. Hines
            51
            CFO,
      Vice-President and DirectorGary
      S. Barker
            51
            Director





GREGORY
A. PITNER, PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN




Before
accepting his position with EarthBlock, Mr. Pitner was formerly President/CEO of
Vector Capital Group, Inc. a Cincinnati, OH based investment banking and
consulting firm. Vector Capital Group, Inc. has experience and expertise in a
broad spectrum of investment banking and consulting services, including:
corporate finance, start-up consulting, executive management, capital structure,
mergers and acquisitions, bankruptcy and workout management, cash flow
management and turn-around investing.





Mr.
Pitner oversaw all aspects of Vector, and had direct responsibility for, and
utilized his background and expertise in, coordinating the acquisition and
management of turn-around opportunities. From 1995 to 1999 as a Vice President
of Navicap Corporation, a Cincinnati, OH based merchant banking firm, Mr. Pitner
successfully provided financing for a number of firms both private and publicly
held. His responsibilities included deal structure, acquisition negotiation,
dealer and market maker networking, financing, management control, as well as
due-diligence. Clients ranged from basic industry rollups to technology
companies.




Mr.
Pitner has enjoyed success acting in the capacity as senior management for
client firms as well as direct investments. He has occupied a seat on several
boards and has also acted as interim manager for companies of various sizes. In
the past Mr. Pitner has demonstrated expertise in structuring venture level
investments, as well as providing management consulting and guidance to early
stage companies. Also, he has enjoyed success working with technology related
firms, such as Internet start-ups, IT consulting companies, as well as data
collection and management companies ranging in size from start-ups to over $600
million in revenues both domestically as well as internationally. He spearheaded
the acquisition of a gold mining facility in Zaire, now known as The Democratic
Republic of Congo and has significant international experience.




Mr.
Pitner graduated from DePauw University, Greencastle, Indiana with a Bachelor of
Science Degree majoring in Economics as a Rector Scholar.




JAMES E.
HINES, VICE-PRESIDENT, CHIEF FINANCIAL OFFICER AND DIRECTOR




Before
accepting his position with the Company, Mr. Hines was formerly CFO and
co-founder of Vector Capital Group, Inc., a boutique investment bank that
originated during 1999 and specializes in turnaround, debt and equity capital
advisory services. A finance and strategic planning specialist he also has
extensive experience in bankruptcy proceedings and asset
liquidations.


-11-




Mr. Hines
has extensive knowledge in general and financial management, particularly in
business and strategic planning, mergers and acquisitions, as well as cash flow
management. He has developed short and intermediate term revitalization
strategies specializing in crisis management, general bankruptcy and
pre-bankruptcy consulting for clients in the real estate, retail, manufacturing,
entertainment and restaurant industries. To assist in these crisis management
and bankruptcy engagements, he created a number of analytical tools including
cash flow projection models, short and long term strategic plans, and detailed
tactics used for the revitalization of troubled companies.




Mr. Hines
was formerly Vice President for Navicap Corporation, a Cincinnati, Ohio based
merchant bank from 1998-1999 where he was responsible for developing a secured
lending group. This group secured capital for client companies exceeding $20
million. Mr. Hines was a major participant in overseeing the successful
disposition of assets to Navicap shareholders.




Mr. Hines
was from 1992-1998 a principal in Spectrum Capital, a consulting company that
specialized in debt and equity capital placements up to $23 million for
corporate clients. Spectrum also successfully completed several corporate
restructurings of leveraged buyout transactions.





Mr. Hines
was from 1990-1992 President for Tius Elcon, Ltd. a startup Israeli medical
device manufacturer where he was primarily responsible for raising approximately
$11 million in venture capital and for sales increasing to $2.5 million within
six months of inception. He successfully negotiated for the products to be
manufactured in Hong Kong to be shipped and sold in the United States. Tius
Elcon was profitable and cash flow positive every month during his tenure. Tius
Elcon was subsequently sold to an Israeli conglomerate. Mr. Hines was from
1981-1990 a Vice President for Citicorp Leveraged Capital Group where he
originated financing for a wide variety of leveraged buyouts. These buyouts
ranged in size from $5 million to $2.5 billion. Companies included food
processing, basic manufacturing, consumer products, retail and energy related
concerns. Mr. Hines has vast experience acting as the lead bank agent
coordinating up to 90 separate lenders in a single transaction along with
leading several of these buyout companies back to becoming publicly
traded.




Mr. Hines
received a Bachelor of Science Degree, specializing in Finance from Huntington
College, Huntington, Indiana.




GARY S.
BARKER, DIRECTOR




Gary S.
Barker joined EarthBlock as a Director in October, 2004.




Mr.
Barker has been involved in the oil and gas industry for the past 25 years.
Early in his career, he worked as a landman for several oil and gas companies
before becoming an independent oil and gas operator in 1990. While forming his
own company, Mr. Barker gained experience in obtaining and securing financing
for the acquisitions of oil and gas properties. His responsibilities included
management control, acquisition negotiations, and deal structure.




Mr.
Barker is currently a partner in Barker Brown Investments, LLC in Midland,
Texas. Barker Brown Investments, LLC owns and operates over 250 oil and gas
wells in Texas.




Mr.
Barker is a member of the Texas Alliance of Energy Producers, New Mexico
Landmen’s Association, Permian Basin Landmen’s Association, and American
Association of Professional Landmen.




Mr.
Barker graduated from the University of New Mexico with a Bachelor of University
Studies Degree in Geography.




CERTAIN
LEGAL PROCEEDINGS




No
existing director, or executive officer of the Company has appeared as a party
in any legal proceeding material to an evaluation of his ability or integrity
during the past five years.


-12-





COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT




Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
requires the Company’s officers, directors and persons who own more than 10% of
the Company’s Common Stock to file reports of ownership and changes in ownership
with the SEC and the National Association of Securities Dealers, Inc. Officers,
directors and greater than 10% stockholders are required by regulation to
furnish the Company with copies of all forms they file pursuant to Section 16(a)
of the Exchange Act.





ITEM 10. EXECUTIVE
COMPENSATION




Name
      and
              Post
            Year
            
            Annual
              Comp
              Salary
              (1)
            
            
            Annual
              Comp
              Bonus
              ($)
            
            
            Annual
              Comp
              Other
            
            
            LT
      Comp
              Rest
              Stock
            
            
            LT
              Comp
              Options
            
            
            LTIP
              Payouts
            
            
            All
              Other
              (1)Gregory
      A
            2005
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-Pitner
            2006
            
            $
            60,000
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-President
            2007
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-James
      E
            2005
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-Hines
            2006
            
            $
            60,000
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-Vice
      President
            2007
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-
            
            
            
            -0-




(1)    
All other compensation includes certain health and life insurance benefits paid
by the Company on behalf of its employees.





EMPLOYMENT
AGREEMENTS




During
2003, the Company entered into employment agreements with Messrs. Pitner and
Hines which provide for three year terms, an agreed upon annual salary,
benefits, and provisions concerning termination of employment upon sale or
change of control of the Company.




ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT




The
following table sets forth information as of  May 12, 2008, regarding
the ownership of the Company’s Common Stock by each shareholder known by the
Company to be the beneficial owner of more than five percent (5%) of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the share of Common Stock
beneficially owned.


-13-





Name
      and Address ofBeneficial
      Owner
            Title
      ofClass
            
            Amount
      and Nature of
              Beneficial
      Owner
            
            
            Percent
      ofClassGregory
      A. Pitner (1)
            Common
            
            
            2,955,702
            
            
            
            2.9
            %James
      E. Hines (1)
            Common
            
            
            2,955,702
            
            
            
            2.9
            %All
      Executive Officers and Directors
      as a Group(Two (2) persons)
            Common
            
            
            5,911,404
            
            
            
            5.8
            %C
      & M Capital, Ltd.
            Common
            
            
            6,000,000
            
            
            
            5.9
            %Prendiville
      Revocable Trust
            Common
            
            
            13,446,000
            
            
            
            13.2
            %Capital
      Consortium Anstalt
            Common
            
            
            7,000,000
            
            
            
            6.9
            %




(1)
            The
      address for each of the above is c/o EarthBlock Technologies, Inc. 2637
      Erie Avenue, Suite 207 Cincinnati, OH
45208.




ITEM 12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.




At
December 31, 2007 the Company had a note payable to Dorothy L. Pitner, a
shareholder of EarthBlock Technologies, Inc. and mother of Gregory A. Pitner in
the amount of $5,000.




At
December 31, 2007 the Company had a note payable to Barker, Brown Investments,
LLC. in the amount of $20,000. Gary S. Barker, a Director of EarthBlock
Technologies, Inc. is an affiliate of Barker, Brown Investments.




ITEM 13. EXHIBITS AND
REPORTS ON FORM 8-K




(a)
            The
      following documents are filed as part of this
  report:




31.1   Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.




31.2   Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.




32.1   Certification
of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




32.2   Certification
of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002..




(b)
            Reports
      on Form 8-K: None





-14-


SIGNATURES




Pursuant
to the requirements of section 13 or 15(d) of the Securities Exchange Act of
1934, the undersigned has duly caused this Form 10-KSB to be signed on its
behalf by the undersigned, there unto duly authorized, in the City of
Cincinnati, Ohio, on  May 22, 2008.




EARTHBLOCK
      TECHNOLOGIES, INC.
              
              
              BY:
      /S/ Gregory A. Pitner
              ——————————————
              Gregory
      A. Pitner
              President,
              CEO
      and Chairman
              
              
              BY:
      /S/ James E. Hines
              ——————————————
              James
      E. Hines
              Vice-President,
              CFO
      and Director








Pursuant
to the requirements of the Securities Exchange Act of 1933, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the date indicated.




May 22,
      2008
              
              
              
              
              
              
              May
      22, 2008
            
            EARTHBLOCK
      TECHNOLOGIES, INC.
              
              
              BY:
      /S/ Gregory A. Pitner
              ——————————————
              Gregory
      A. Pitner
              President,
              CEO
      and Chairman
              
              
              BY:
      /S/ James E. Hines
              ——————————————
              James
      E. Hines
              Vice-President,
              CFO
      and Director







-15-





EARTHBLOCK
TECHNOLOGIES, INC.


CONSOLIDATED
FINANCIAL STATEMENTS


DECEMBER
31, 2007


TABLE OF
CONTENTS




PAGE
      NOAuditors'
      Report
            F-1Financial
      statementsConsolidated
      Balance Sheets
            F-2Consolidated
      Statement of Operations
            F-3Consolidated
      Statement of Stockholders' Equity
            F-4Consolidated
      Statement of Cash Flows
            F-5Notes
      to Financial Statements
            F-6








-i-


Pollard-Kelley
Auditing Services, Inc


Auditing
Services


4500
Rockside Road, Suite 450,


Independence,
OH 44131


330-864-2265


Report
of Independent Registered Public Accounting Firm









EarthBlock
Technologies, Inc. and Subsidiary




Cincinnati,
Ohio




We have
audited the accompanying balance sheets of EarthBlock Technologies and
Subsidiary, as of December 31, 2007 and 2006, and the related statements of
income, changes in stockholders’ equity, and cash flows for each of the two
years in the period ended December 31, 2007.  These financial
statements are the responsibility of the Company’s management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.




We
conduct our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.




As
discussed in Note 7 the Company has not generated significant revenues or
profits to date.  This factor among others raises substantial doubt
the Company will be able to continue as a going concern.  The
Company’s continuation as a going concern depends upon its ability to generate
sufficient cash flow to conduct its operations and its ability to obtain
additional sources of capital and financing.  The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.  Management’s plans
concerning this matter are also discussed in Note 7.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company at December 31, 2007
and 2006, and the results of its operations and it cash flows for each of the
two years in the period ended December 31, 2007, in conformity with U.S.
generally accepted accounting standards.




Pollard-Kelley
Auditing Services, Inc.







/S/
Pollard-Kelley Auditing Services, Inc.


Independence,
Ohio


May 20,
2008


F-1




EarthBlock
      Technologies, Inc and SubsidiaryCONSOLIDATED
      BALANCE SHEETDecember
      31, 2007 and 20062007
            
            
            2006ASSETSCurrent
      AssetsCash
      and cash equivalents
            
            $
            -
            
            
            $
            333Inventory
            
            
            36,272
            
            
            
            180,000Total
      Current Assets
            
            
            36,272
            
            
            
            180,333Fixed
      AssetsComputers
            
            
            9,402
            
            
            
            9,402Less:
      Accumulated depreciation
            
            
            (6,187
            )
            
            
            (4,428
            )3,215
            
            
            
            4,974Total
      Assets
            
            $
            39,487
            
            
            $
            185,307LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesBank
      overdrafts
            
            $
            7,799
            
            
            $
            -Notes
      payable
            
            
            450,600
            
            
            
            537,500Accounts
      payable
            
            
            148,970
            
            
            
            130,653Judgement
      liability
            
            
            527,665
            
            
            
            -Accrued
      salaries
            
            
            585,955
            
            
            
            609,655Accrued
      payroll taxes
            
            
            12,644
            
            
            
            12,644Accrued
      interest
            
            
            182,992
            
            
            
            134,374Total
      Current Liabilities
            
            
            1,916,625
            
            
            
            1,424,826Stockholders'
      EquityPreferred
      stock
            
            
            -
            
            
            
            -Common
      stock
            
            
            101,465
            
            
            
            92,465Additional
      contributed capital
            
            
            1,754,358
            
            
            
            1,698,358Deficit
      accumulated during thedevelopment
      stage
            
            
            (3,732,961
            )
            
            
            (3,030,342
            )Subscriptions
      receivable
            
            
            -
            
            
            
            -(1,877,138
            )
            
            
            (1,239,519
            )Total
      Liabilities and Stockholders' Equity
            
            $
            39,487
            
            
            $
            185,307See
      accompanying notes to financial statements.





F-2





EarthBlock
      Technologies, Inc and SubsidiaryCONSOLIDATED
      STATEMENT OF OPERATIONSFor
      the Years Ending December 31, 2007 and 2006Year
      to
            
            
            Year
      toDate
            
            
            Date2007
            
            
            2006Revenues
            
            $
            402,900
            
            
            $
            -Cost
      of SalesDirect
      cost of sales
            
            
            412,524
            
            
            
            156,931Gross
      Profit
            
            
            (9,624
            )
            
            
            (156,931
            )ExpensesOffice
            
            
            13,054
            
            
            
            21,179Depreciation
            
            
            1,759
            
            
            
            1,759Interest
            
            
            71,177
            
            
            
            45,699Licensor
      expenses
            
            
            -
            
            
            
            -Professional
      fees
            
            
            61,965
            
            
            
            766,875Rent
            
            
            6,307
            
            
            
            13,776Salaries
            
            
            -
            
            
            
            420,008Travel
            
            
            11,068
            
            
            
            21,695165,330
            
            
            
            1,290,991Loss
      From Operations
            
            
            (174,954
            )Other
      Income and ExpenseJudgement
            
            
            527,665
            
            
            
            -Net
      Loss
            
            $
            (702,619
            )
            
            $
            (1,447,922
            )Loss
      per share
            
            $
            (0.01
            )
            
            $
            (0.02
            )Average
      shares outstanding
            
            
            99,176,268
            
            
            
            70,313,237See
      accompanying notes to financial statements.








F-3





EarthBlock
      Technologies, Inc and SubsidiaryCONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITYFor
      the Years Ending December 31, 2007 and 2006AdditionalPreferred
      Stock
            
            
            Common
      Stock
            
            
            Contributed
            
            
            RetainedShares
            
            
            Amount
            
            
            Shares
            
            
            Amount
            
            
            Capital
            
            
            Deficit
            
            
            TotalBalance
      December 31, 2005
            
            
            -
            
            
            $
            -
            
            
            
            49,815,018
            
            
            $
            49,815
            
            
            $
            380,008
            
            
            $
            (1,582,420
            )
            
            $
            (1,152,597
            )Share
      sales
            
            
            -
            
            
            
            -
            
            
            
            7,000,000
            
            
            
            7,000
            
            
            
            28,000
            
            
            
            -
            
            
            
            35,000Shares
      for services
            
            
            2
            
            
            
            -
            
            
            
            24,250,000
            
            
            
            24,250
            
            
            
            839,750
            
            
            
            -
            
            
            
            864,000Shares
      issued inconnectionwith
      certain Notes payable
            
            
            -
            
            
            
            -
            
            
            
            11,400,000
            
            
            
            11,400
            
            
            
            330,600
            
            
            
            -
            
            
            
            342,000Sale
      and experation ofwarrants
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            120,000
            
            
            
            -
            
            
            
            120,000Net
      Loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (1,447,922
            )
            
            
            (1,447,922
            )Balance
      December 31, 2006
            
            
            2
            
            
            
            -
            
            
            
            92,465,018
            
            
            
            92,465
            
            
            
            1,698,358
            
            
            
            (3,030,342
            )
            
            
            (1,239,519
            )Shares
      for services
            
            
            -
            
            
            
            -
            
            
            
            9,500,000
            
            
            
            9,000
            
            
            
            56,000
            
            
            
            -
            
            
            
            65,000Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (702,619
            )
            
            
            (702,619
            )Balance
      December 31, 2007
            
            
            2
            
            
            $
            -
            
            
            
            101,965,018
            
            
            $
            101,465
            
            
            $
            1,754,358
            
            
            $
            (3,732,961
            )
            
            $
            (1,877,138
            )See
      accompanying notes to financial statements.





F-4





EarthBlock
      Technologies, Inc and SubsidiaryCONSOLIDATED
      STATEMENT OF CASH FLOWSFor
      the Years Ending December 31, 2007 and 2006Year
      to
            
            
            Year
      toDate
            
            
            Date2007
            
            
            2006Cash
      Flows from Operating ActivitiesNet
      Loss
            
            $
            (702,619
            )
            
            $
            (1,447,922
            )Adjustments
      to reconcile net loss to netcash
      provided by operating activitiesDepreciation
      and amortization
            
            
            1,759
            
            
            
            1,759Stock
      for services
            
            
            65,000
            
            
            
            1,206,000(Increase)
      in Inventory
            
            
            143,728
            
            
            
            (180,000
            )Increase
      in Accounts payable
            
            
            18,317
            
            
            
            27,745Increase
      in Judgement liability
            
            
            527,665Increase
      in Accrued salaries
            
            
            (23,700
            )
            
            
            (93,785
            )Increase
      in Payroll taxes
            
            
            -
            
            
            
            12,644Increase
      in Accrued interest
            
            
            48,618
            
            
            
            45,699Net
      Cash (Used) by Operating Activities
            
            
            78,768
            
            
            
            (427,860
            )Cash
      Flows from Investing Activities
            
            
            -
            
            
            
            -Cash
      Flows from Financing ActivitiesIncrease
      in Notes payable
            
            
            47,500
            
            
            
            277,500Payments  on
      Notes payable
            
            
            (134,400
            )
            
            
            -Sale
      of Warrants
            
            
            -
            
            
            
            120,000Sale
      of Common stock
            
            
            -
            
            
            
            35,000Cash
      Flows Provided by Financing Activities
            
            
            (86,900
            )
            
            
            432,500Net
      Increase in Cash and Cash Equivalents
            
            
            (8,132
            )
            
            
            4,640Cash
      and Cash Equivalents - Beginning
            
            
            333
            
            
            
            (4,307
            )Cash
      and Cash Equivalents - Ending
            
            $
            (7,799
            )
            
            $
            333See
      accompanying notes to financial statements.





F-5


EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 History:
 
 The
Company is a Nevada corporation incorporated on February 19, 1997, and is a
reporting company with the Securities and Exchange Commission.  It
changed its name from L.L. Brown International, Inc. to Terra Block
International Inc. on February 19, 2003.
 
 On
February 14, 2003 the Company entered into a Share Exchange Agreement with Terra
Block Consolidated, Inc.  The agreement provides for 100% of the
shares of Terra Block Consolidated, Inc. to be acquired by the Company in
exchange for shares of common stock of the Company, with the total issued and
outstanding shares of the Company immediately after the closing and a 2 to 1
reverse split, of 10,000,018.  The Company’s former subsidiary, LLBA
has been spun off, leaving Terra Block Consolidated, Inc. as the sole operating
subsidiary of the Company after effecting the agreement.  The new
combination also assumed $100,660 of accounts payable.  The
combination was accounted for as a reverse merger whereby the acquired company
is treated as the acquiring company for accounting purposes.
 
 Terra
Block Consolidated, Inc. was incorporated in Nevada on May 30, 2002 and engages
in the manufacture, distribution and application of technologically advanced
building products through a licensing arrangement with Terra Block,
Inc.  Terra Block Consolidated, Inc. has the exclusive right to make,
have made, use and sell Terra Block, Inc.’s products anywhere in the
world.  Terra Block, Inc. is a related party of Terra Block
International, Inc. as a shareholder.  The license agreements provide
Terra Block Consolidated, Inc. the rights to all patented technologies, trade
secret materials, copyrights, trademarks and all intellectual property of Terra
Block Inc. The license is valid until terminated by Terra Block Consolidated,
Inc. with 30 days advance written notice to Terra Block, Inc. or by Terra Block,
Inc., if there is a material breach of the licensing agreement by Terra Block
Consolidated, Inc.  Under this agreement, Terra Block Consolidated,
Inc. has the exclusive right to buy the license patent rights for
$10,000,000.  This agreement was terminated January 10,
2005.
 
 On
January 21, 2004, the Company entered into a Stock Purchase Agreement with an
individual to sell 3,600,000 shares of common stock for $250,000.  The
purchaser also, is to receive redeemable common stock purchase warrants to
acquire 1,000,000 shares of common stock at an exercise price of $.10 per share
until January 20, 2009.  In addition, 1,500,000 shares of common stock
were issued as a commission in connection with this stock sale.
 
 F-6
 
 
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 On August
10, 2004, the Company issued 1,250,000 shares of common stock as
compensation.  The shares were valued at par value.
 
 On
October 4, 2004, the Company issued 300,000 shares of common stock as prepaid
interest.  The shares were valued at par value.
 
 On
October 29 and December 16, 2004, the Company entered into two stock
subscription agreements with the same party.  The agreements sold
10,000,000 shares of common stock at $125,000.  At June 30, 2005 there
is $0 due the Company from this transaction.
 
 On
December 16, 2004, the Company sold 1,200,000 shares of common stock for
$15,000.
 
 On
February 11, 2005, the Company changed its name to EarthBlock Technologies,
Inc.
 
 On June
8, 2005, the Company sold 4,000,000 shares of common stock for
$10,000.
 
 On
February 16, 2006, the Company sold 4,000,000 shares of common stock for
$20,000.
 
 On
February 21, 2006, the Company issued 2,500,000 shares of common stock for
services.  The shares issued were valued at the market value of the
stock on date of issue, total value $87,500.
 
 On March
29, 2006, the Company sold 1,500,000 shares of common stock for
$7,500.
 
 On March
30, 2006, the Company sold 1,500,000 shares of common stock for
$7,500.
 
 On April
26, 2006, the Company issued 2,500,000 shares of common stock for
services.  The shares issued were valued at the market value of the
stock on date of issue, total value $300,000.
 
 On May 9,
2006, the Company issued 2,000,000 shares of common stock for
services.  The shares issued were valued at the market value of the
stock on date of issue, total value $120,000.
 
 On June
27, 2006, the Company issued 1,250,000 shares of common stock for
services.  The shares issued were valued at the market value of the
stock on date of issue, total value $37,500.
 
 On June
27, 2006, the Company issued 11,400,000 shares of common stock to two note
holders to stay their calling due the note.  No formal agreement was
signed.  The shares issued were valued at the market value of the
stock on date of issue, total value $342,000.
 F-7
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 On August
1, 2006, the Company issued 2,000,000 shares of common stock to two individuals
for services.  The shares were valued at the market price of the stock
on the date of the issue, total value $44,000.
 
 On August
23, 2006, the Company issued 10,000,000 shares of common stock to three
individuals for services.  The shares were valued at the market price
of the stock on the date of issue, total value $235,000.
 
 On
December 7, 2006, the Company issued 4,000,000 shares of common stock to an
individual for services.  The shares were valued at the market price
of the stock on the date of issue, total value $40,000.
 
 On
January 10, 2007, the Company issued 4,500,000 shares of common stock to an
individual for services.  The shares were valued at the market price
of the stock on the date of issue, total value $45,000.
 
 On June
27, 2007, the Company issued 5,000,000 shares of common stock to an individual
for services.  The shares were valued at the market price on the date
of issue, total value $20,000.
 
 Basis of
Consolidation:
 
 The
accompanying consolidated financial statements include the accounts of
EarthBlock Technologies, Inc. and Terra Block Consolidated, Inc.  All
significant inter-company accounts and transactions, if any, have been
eliminated in consolidation.
 
 Cash and Cash
Equivalents:
 
 For the
purposes of the Statement of Cash Flows, the Company considers all short-term
debt securities to be cash equivalents.
 
 Cash paid
during the period for:
 2007
                
                
                2006Interest
                
                $
                0
                
                
                $
                0Income taxes
                
                $
                0
                
                
                $
                0
  F-8
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES
TO FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 1 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
 
 Income
Taxes:
 
 The
Company accounts for income taxes under a method, which requires a company to
recognize deferred tax assets and liabilities for the expected future tax
consequences of
 
 Use of
Estimates:
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures.  Accordingly, actual
results could differ from those estimates.
 
 Development
Stage:
 
 The
Company elected to exit the development stage during the second quarter of 2007
with the sale of its first two earth compacted homes.
 
 NOTE 2 – NOTES
PAYABLE
 
 Terra
Block Consolidated, Inc.’s Notes Payable:
 
 On
October 15, 2002 the Company entered into a loan agreement with an individual to
borrow $15,000.  The terms of the agreement called for the principal
sum of $15,000 to be paid on or before November 15, 2002 and an additional
interest amount of $15,000 to be paid on April 15, 2003.  The note is
unsecured.  A payment of $7,500 was made on February 3, 2004. The
Company is in default under this agreement. The lender has not made formal
demand for payment to date. The balance due on this note at December 31, 2007
and December 31, 2006 was $7,500 plus accrued interest.
 
 On
October 21, 2002 the Company entered into a loan agreement with an individual to
borrow $10,000.  The terms of the agreement called for the principal
sum of $10,000 to be paid within 45 days, and an additional interest amount of
$10,000 to be paid within 180 days.  The note is
unsecured.  A payment of $5,000 was made on February 3,
2004.  The Company is in default under this agreement. The lender has
not made formal demand for payment to date. The balance due on this note at
December 31, 2007 and December 31, 2006 was $5,000 plus accrued
interest.
 F-9
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 2 – NOTES PAYABLE –
CONTINUED
 
 On
December 19, 2002 the Company entered into a loan agreement with an individual
to borrow $10,000.  The terms of the agreement called for the
principal sum of $10,000 to be paid on or before April 15, 2003 plus interest of
$2,000.  In the event that the principal has not been repaid by April
30, 2003, additional interest is owed equal to $200 per month thereafter. In
addition 10,000 shares of common stock will be delivered as additional
consideration.  The note is unsecured.  In addition to the
issue of common stock, a payment of $5,000 was made on February 3,
2004.  The Company is in default under this agreement. The lender has
not made formal demand for payment to date. The balance due on this note at
December 31, 2007 and December 31, 2006 was $5,000 plus accrued
interest.
 
 On
December 19, 2002 the Company entered into a loan agreement with an individual
to borrow $10,000.  The terms of the agreement called for the
principal sum of $10,000 to be paid on or before April 15, 2003 plus interest of
$2,000.  In the event that the principal has not been repaid by April
30, 2003, additional interest is owed equal to $200 per month thereafter. In
addition 10,000 shares of common stock will be delivered as additional
consideration.  The note is unsecured.  In addition to the
issue of common stock, a payment of $5,000 was made on February 3,
2004.  The Company is in default under this agreement. The lender has
not made formal demand for payment to date. The balance due on this note at
December 31, 2007 and December 31, 2006 was $5,000 plus accrued
interest.
 
 On
December 20, 2002 the Company entered into a loan agreement with an individual
to borrow $10,000.  The terms of the agreement called for the
principal sum of $10,000 to be paid on or before March 20, 2003 plus interest of
$2,000.  The note is unsecured.  A payment of $5,000 was
made on February 3, 2004.  The Company is in default under this
agreement. The lender has not made formal demand for payment to date. The
balance due on this note at December 31, 2007 and December 31, 2006 was $5,000
plus accrued interest.
 
 On
December 23, 2002 the Company entered into a loan agreement with an individual
to borrow $5,000.  The terms of the agreement called for the principal
sum of $5,000 to be paid on or before April 23, 2003 plus interest of
$1,000.  The note is unsecured.  A payment of $2,500 was
made on February 3, 2004.  The Company is in default under this
agreement. The lender has not made formal demand for payment to date. The
balance due on this note at December 31, 2007 and December 31, 2006 was $2,500
plus accrued interest.
 
 On
January 15, 2003 the Company entered into a loan agreement with an individual to
borrow $20,000.  The terms of the agreement called for the principal
sum of $20,000 to be paid on or before April 30, 2003 plus interest of
$4,000.   In the event that the principal has not been repaid by
April 30, 2003, additional interest is owed equal to $400 per month
thereafter.  In addition 20,000 shares of common stock will be
delivered as additional consideration. The note is unsecured.  In
addition to the issue of common stock, a payment of $10,000 was made on February
3, 2004.  The Company is in default under this agreement. The lender
has not made formal demand for payment to date.  The balance on this
note at December 31, 2007 and December 31, 2006 was $10,000 plus accrued
interest.
 F-10
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 2 – NOTES PAYABLE –
CONTINUED
  On March
14, 2003 the Company entered into a loan agreement with an individual to borrow
$10,000.  The terms of the agreement called for the principal sum of
$10,000 to be paid on or before July 14, 2003 plus interest of
$2,000.  The note is unsecured.  A payment of $5,000 was
made on February 3, 2004.  The Company is in default under this
agreement. The lender has not made formal demand for payment to date. The
balance due on this note at December 31, 2007 and December 31, 2006 was $5,000
plus accrued interest.
 
 EarthBlock
Technologies, Inc.’s Notes Payable:
 
 On
October 6, 2003 the Company entered into a loan agreement with an individual to
borrow $20,000 at 10% interest due October 6, 2004.  In addition
50,000 shares of common stock will be delivered as additional consideration. The
note is unsecured. The Company has issued the common stock required under this
agreement.  The balance on this note at December 31, 2007 and December
31, 2006 was $7,500 plus accrued interest.
 
 On
October 6, 2003 the Company entered into a loan agreement with an investment
consortium to borrow $12,500 at 10% interest due October 6, 2004.  In
addition 200,000 shares of common stock will be delivered as additional
consideration. The note is unsecured. The Company has issued the common stock
required under this agreement.  The balance on this note at December
31, 2007 and December 31, 2006 was $0 and $12,500 plus accrued interest,
respectively.
 
 On
October 6, 2003 the Company entered into a loan agreement with an individual to
borrow $12,500 at 10% interest due October 6, 2004. The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $0 and $12,500 plus accrued interest, respectively.
 
 On April
30, 2004 the Company entered into a loan agreement with an Investment Company to
borrow $100,000 at 10% interest due December 31, 2004. The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $100,000 plus accrued interest.
 F-11
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 2 – NOTES PAYABLE –
CONTINUED
 
 On July
13, 2004 the Company entered into a loan agreement with an Investment Company to
borrow $20,000 at 10% interest due January 15, 2005. The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $20,000 plus accrued interest.
 
 On August
23, 2005 the Company entered into a loan agreement with an individual to borrow
$35,000 at 12% interest due February 23, 2006.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $47,500 and $35,000 plus accrued interest,
respectively.  This note was refunded in 2007 for
$47,500.
 
 On August
23, 2005 the Company entered into a loan agreement with an Investment Company to
borrow $15,000 at 12% interest due February 23, 2006.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $15,000 plus accrued interest.
 
 On June
29, 2006, the Company entered into a loan agreement with an individual to borrow
$209,000 at 12% interest due June 29, 2007.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $187,500 and $209,000 plus accrued interest,
respectively.
 
 On July
5, 2006, the Company entered into a loan agreement with an individual to borrow
$24,000 at 12% interest due July 5, 2007.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $0 and $24,000 plus accrued interest, respectively.
 
 On July
20, 2006, the Company entered into a loan agreement with an individual to borrow
$7,000 at 12% interest due July 20, 2007.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $5,000 and $7,000 accrued interest, respectively.
 
 On August
4 2006, the Company entered into a loan agreement with an individual to borrow
$22,500 at 12% interest due August 4, 2007.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $22,500 plus accrued interest.
 
 On August
17, 2006, the Company entered into a loan agreement with an individual to borrow
$15,000 at 12% interest due August 17, 2007.  The note is
unsecured.  The balance on this note at December 31, 2007 and December
31, 2006 was $0 and $15,000 plus accrued interest, respectively.
 F-12
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 2 – NOTES PAYABLE –
CONTINUED
 
 All notes
are in default, payment was not made on notes stated due dates.  The
Company has not received any notices of default.
 
 NOTE 3 – STOCKHOLDERS’
EQUITY
 
 Preferred
Stock
 
 At
December 31, 2007 and December 31, 2006, the Company had 10,000,000 shares
authorized of convertible preferred stock with a par value of $0.001 per
share.  Additional terms and conditions of the stock are to be set by
the board of directors of the Company at the time of issue.  On
February 7, 2006, the Company established a Series A Preferred stock, consisting
of two shares authorized and outstanding.  The shares have no dividend
rights, no liquidating preference, no conversion rights and no redemption
rights.  However, the two shares voting in aggregate, to vote on all
shareholder matters equal to 60% of the total common share voting. There were 2
shares outstanding at December 31, 2007 December 31, 2006
respectively.
 
 Common
Stock
 
 At
December 31, 2006 the Company had 100,000,000 shares authorized common stock
with a par value of $0.001 per share.  On June 21, 2007, the Company
increased the authorized shares to 2,000,000,000 shares with a par value of
$0.001 per share.  There were 101,965,018 and 92,465,018 shares
outstanding at December 31, 2007 and December 31, 2006
respectively.
 
 Warrants
 
 On May 4,
May 9, and June 22, 2006, the Company sold 1,000,000 Class A Warrants for
$17,500.  Total Class A Warrants sold were 3,000,000 for a total
raised of $52,500.  Class A Warrants exercise at a price equal to the
average weighted price for the lowest eight days of the proceeding 20 trading
days multiplied by 70% per share, with a minimum exercise price of $.007 and a
maximum exercise price equal to the greater of $.025 or 50% of the computed
price.  Class A Warrants vest monthly and shall expire 90 days from
the day first vested.
 
 On July
17 2006, the Company sold 1,000,000 Class A Warrants for
$17,500.  Class A Warrants exercise at a price equal to the average
weighted price for the lowest eight days of the proceeding 20 trading days
multiplied by 70% per share, with a minimum exercise price of $.007 and a
maximum exercise price equal to the greater of $.025 or 50% of the computed
price.  Class A Warrants vest monthly and shall expire 90 days from
the day first vested.
 F-13
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 3 – STOCKHOLDERS’
EQUITY – CONTINUED
 
 On August
23, 2006, the Company sold 10,000,000 Class A Warrants for
$50,000.  Class A Warrants exercise at a price equal to the average
weighted price for the lowest eight days of the proceeding 20 trading days
multiplied by 70% per share, with a minimum exercise price of $.007 and a
maximum exercise price equal to the greater of $.025 or 50% of the computed
price.  Class A Warrants vest monthly and shall expire 90 days from
the day first vested.
 
 All
warrants were exercised as of December 31, 2006.
 
 NOTE 4 –
COMMITMENTS
 
 The
Company rents its present shared office space on a month to month basis. The
Company expects to continue on that basis in 2006.  Rent expense
through December 31, 2007 and December 31, 2006 was $6,307 and $13,776
respectively.
 
 NOTE 5 – DERIVATIVE
LIABILITY ARRISING FROM WARRANTS
 
 The
Company accounts for debt with embedded conversion features and warrant issues
in accordance with EITF 98-5: Accounting for convertible
securities with beneficial conversion features or contingency adjustable
conversionand EITF No. 00-27: Application of issue No 98-5 to
certain convertible instruments.  Conversion features
determined to be beneficial to the holder are valued at fair value and recorded
to additional paid in capital.  The Company determines the fair value
to be ascribed to the detachable warrants issued with the convertible debentures
utilizing the Black-Scholes
method.  Any discount derived from determining the fair value to the
debenture conversion features and warrants is amortized to financing cost over
the life of the debenture.  The unamortized costs if any, upon the
conversion of the warrants is expensed to financing cost on a pro rata basis
over the life of the warrant.
 
 Debt
issue with the variable conversion features are considered to be embedded
derivatives and are accountable in accordance with FASB 133; Accounting for Derivative
Instruments and Hedging Activities.  The fairs value of the
embedded derivative is recorded to derivative liability.  This
liability is required to be marked each reporting period.  The
resulting discount on the debt is amortized to interest expense over the life of
the related debt.
 
 NOTE 6 – RELATED
PARTIES
 
 The
Company owed its officers who are also shareholders $585,955 and $609,655 in
accrued wages at December 31, 2007 and December 31, 2006
respectively.  There are no other amounts due to or from these
shareholder officers.
 F-14
 
 EarthBlock
Technologies, Inc. and Subsidiary
 NOTES TO
FINANCIAL STATEMENTS
 December
31, 2007
 
 NOTE 7 – GOING
CONCERN
 
 The Company has not generated
significant revenues or profits to date.  This factor among others
raises considerable doubt the Company will be able to continue as a going
concern.  The
Company’s continuation as a going concern depends upon its ability to generate
sufficient cash flow to conduct its operations and its ability to obtain
additional sources of capital and financing.  The accompanying
consolidated financial statements do not include any adjustments that may result
from the outcome of this uncertainty.  Managements plans to relieve
these problems by continuing to raise working capital either through stock sales
or loans.
 
 NOTE 8 – SUBSQUENT
EVENTS
 
 On
January 31, 2008, the Company received a default judgment against it for
$527,665.  The judgment was the result of a lawsuit filed in
connection with one of the homes the company built in 2007.  The
Company was not able to defend the suite due to a lack of funds.  This
judgment has been recorded as of December 31, 2007 in the statements
attached.


F-15