UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





[X]
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended June 30,
2008


or


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





For
the transition period from ________________ to _________________.





Commission
file number 000-52852





BIOFUELS
POWER CORPORATION


(Exact
name of registrant as specified in its charter)





TEXAS
            56-2471691(State
      or other jurisdiction of
            (I.R.S.
      Employerincorporation
      or organization)
            Identification
      No.)25211
      Grogan’s Mill Road Suite 465
            77380The
      Woodlands, Texas
            (zip
      code)(Address
      of principal executive offices)Registrant’s
      telephone number, including area code
            (281)
      364-9500





Securities
Registered pursuant to Section 12(g) of the Act


Common
Stock, par value $0.001 per share





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 and (2) has been subject to such filing
      requirements for the past 90 days.
            Yes ___
            No  
      X





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer
            
            Accelerated
      filerNon-accelerated
      filer
            
            Smaller
      reporting company
            X




Indicate
      by check mark if the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).
            Yes ___
            No X





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





Title
      of Class
            Outstanding
      at June 30, 2008Common
      Stock, $0.001 Par Value
            30,805,594
      Shares














TABLE
OF CONTENTS







PART
      I
            FINANCIAL
      INFORMATION
            PAGEITEM
      1
            Financial
      StatementsBalance
      Sheets as of June 30, 2008 and December 31, 2007
            F-1Unaudited
      Consolidated Condensed Statements of Operations
            F-2for
      the six-month periods ended June 30, 2008 and 2007Unaudited
      Consolidated Condensed Statements of Cash Flow
            F-3for
      the six-month periods ended June 30, 2008 and 2007Notes
      to Unaudited Consolidated Condensed Financial Statements
            F-4ITEM
      2
            Managements’
      Discussion and Analysis of Financial Condition and Plan of
      Operation
            2ITEM
      3
            Quantitative
      and Qualitative Disclosures About Market Risk
            4ITEM
      4
            Controls
      and Procedures
            4PART
      II
            OTHER
      INFORMATIONITEM
      1
            Legal
      Proceedings
            6ITEM
      1A
            Risk
      Factors
            6ITEM
      2
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            6ITEM
      3
            Defaults
      Upon Senior Securities
            6ITEM
      4
            Submission
      of Matters to a Vote of Security Holders
            6ITEM
      5
            Other
      Information
            6ITEM
      6
            Exhibits
            6SIGNATURES
            7











BIOFUELS
POWER CORP.


CONSOLIDATED
BALANCE SHEETS


June
30, 2008 and December 31, 2007




June
      30,
              
              
              December
      31ASSETS
              
              2008
              
              
              2007(Unaudited)
              
              
              (See Note)Current
      AssetsCash
      and cash equivalents
              
              $
              43,179
              
              
              $
              1,089,308Accounts
      receivable
              
              
              206,717
              
              
              
              9,480Tax
      rebate receivable
              
              
              232,618
              
              
              
              229,100Investment
      in marketable securities (restricted)
              
              
              583,529
              
              
              
              -Accounts
      receivable - affliate
              
              
              -
              
              
              
              3,680Inventory
              
              
              141,466
              
              
              
              401,928Total
      current assets
              
              
              1,207,509
              
              
              
              1,733,496Property
      and equipment, net
              
              
              5,689,528
              
              
              
              5,753,535Investment
      in certificate of deposit (restricted)
              
              
              -
              
              
              
              889,823Total
      Assets
              
              $
              6,897,037
              
              
              $
              8,376,854LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
              
              
              893,692
              
              
              
              329,423Payable
      to affiliate
              
              
              -
              
              
              
              27,792Notes
      payable, unsecured
              
              
              100,000
              
              
              
              -Notes
      payable, secured
              
              
              440,000
              
              
              
              -Commissions
      payable
              
              
              -
              
              
              
              21,650Interest
      payable
              
              
              8,112
              
              
              
              14,264Total
      Current Liabilities
              
              
              1,441,804
              
              
              
              393,129Long
      Term DebtNotes
      payable, unsecured
              
              
              191,250
              
              
              
              191,250Minority
      Interest
              
              
              236,852
              
              
              
              544,195Total
      Liabilities
              
              
              1,869,906
              
              
              
              1,128,574Stockholders'
      EquityCommon
      stock, $.001 par value, 50,000,000 shares authorized;30,805,594
      and 30,306,390 shares issued and outstanding,respectively
              
              
              30,805
              
              
              
              30,306Additional
      paid in capital
              
              
              12,253,030
              
              
              
              11,776,732Deferred
      compensation
              
              
              (128,750
              )
              
              
              (595,000
              )Accumulated
      deficit
              
              
              (7,127,954
              )
              
              
              (3,963,758
              )Total
      Stockholders' Equity
              
              
              5,027,131
              
              
              
              7,248,280$
              6,897,037
              
              
              $
              8,376,854


Note:  The
balance sheet at December 31, 2007 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.


See
accompanying notes to unaudited consolidated condensed financial
statements.




F-1


BIOFUELS
POWER CORP.


UNAUDITED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS


for
the six months ended June 30, 2008 and 2007




2008
              
              
              2007RevenueSales
              
              
              $
              345,936
              
              
              $
              109,383Cost
      of sales
              
              
              1,418,621
              
              
              
              161,959Gross
      deficit
              
              
              (1,072,685
              )
              
              
              (52,576
              )Selling,
      general and administrative expenses
              
              
              2,146,478
              
              
              
              1,772,045Operating
      loss
              
              
              (3,219,163
              )
              
              
              (1,824,621
              )Other
      Income:Gain
      on investment in futures contract
              
              
              -
              
              
              
              1,711,000Unrealized
      loss on marketable securities
              
              
              (20,315
              )
              
              
              -Realized
      loss on sale of marketable securities
              
              
              (2,753
              )
              
              
              -Investment
      income
              
              
              33,887
              
              
              
              51,316Interest
      expense
              
              
              (25,696
              )
              
              
              -Total
      other income (loss), net
              
              
              (14,877
              )
              
              
              1,762,316Net
      loss before minority interest
              
              
              (3,234,040
              )
              
              
              (62,305
              )Minority
      interest
              
              
              69,844
              
              
              
              (506,923
              )Net
      loss
              
              $
              (3,164,196
              )
              
              $
              (569,228
              )Basic
      and diluted net loss per common share
              
              $
              (0.10
              )
              
              $
              (0.03
              )Weighted
      average common shares outstanding - basicand
      diluted
              
              
              30,747,926
              
              
              
              22,137,486




See
accompanying notes to unaudited consolidated condensed financial
statements.


F-2


BIOFUELS
POWER CORP.


UNAUDITED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS


for
the six months ended June 30, 2008 and 2007


2008
              
              
              2007Cash
      flows from operating activities:Net
      loss
              
              $
              (3,164,196
              )
              
              $
              (569,228
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
              
              
              702,234
              
              
              
              297,306Expenses
      related to issuance of common stock for limited
partnershipinterest
              
              
              12,501
              
              
              
              376,886Stock
      issued for services
              
              
              83,296
              
              
              
              -Gain
      on investment in futures contract
              
              
              -
              
              
              
              (1,711,000
              )Realized
      loss on sale of marketable securities
              
              
              2,753
              
              
              
              -Unrealized
      loss on marketable securities
              
              
              20,315
              
              
              
              -Minority
      interest
              
              
              (69,844
              )
              
              
              506,923Amortization
      of deferred compensation
              
              
              466,250
              
              
              
              -Bad
      debt expense
              
              
              -
              
              
              
              318,859Changes
      in operating assets and liabilities:Accounts
      receivable
              
              
              (197,237
              )
              
              
              (297,749
              )Tax
      rebate receivable
              
              
              (3,518
              )
              
              
              -Prepaid
      fuel cost
              
              
              -
              
              
              
              293,912Inventory
              
              
              260,462
              
              
              
              (26,400
              )Accounts
      payable
              
              
              564,269
              
              
              
              420,822Accrued
      expenses and other, net
              
              
              (51,914
              )
              
              
              -Net
      cash used in operating activities
              
              
              (1,374,629
              )
              
              
              (389,669
              )Cash
      flow from investing activities:Purchase
      of property and equipment
              
              
              (650,728
              )
              
              
              (3,043,011
              )Advances
      to affiliate
              
              
              -
              
              
              
              (318,859
              )Purchase
      of investment in futures contract
              
              
              -
              
              
              
              (574,110
              )Purchase
      of certificate of deposit
              
              
              (12,326
              )
              
              
              -Purchase
      of marketable securities
              
              
              (806,597
              )
              
              
              -Proceeds
      from sale of futures contract
              
              
              -
              
              
              
              2,555,000Proceeds
      from sale of marketable securities
              
              
              200,000
              
              
              
              -Proceed
      from liquidation of restricted certificate of deposit
              
              
              902,149
              
              
              
              -Net
      cash used in investing activities
              
              
              (367,502
              )
              
              
              (1,380,980
              )Cash
      flows from financing activities:Net
      proceeds from sale of common stock
              
              
              156,002
              
              
              
              2,713,079Net
      proceeds from issuance of notes payable
              
              
              540,000
              
              
              
              -Net
      proceeds (distributions) to / from minority interest
              
              
              -
              
              
              
              (355,000
              )Net
      proceeds from minority interests
              
              
              -
              
              
              
              (56,038
              )Purchase
      of limited partnerships interests
              
              
              -
              
              
              
              (512,500
              )Net
      cash provided by financing activities
              
              
              696,002
              
              
              
              1,789,541Net
      increase (decrease) in cash and cash equivalents
              
              
              (1,046,129
              )
              
              
              18,892Cash
      and cash equivalents, beginning of period
              
              
              1,089,308
              
              
              
              2,703,535Cash
      and cash equivalents, end of period
              
              $
              43,179
              
              
              $
              2,722,427Supplemental
      disclosures of cash flow information:Interest
      paid
              
              $
              25,696
              
              
              $
              -Income
      taxes paid
              
              $
              -
              
              
              $
              -Accrue
      accounts payable for offering expenses
              
              $
              -
              
              
              $
              492,350Common
      stock issued upon conversion of limited partnership
    interest
              
              $
              237,499
              
              
              $
              -


See
accompanying notes to unaudited consolidated condensed financial
statements.


F-3


BIOFUELS POWER
CORPORATION


NOTES
TO FINANCIAL STATEMENTS


(Information
with respect to events occurring after December 31, 2007 is
unaudited)





1.         Summary
of Significant Accounting Policies





Basis of
Presentation The accompanying interim unaudited consolidated condensed
financial statements have been prepared without audit pursuant to the rules and
regulations of the U.S. Securities and Exchange Commission.  Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations.  These unaudited consolidated condensed financial
statements should be read in conjunction with the audited financial statements
and notes thereto of Biofuels Power Corp. (the "Company") for the year ended
December 31, 2007.  In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation of financial position, results of operations and cash flows for the
interim periods presented have been included.  Operating results for
the interim periods are not necessarily indicative of the results that may be
expected for the respective full year.





The
balance sheet at December 31, 2007 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for a complete
presentation of annual financial statements.





BackgroundBiofuels Power Corp.
(“BPC”), a Texas corporation, was incorporated in 2004 as Aegis Products,
Inc.  The Company is a distributed energy company that is pioneering
the use of biodiesel to fuel small electric generating facilities that are
located in close proximity to end-users.  BPC’s first power plant is
currently located near Houston, Texas in the city of Oak Ridge
North.  During February 2007, BPC began generating and selling its
power through Fulcrum Power to Centerpoint Energy.





Aegis
Products, Inc. was incorporated in Texas on January 20, 2004 as a wholly owned
subsidiary of Texoga Technologies Corp. (“Texoga”).  Effective
December 31, 2004, Aegis was spun off from Texoga through a share distribution
to the Texoga shareholders collectively received a total of 14,512,380
shares, or 100% of the Company's then outstanding stock.  During 2006,
the Texoga BioFuels 2006-1 and 2006-2 partnerships were established and each
raised $3.5 million to develop biofueled power projects in the Houston, Texas
area.  Texoga began serving as the general partner and on November 6,
2006, Texoga transferred its general partner role to Aegis which simultaneously
changed its name to Biofuels Power Corp.





During
2007 BPC created a wholly owned subsidiary, Alternative Energy Consultants, LLC
(“AEC”).  AEC will engage in the business of designing and building of
standardized biodiesel refineries.





ConsolidationIn accordance with FIN
46(R), which requires the consolidation of certain variable interest entities,
these consolidated financial statements include the accounts of BPC, Texoga
BioFuels 2006-1, Ltd, (“TBF-1”) and Texoga BioFuels 2006-2, Ltd.
(“TBF-2”).  BPC, TBF-1 and TBF-2 are referred to collectively as the
“Company”.  For presentation purposes, the equity interests of the
limited partners in TBF-1 and TBF-2 have been reflected as minority interest
shareholders.  The consolidated financial statements also include the
accounts of Alternative Energy Consultants, LLC, which is a wholly owned
subsidiary of BPC.  All material intercompany transactions have been
eliminated in consolidation.





Use of Estimates
and AssumptionsThe preparation of
financial statements in conformity with accounting principles generally accepted
in the United States of America (“U.S.”) requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
periods.  Actual results could materially differ from those
estimates.





Cash and Cash
EquivalentsThe Company considers
any highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.





Derivative
Instruments and HedgingThe Company uses
derivatives to hedge against increases in the price of feedstock, primarily
soybean oils, used in the production of biodiesel.  All derivative
instruments are recorded as assets or liabilities on the balance sheet at fair
value.  Changes in the fair value of derivatives are either recorded
in the income statement or other comprehensive income, as
appropriate.  The gain or loss on derivatives designated as fair value
hedges and the offsetting loss or gain on the hedged item attributable to the
hedged risk are included in income in the period that changes in fair value
occur.  The effective portion of the gain or loss on derivatives
designated as cash flow hedges is included in other comprehensive income in the
period that changes in fair value occur and is reclassified to income in the
same period that the hedged item affects income.  The remaining gain
or loss in excess of the cumulative change in the present value of the cash
flows of the hedge item, if any, is recognized in income.  As of June
30, 2008, the Company did not have any open hedge contracts.







F-4




Revenue
RecognitionRevenue, which began to
be recorded during 2007, is recognized when the electricity produced is provided
to the electric grid maintained by the Electric Reliability Council of Texas
(ERCOT).  A power sales agreement is in place with Fulcrum Power, a
Qualified Scheduling Entity (QSE) for ERCOT.  Electric sales into
ERCOT may only be made through the scheduling of a QSE, which also receives
payment from ERCOT for all sales in a process called
“settlement.”  Initial settlement takes place eight days after the
date of sale with subsequent adjustments at 60 days and 180 days after the sale,
if needed.  To date, the Company has not experienced any material
settlement adjustments and it does not anticipate material settlement
adjustments in the future.  All of the sales from the Company’s Oak
Ridge North facility are made into the ERCOT Balancing Energy
Market.  Such sales are priced by ERCOT for each 15-minute interval of
each hour of each day.  The price for all balancing energy dispatched
in a given interval is the highest bid of any electricity dispatched by ERCOT in
that interval.  The price per megawatt is determined at the time of
the sale.  ERCOT bills each utility company purchaser, collects
the money due under a formal settlement process and remits the proceeds to the
QSE scheduling the electricity actually purchased.  The QSE pays the
power generator when it receives payment from ERCOT.  The Company pays
Fulcrum Power a monthly fee for services that are not directly related to the
revenue the Company receives from sales of electricity.





Biodiesel Tax
CreditsBiodiesel is classified
as a renewable fuel that is eligible for Federal credits of $1.00 per gallon for
biodiesel manufactured from virgin agricultural products and $0.50 per gallon
for biodiesel produced from non-virgin oils and fats.  The gallons
used are reported to the Federal government and the Company receives a payment
of $1.00 per gallon, which is accounted for as a direct offset to fuel
prices and included in the Company’s cost of sales.  During the six
months ended June 30, 2008, the Company received $359,121 in Federal
credits.





Accounts
ReceivableAccounts receivable
consist primarily of amounts due from certain companies for the sale of power to
the electric grid.  An allowance for doubtful accounts is provided,
when appropriate, based on past experience and other factors which, in
management’s judgment, deserve current recognition in estimating probable bad
debts.  Such factors include circumstances with respect to specific
accounts receivable, growth and composition of accounts receivable, the
relationship of the allowance for doubtful accounts to accounts receivable and
current economic conditions.  As of June 30, 2008 the Company had
trade accounts receivable of $206,717 and Federal credits receivable of
$232,618.




Investment
in Marketable SecuritiesStatement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity Securities," ('SFAS
115") requires that all applicable investments be classified as trading
securities, available for sale securities or held-to-maturity
securities.




Investment securities
classified as held-to-maturity are those securities which the Company has the
ability and positive intent to hold to maturity regardless of changes in market
condition, liquidity needs, or changes in general economic conditions. 
These securities are stated at cost, adjusted for amortization of premiums and
accretion of discounts, over the period to maturity using the interest
method.




Investment securities
classified as available-for-sale are those securities that the Company intends
to hold for an indefinite period of time, but not necessarily to maturity. 
Any decision to sell a security classified as available-for-sale would be based
on various factors, including significant movements in interest rates, liquidity
needs, and other similar factors.  These securities are carried at fair
value with unrealized gains or losses reported as increases or decreases in
accumulated other comprehensive income, net of the related deferred tax
effect.




Trading securities are
those securities that may be purchased and held principally for the purpose of
selling in the near term.  Such securities are carried at fair value with
unrealized gains or losses included in earnings.  Realized gains or losses,
determined on the basis of the cost of specific securities sold, are included in
earnings.  Unrealized losses for securities classified as held to maturity
and available for sale judged to be other than temporary are charged to
operations.  As of June 30, 2008, all securities within the Company's
investment in marketable securities were classified as trading.





InventoryInventories are stated
at the lower of cost or market and consists of 67,627 gallons of unprocessed
fuel stock and 14,050 gallons of processed fuel stock at June 30,
2008.  Cost is determined using the first-in first-out (“FIFO”)
method.





Property and
EquipmentProperty and equipment
are stated at cost less accumulated depreciation.  Expenditures for
normal repairs and maintenance are charged to expense as
incurred.  Fixed assets are depreciated using the straight-line method
for financial reporting purposes over their estimated useful life of 3 to 5
years.  The cost and related accumulated depreciation of assets sold
or otherwise disposed of are removed from the accounts and any gain or loss
is included in operations.





Impairment of
Long-Lived AssetManagement reviews
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be realizable.  If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset are compared to the asset’s carrying value amount to determine if
an impairment of such asset is necessary.  The effect of any
impairment would be to expense the difference between the fair value of such
asset and its carrying value.





Income
TaxesThe
Company uses the liability method in accounting for income
taxes.  Under this method, deferred tax assets and liabilities are
determined based on differences between financial reporting and income tax
carrying amounts of assets and liabilities and are measured using the enacted
tax rates and laws that will be in effect when the differences are expected to
reverse.  The Company provides a valuation allowance to reduce
deferred tax assets to their net realizable value. The Partnership’s taxable
income or loss for any period is included in the tax returns of the individual
partners and, therefore, the Partnership does not provide for federal income
taxes.






F-5




(Loss)/Income Per
Common ShareThe Company provides
basic and dilutive (loss)/income per common share information for each period
presented.  The basic net loss per common share is computed by
dividing the net (loss)/income by the weighted average number of common shares
outstanding.  Diluted net (loss)/income per common share is computed
by dividing the net (loss)/income, adjusted on an "as if converted" basis, by
the weighted average number of common shares outstanding plus potential dilutive
securities.  For the six months ended June 30, 2008 and 2007, the
Company did not have any potential dilutive securities.





Stock-Based
CompensationOn January 1, 2006, the
Company adopted Statement of Financial Accounting Standards 123(R) Share Based
Payments (“SFAS 123(R)”), using the modified prospective
method.  Under the modified prospective method, the Company would
begin recognizing expense on January 1, 2006 for the unvested portion of awards
granted before the adoption date expected to vest over the remaining vesting
period of the award.  New awards granted after the adoption date will
be expensed ratably over the vesting period of the award.





SFAS
123(R) is a revision of SFAS 123,Accounting for Stock-Based Compensation, and
supersedes APB No. 25,Accounting for Stock Issued to Employees .  Under SFAS 123(R),
the cost of employee services received in exchange for stock is measured based
on the grant-date fair value (with limited exceptions).  That cost is
to be recognized over the period during which an employee is required to provide
service in exchange for the award (usually the vesting period).  The
fair value of immediately vested shares is determined by reference to quoted
prices for similar shares and the fair value of shares issued subject to a
service period is estimated using an option-pricing model.  Excess tax
benefits, as defined in SFAS 123(R) are recognized as addition to
paid-in-capital.





Fair Value of
Financial Instruments The Company includes fair value information in the
notes to financial statements when the fair value of its financial instruments
is different from the book value.  When the book value approximates
fair value, no additional disclosure is made.  Fair value estimates
of financial instruments are based on relevant market information and may
be subjective in nature and involve uncertainties and matters of significant
judgment.  The Company believes that the carrying value of its assets
and liabilities approximates the fair value of such items.  The
Company does not hold or issue financial instruments for trading
purposes.





Concentration of
Credit RiskFinancial instruments
which subject the Company to concentrations of credit risk include cash and cash
equivalents and accounts receivable.  The Company maintains its cash
and cash equivalents with major financial institutions selected based upon
management’s assessment of the banks’ financial stability.  Balances
periodically exceed the $100,000 federal depository insurance
limit.  The Company has not experienced any losses on
deposits.  Accounts receivable generally arise from sales of power to
the electric grid. Collateral is generally not required for credit
granted.  The Company will provide allowances for potential credit
losses when necessary.





Recently Issued
Accounting PronouncementsFASB Statement of
Financial Accounting Standards No. 157,“Fair Value
Measurements”  (“SFAS 157”), issued in September 2006,
establishes a formal framework for measuring fair value under
GAAP.  It defines and codifies the many definitions of fair value
included among various other authoritative literature, clarifies and, in some
instances, expands on the guidance for implementing fair value measurements, and
increases the level of disclosure required for fair value
measurements.  Although SFAS 157 applies to and amends the provisions
of existing FASB and AICPA pronouncements, it does not, of itself, require any
new fair value measurements, nor does it establish valuation
standards.  SFAS 157 applies to all other accounting
pronouncements requiring or permitting fair value measurements, except for SFAS
No. 123 (F), share-based payment and related pronouncements, the practicability
exceptions to fair value determinations allowed by various other authoritative
pronouncements, and AICPA Statements of Position 97-2 and 98-9 that deal with
software revenue recognition.  This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years.  The adoption of SFAS
157 did not have a material impact on the Company’s financial condition or
results of operations.





In
February 2007, the FASB issued SFAS 159,“The Fair Value Option for Financial
Assets and Financial Liabilities” , which is an
elective, irrevocable election to measure eligible financial instruments and
certain other assets and liabilities at fair value on an
instrument-by-instrument basis.  The election may only be applied at
specified election dates and to instruments in their entirety rather than to
portions of instruments.  Upon initial election, the entity reports
the difference between the instruments’ carrying value and their fair value as a
cumulative-effect adjustment to the opening balance of retained
earnings.  At each subsequent reporting date, an entity reports in
earnings, unrealized gains and losses on items for which the fair value option
has been elected.  SFAS 159 is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and is applied on a
prospective basis.  Early adoption of SFAS 159 is permitted provided
the entity also elects to adopt the provisions of SFAS 157 as of the early
adoption date selected for SFAS 159.  The adoption of SFAS 159 did
not have a material impact on the Company's financial condition or results
of operations.








F-6


In
December 2007, the FASB issued a revision and replacement of SFAS 141(“SFAS
141R”), “Business
Combinations ,” to increase the relevance, representational faithfulness,
and comparability of the information a reporting entity provides in its
financial reports about a business combination and its effects.  SFAS
141R replaces SFAS 141, “Business Combinations ” but retains the fundamental requirements of SFAS
141 that the acquisition method of accounting be used and an acquirer be
identified for all business combinations.  SFAS 141R expands the
definition of a business and of a business combination and establishes how the
acquirer is to: (1) recognize and measure in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquired company; (2) recognize and measure the goodwill
acquired in the business combination or a gain from a bargain purchase; and
(3) determine what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination.  SFAS 141R is applicable to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008, and is to be applied
prospectively.  Early adoption is prohibited. SFAS 141R will impact
the Company only if it elects to enter into a business combination subsequent to
December 31, 2008.





In
December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in
Consolidated Financial Statements–an amendment of ARB No. 51
,” to improve the relevance, comparability, and transparency of the financial
information a reporting entity provides in its consolidated financial
statements.  SFAS 160 amends ARB 51 to establish accounting and
reporting standards for noncontrolling interests in subsidiaries and to make
certain consolidation procedures consistent with the requirements of SFAS
141R.  It defines a noncontrolling interest in a subsidiary as an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements.  SFAS 160 changes the way
the consolidated income statement is presented by requiring consolidated net
income to include amounts attributable to the parent and the noncontrolling
interest.  SFAS 160 establishes a single method of accounting for
changes in a parent’s ownership interest in a subsidiary that does not result in
deconsolidation.  SFAS 160 also requires expanded disclosures that
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners of a subsidiary.  SFAS 160 is
effective for financial statements issued for fiscal years beginning on or after
December 15, 2008, and interim periods within those fiscal
years.  Early adoption is prohibited.  SFAS 160 shall be
applied prospectively, with the exception of the presentation and disclosure
requirements which shall be applied retrospectively for all periods
presented.  The Company does not believe that the adoption of SFAS 160
would have a material effect on its consolidated financial position, results of
operations or cash flows.





2.         Going
Concern





During
the six months ended June 30, 2008, the Company has experienced negative
financial results as follows:


2008Accumulated
      deficit from prior periods
            
            $
            (3,963,758
            )Net
      loss for six-months ended June 30, 2008
            
            $
            (3,164,196
            )Accumulated
      deficit at June 30, 2008
            
            $
            (7,127,954
            )Negative
      cash flows used in operating activities
            
            $
            (1,374,629
            )





Management
has developed specific current and long-term plans to address its viability as a
going concern as follows:






            The
      Company is attempting to raise funds through debt and/or equity
      offerings.  If successful, these additional funds will be used
      to provide working capital. Subsequent to June 30, 2008, the Company has
      received a commitment for a short-term working capital loan that will meet
      cash flow needs while other efforts are on going to raise funds through
      debt and/or equity offerings.






            In
      the long-term, the Company believes that cash flows from growth in its
      operations will provide the resources for continued
      operations.






            The
      Company is also pursuing other strategic initiatives including a merger or
      sale of the Company as opportunities are
  available.








F-7




There can
be no assurance that the Company will have the ability to implement its business
plan and ultimately attain profitability.  The Company’s long-term
viability as a going concern is dependent upon three key factors, as
follows:





            The
      Company’s ability to obtain adequate sources of debt or equity funding to
      meet current commitments and fund the continuation of its business
      operations in the near term.
            The
      ability of the Company to control costs and increase
    revenues.
            The
      ability of the Company to ultimately achieve adequate profitability and
      cash flows from operations to sustain its operations.




3.         Hedge
Accounts





During
the six months ended June 30, 2007, the Company realized approximately $1.7
million in gain on certain commodity hedge accounts. All of the Company’s
commodity hedge investments were liquidated during the year ended December 31,
2007. The Company did not realize comparable hedge account gains during the
six-months ended June 30, 2008 and did not have any open hedge contracts at June
30, 2008.




4.         Investment
in Marketable Securities
  As of
June 30, 2008, the Company had  $583,529 in marketable securities that
consist of mutual funds.  These investments are classified as trading
securities during the periods presented and accordingly, are carried at market
value with changes in value reflected in the current period operations. 
Unrealized losses relating to trading securities held at June 30, 2008 were
($20,315).  During the six months ended June 30, 2008, net realized losses
on sales of marketable securities were $2,753.  These securities are
pledged as collateral for the Company's line of credit as disclosed in Note
6.





5.         Property
and Equipment





Property
and equipment consisted of the following at June 30, 2008:





2008Power
      generating equipment
            
            $
            5,825,978Buildings
      and improvements
            
            
            1,184,712Machinery
      and equipment
            
            
            186,334Less
      accumulated depreciation
            
            
            (1,507,496
            )Total
      property and equipment, net
            
            $
            5,689,528





Depreciation
expense for the six months ended June 30, 2008 and 2007 was $702,234 of which
$566,037 was included in Cost of Sales, and $297,306 of which $-0- was included
in Cost of Sales, respectively.





6.         Notes
Payable





During
April 2008, the Company entered into a line of credit agreement with a financial
institution which allows the Company to draw up to $440,000 in
principal.  The outstanding principal along with accrued interest is
due in April 2009.  The line of credit bears interest at a variable
rate based on the financial institution’s prime rate less one percentage point
(4% at June 30, 2008).  Interest payments are due
monthly.  The note is collateralized by the Company’s brokerage
account which currently holds its investments in marketable
securities.





As of
June 30, 2008, there are three remaining notes payable of $191,250 due to the
former limited partners of TBF-1.  These notes bear interest at 12.5%
due semi-annually.  Principal is due in full in forty-eight months
from the execution date of the note.  The notes are not
collateralized.





During
June 2008, the Company issued a note payable in the amount of $100,000 to a
unrelated third party.  The principal is due one year from the
issuance date and bears interest at 12%.  Interest payments are due
monthly beginning in August 2008.  This note is not
collateralized.





7.         Stockholders’
Equity





During
the six months ended June 30, 2008, the Company issued 72,537 shares of its
common stock as compensation for services rendered by consultants, and 110,002
shares of its common stock for cash. These shares were valued at $1.00 - $1.50
per share which was the fair value of the common stock on the date of grant
based on the cash price received for the common stock in a private
placement offering.





During
the six months ended June 30, 2008, limited partners in TBF-2 converted 250
partnership units at 1,267 shares per unit resulting in the Company issuing
316,665 shares of common stock.  The Company has recorded the value of
the excess shares issued upon conversion of the limited partnership interests of
$12,501 as settlement expense in selling, general and administrative expenses in
the accompanying statement of operations for the six months ended June 30,
2008.  At June 30, 2008, the Company owns 3,500 units of TBF-1 and
3,050 units of TBF-2, which represents 100% and 87% of the outstanding units of
the partnerships, respectively.









F-8


8.         Commitments
and Contingencies





LitigationThe Company does not
have any litigation at this time.





CommitmentsDuring March 2008, as
part of a renegotiation of its lease for office space, the Company’s investment
in certificate of deposit was released as collateral for a letter of credit that
previously guaranteed this lease.  Subsequent to June 30, 2008, these
funds were invested in various mutual funds and pledged as collateral for the
Company’s new line of credit agreement.





9.         Related
Party Transactions





In July
of 2008, the company’s Chief Executive Officer, Fred O’Connor, advanced the
company $10,000 in the form of a note payable. In August of 2008, the Company
repaid the loan.





10.         Subsequent
Events





In July
2008, the Company received a proposal for a $2.5 million loan commitment for the
purpose of providing funds for capital expenditures and working
capital.  The terms of this proposed loan commitment have not been
finalized, however, as of this report, $500,000 has been received as an advance
on the loan commitment.




















F-9





ITEM 2
            MANAGEMENT’S
      DISCUSSION AND ANALYSES OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





The
following discussion of the financial condition and plan of operations contains
forward-looking statements that involve risks and uncertainties. Please see
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”
elsewhere in this annual report on Form 10-K.





Financial
condition, liquidity and capital resources





At June
30, 2008, we had $6,897,037 in total assets and $1,869,906 in liabilities,
resulting in a stockholders’ equity of $5,027,131. Our net working capital
deficit at June 30, 2008 was ($234,295).





During
the six months ended June 30, 2008, we incurred a net loss of ($3,164,196),
which included $95,797 in non-cash expenses relating to equity issuance and
compensation transactions and $702,234 in non-cash depreciation
expense.





During
the six months ended June 30, 2008, our revenues were limited because our 10 Mw
Montgomery County facility was placed in service during the first quarter and we
experienced significant down-time as we refined and  resolved our
start-up issues, developed new operating protocols and resolved the typical
problems associated with placing a new generating facility in service. Our
revenues were also adversely impacted by seasonally low electric prices.
While our revenues were low during the first six months, our operating expenses
were higher than normal because of the non-recurring costs associated with the
start-up of our Montgomery County facility, the non-recurring costs of
registering our securities under the Exchange Act, and use of higher priced
feedstock and fuel inventories that we purchased in 2007. For the remainder of
the year, we expect our cost of sales to decline significantly as a direct
result of reduced start-up expenses and significantly reduced fuel costs. We
also expect our outlays for legal and accounting services to decline
significantly.





We
believe our available resources, together with our anticipated operating revenue
and the anticipated proceeds of a $2 million loan commitment we negotiated in
July 2008, will be sufficient to pay our anticipated operating expenses for a
period of three to six months from the date of this quarterly report on Form
10-Q. Our available resources are not sufficient to pay all of our anticipated
capital costs and we are presently seeking additional financing. We believe we
will need at least $20 million in additional capital to finance our planned
facility expansions and future acquisitions. Capital requirements are difficult
to plan for companies like ours that are developing novel business models. We
expect that we will need additional capital to pay our day-to-day operating
costs, finance our feedstock and fuel inventories, finance additions to our
infrastructure, pay for the development of additional generating facilities and
the marketing of our green electricity. We intend to pursue additional financing
as opportunities arise.





Our
ability to obtain additional financing will be subject to a variety of
uncertainties. The inability to raise additional funds on terms favorable to us,
or at all, could have a material adverse effect on our business, financial
condition and results of operations. If we are unable to obtain additional
capital when required, we would be forced to scale back our planned
expenditures, which would adversely affect our growth prospects.





As a
result of our limited operating history, our operating plan and our growth
strategy are unproven and we have limited insight into the long-term trends that
may impact our business. There is no assurance that our operating plan and
growth strategy will be successful or that we will be able to compete
effectively, achieve market acceptance for green electricity or address the
risks associated with our existing and planned business
activities.





Plan
of Operation





We began
selling electricity from our 5 MW facility in Oak Ridge North, Texas in February
2007 and commenced commercial sales of electricity from our 10 MW Montgomery
County facility in January 2008. During the six months ended June 30, 2008, we
received $345,936 in revenue from our generating facilities, incurred
$1,418,621 in fuel and direct operating costs resulting in a gross
loss of ($1,072,685). After deducting $2,146,478 in selling, general and
administrative expenses, we had a net operating loss of ($3,219,163). During the
six months ended June 30, 2007, we liquidated cash flow hedge investments and
realized $1,711,000 in non-recurring investment gains. After adjusting for
other income, net and the minority interests of the limited partners in TBF-I
and TBF-II, our net loss for the six months ended June 30, 2008 and 2007 was
($3,164,196) and ($569,228).






-2-




We plan
to operate our Oak Ridge North and Montgomery County facilities as peaking
plants until we are able to negotiate suitable end-user contracts for the sale
of green electricity. Based on prevailing electric prices in Texas, we believe
we will be able to operate our facilities for at least six hours per day during
the winter months and for up to 18 hours per day during the summer months.
Accordingly, our revenues will be cyclical and our performance will vary
significantly from quarter to quarter. Since our single largest operating
expense will be fuel costs, which have been highly variable during recent
months, there is no assurance that we will ever attain
profitability.





We own a
2.5 MW steam turbine generator but cannot put the turbine in service until we
buy a suitable boiler, complete project engineering, build out the new system
and conduct necessary shakedown testing. We are presently conducting a technical
and mechanical evaluation of several used boilers that appear suitable for our
purposes and can be acquired for less than $100,000. After we purchase a
suitable boiler, we anticipate a lead-time of six months to complete all
necessary installation and testing activities. The total estimated future costs
associated with our planned acquisition of a boiler and the installation of our
2.5 MW turbine are approximately $500,000. We plan to finance the boiler
acquisition and turbine installation with our currently available capital
resources.





We have
recently purchased a heat recovery steam generator (“HRSG”) that can increase
our generating capacity by approximately 10 MW without increasing our fuel
costs. In order to install the HRSG and put our planned secondary heat recovery
system in service, we will need to buy a suitable steam turbine with a rated
capacity of 10 to 15 MW, complete project engineering, build out the new system
and conduct necessary shakedown testing. We are presently conducting a technical
and mechanical evaluation of a used steam turbine that appears suitable for our
purposes and can be acquired for less than $1 million. Once we purchase a
suitable turbine, we anticipate a lead-time of nine to twelve months to move the
HRSG and steam turbine to our Montgomery County site and complete all necessary
installation and testing activities. The total estimated future costs associated
with our planned acquisition of a steam turbine and the installation of the
secondary heat recovery system are approximately $2.5 million. We do not have
sufficient financial resources to complete our planned acquisition and
installation of the secondary heat recovery system and there can be no assurance
that suitable financing will be available when needed. If we are not able to
attract adequate financing, we may have to delay or abandon our plans to install
the secondary heat recovery system.





In
combination, we believe our existing and proposed facilities will give us
sufficient corporate mass to make credible sales presentations to potential
purchasers of green electricity and users of heat and air conditioning services
(“HACS”). There can be no assurances that future contract prices for green
electricity or HACS will provide sufficient revenue to offset our anticipated
operating expenses.





We
believe there are a large number of existing combined heat and power facilities
in the Houston-Galveston-Brazoria Eight Hour Ozone Non-Attainment
Area  (“HGB”) that are not presently economic because of natural gas
prices. We are evaluating a number of inactive facilities as potential
acquisition targets and actively seeking additional potential acquisitions. Our
business strategy is to acquire or build electric generating facilities that
will be powered by biodiesel fuel. We believe the heat and power generated by
those facilities can then be used to satisfy industrial demand within the HGB
while significantly reducing the air quality footprint of industrial concerns
that may contract to purchase our electricity. In many cases, we believe the
cost savings from industrial plant pollution control upgrades will more than
offset the premium that we will be required to charge for green electricity
generated from alternative fuels.





We
believe our company has a unique market focus, is well positioned
demographically and is operationally efficient. Many retail electric providers
are actively seeking “green energy” for sale to environmentally conscious
residential and commercial customers who are willing to pay more for electricity
produced from renewable energy resources. Our expertise in the field and our
innovative approach to green energy distinguish our company from its
competitors. Nevertheless, there is a possibility that new competitors, who
could be better capitalized than our company, could seize upon our business
model and produce electricity more efficiently, which might allow them to
capture a significant share of our target market.





Until we
are able to negotiate contracts that provide for a significant green energy
premium, we intend to rely on equity financing to cover our current and
anticipated operating losses. We need additional capital and intend to take
advantage of financing opportunities as they arise. There is no assurance that
our current financial resources and the proceeds of any future financing
activities will be sufficient to pay our operating costs until we can negotiate
a significant GEP, or that any GEP we negotiate will be sufficient to offset all
of our operating costs.






-3-


Contractual
obligations





We have
contractual obligations that may affect our financial condition. The following
table summarizes our significant contractual obligations as of the date of this
report:





Total
            
            
            Less
      than
              1 year
            
            
            1
      to 3
              years
            
            
            3
      to 5
              yearsCorporate
      office lease
            
            $
            675,224
            
            
            $
            66,780
            
            
            $
            445,204
            
            
            $
            163,240Generating
      facility leases
            
            
            248,845
            
            
            
            49,525
            
            
            
            152,501
            
            
            
            46,819Employment
      contracts
            
            
            –
            
            
            
            –
            
            
            
            –
            
            
            
            –Total
            
            $
            924,069
            
            
            $
            116,631
            
            
            $
            597,705
            
            
            $
            210,059





The above
rental schedule became effective July 1, 2008 after renegotiating a new lease
and relocating the corporate offices.





Off-balance
Sheet Arrangements





We have
no off-balance sheet arrangements.








ITEM
      3.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





We are a
smaller reporting issuer as defined in Item 10 of Regulation S-K and are not
required to report the quantitative and qualitative measures of market risk
specified in Item 305 of Regulation S-K.








ITEM
      4
            CONTROLS
      AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





We
maintain disclosure controls and procedures that are designed to ensure that the
information we are required to disclose in our reports filed or submitted under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported, within the time periods specified in the Securities and Exchange
Commission’s rules and forms. Our disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
is accumulated and communicated to management, including our chief executive
officer and our chief financial officer, to allow timely decisions regarding
required disclosure.





In
designing and evaluating our disclosure controls and procedures, management
recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of the disclosure controls and procedures are met. Additionally, in
designing disclosure controls and procedures, our management necessarily
was required to apply its judgment in evaluating the cost-benefit relationship
of possible disclosure controls and procedures. While the design of our
disclosure controls and procedures is adequate for our current needs and
anticipated future conditions, there can be no assurance that our current design
will succeed in achieving its stated goals under all possible future conditions.
Accordingly we may be required to modify our disclosure controls and procedures
in the future.





Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures as of June 30, 2008. Based on this evaluation, our Chief Executive
Officer and our Chief Financial Officer concluded the design of our system of
disclosure controls and procedures was not effective as of those dates to ensure
that material information relating to our Company would be made known to them
and that our system of disclosure controls and procedures was operating to
provide a reasonable level of assurance that information required to be
disclosed in our reports would be recorded, processed, summarized and reported
in a timely manner.  These conclusions were based on the
identification of the following material weaknesses:





·
            We
      did not maintain an effective control environment including sufficient
      personnel with the requisite knowledge of Generally Accepted Accounting
      Principles (GAAP) and the rules and regulations established by the SEC and
      appropriate policies and procedures relative to the Company’s accounting
      finance and information technology
functions;








-4-








·
            Inadequate
      controls over the process for the identification and implementation of the
      proper accounting for complex and non-routine transactions, particularly
      as they relate to hedge investments, financing and related party
      transactions;·
            We
      did not properly segregate duties and restrict access to accounting
      systems and data, spreadsheets used for critical calculations were not
      properly controlled, agreements and contracts were not always promptly
      provided to the accounting function, and assets were not always
      properly safeguarded; and·
            We
      do not have a comprehensive set of policies and procedures, related to
      corporate governance, accounting , human resources, and other significant
      matters.




·
            We
      added or are initiating the following additional controls to the Company’s
      internal control over financial reporting, which we expect will improve
      such internal control subsequent to the date of the assessment and earlier
      assessments that also concluded internal controls were not effective.
      These changes are:




·
            We
      have retained a qualified independent consultant to assist our Chief
      Financial Officer and accounting staff in matters relating to the
      identification and implementation of proper accounting procedures and
      provide guidance on financial reporting issues that apply to the
      Company;·
            We
      performed additional analysis and other procedures in order to identify
      weaknesses in order to develop an adequate system of disclosure and
      financial controls,·
            We
      are continuing to restructure certain departmental responsibilities as
      they relate to the financial reporting function,We
      have changed our accounting software package in order to provide stricter
      controls for our accounting
              functions
      and internal controls.·
            We
      have retained a qualified Chief Financial
  Officer.





As a
result of these changes, management believes that all material weaknesses have
been remediated.





Management’s
Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Exchange Act Rule 13a-15(f). Our
system of internal control over financial reporting is designed to provide
reasonable assurance to our management and board of directors regarding the
preparation and fair presentation of published financial statements and the
reliability of financial reporting.  Because of their inherent
limitations, internal controls over financial reporting may not prevent or
detect misstatements. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.





Our
management assessed the effectiveness of our internal control over financial
reporting as of June 30, 2008. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control - Integrated Framework. Based on that
assessment, we believe that as of June 30, 2008, our internal control over
financial reporting is effective.





Beginning
with our Annual Report on Form 10-K for the year ending December 31,
2009, management’s report on internal control over financial reporting must
contain a statement that our independent registered public accountants have
issued an attestation report on management’s assessment of such internal
controls and conclusion on the operating effectiveness of those controls, unless
the SEC extends the compliance date for such auditor
attestation.





Changes
in Internal Control Over Financial Reporting





There was
no change in our internal control over financial reporting that occurred during
our first quarter ended June 30, 2008 that materially affected, or is likely to
materially affect, our internal control over financial reporting.






-5-


Limitations
on the Effectiveness of Internal Controls





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





PART
II – OTHER INFORMATION





ITEM
      1.
            LEGAL
      PROCEEDINGSNONE.








ITEM
      1A.
            RISK
      FACTORS





We are a
smaller reporting issuer as defined in Regulation S-K and are only required to
report material changes from the risk factors previously disclosed in our report
on Form 10-K for the year ended December 31, 2007.





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





NONE





ITEM
      3.
            DEFAULTS
      UPON SENIOR SECURITIESNONEITEM
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERSNONE.ITEM
      5.
            OTHER
      INFORMATIONRobert
      Wilson resigned as Chief Financial Officer (“CFO”) of the Company
      effective as of April 30, 2008.
              
              On
      May 1, 2008, the Company appointed Sam H. Lindsey, Jr. as its CFO, on a
      contract basis, pursuant to a verbal agreement.  Pursuant to
      this agreement, Mr. Lindsey is compensated $125 per hour and bills his
      time by the day or half day.
              
              The
      foregoing description of this agreement does not purport to be a complete
      statement of the Company’s or Mr. Lindsey’s rights under the
      agreement.
              
              Mr.
      Lindsey brings over 35 years of experience in both the public and private
      accounting sectors.  Prior to joining Biofuels Power
      Corporation, Mr. Lindsey served as CFO for a medium size oilfield
      construction company with 150 employees, and $25 million in
      revenue.  Mr. Lindsey has also previously served as CFO for two
      publicly traded companies.  Prior to coming to the private
      sector, Mr. Lindsey was the managing partner of a medium size accounting
      firm providing accounting, auditing, tax, management advisory, and
      litigation support services.  Mr. Lindsey is a 1973 graduate of
      the University of Houston.  Other community services include
      service as Past District Governor for Lions International, and he
      currently serves as Treasurer of the Texas Lions
    Camp.






ITEM
      6.
            EXHIBITS








(a)
            EXHIBITS31.1
            Certification
      of Chief Executive Officer Pursuant to Rule 13a-14(a)31.2
            Certification
      of Chief Financial Officer Pursuant to Rule 13a-14(a)32.1
            Statement
      of Chief Executive Officer Pursuant to Section 1350 of Title 18 of the
      United States Code32.2
            Statement
      of Chief Financial Officer Pursuant to Section1350 of Title 18 of the
      United States Code(b)
            REPORTS
      ON FORM 8-KNONE







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SIGNATURES





Pursuant
to the requirements of the Securities and Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.





BIOFUELS
      POWER CORPORATION








/s/
      Fred O’ConnorFred
      O’Connor, Chief Executive OfficerDated:
      August 19, 2008/s/
      Sam H. Lindsey,
      Jr.Sam
      H. Lindsey, Jr., Chief Financial OfficerDated:
      August 19, 2008
































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