**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-QSB**

| x | **Quarterly                Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of                1934** |
|---|---------------------------------------------------------------------------------------------------------------------|

| |_| | **Transition                Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of                1934** |
|-----|----------------------------------------------------------------------------------------------------------------------|

**U.S.      MICROBICS, INC.**

| **Colorado**                                   | **84-0990371**                                   |
|------------------------------------------------|--------------------------------------------------|
| (State                or other jurisdiction of | (IRS                Employer Identification No.) |
| incorporation                or organization)  |                                             |

| Title                of each class | Name                of each exchange on which registered |
|------------------------------------|----------------------------------------------------------|
| None                               | None                                                     |

----

**PART      1 - FINANCIAL INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS**

**U.S.      MICROBICS, INC., AND SUBSIDIARIES**

**Condensed      Consolidated Balance Sheets**

|                                                                                                       |   | **As                of**     |        | **As                of**         |   |
|------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|----------------------------------|--------|
|                                                                                                       |   | **March                31,** |        | **September                30,** |   |
|                                                                                                       |   | **2007**                     |        | **2006**                         |   |
|                                                                                                       |   | **(Unaudited)**              |        | **(Audited)**                    |   |
| **Current                Assets:**                                                                         |   |                         |        |                             |   |
| Cash                                                                                                       |   | $                            | 16,711      |                             | $      | 341,678 |   |
| Accounts                receivable                                                                         |   |                         | 12,723      |                             |   | 49,994 |   |
| Inventory                                                                                                  |   |                         | 51,656      |                             |   | -- |   |
| Prepaid                expenses and other assets                                                           |   |                         | 200,785     |                             |   | 155,415 |   |
| Total                current assets                                                                        |   |                         | 281,875     |                             |   | 547,087 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| **Property                and equipment, net**                                                             |   |                         |        |                             |   |   |   |
| Office                equipment                                                                            |   |                         | 258,356     |                             |   | 256,783 |   |
| Leasehold                improvements                                                                      |   |                         | 14,376      |                             |   | 14,376 |   |
| Manufacturing                equipment                                                                     |   |                         | 240,500     |                             |   | 231,735 |   |
| Production                and transportation equipment                                                     |   |                         | 23,351      |                             |   | 23,351 |   |
|                                                                                                       |   |                         | 536,583     |                             |   | 526,245 |   |
| Less:                accumulated depreciation                                                              |   |                         | (400,966    | )                                |   | (373,631 | ) |
|                                                                                                       |   |                         | 135,617     |                             |   | 152,614 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| **Other                Assets**                                                                            |   |                         | 30,310      |                             |   | 30,310 |   |
| Total                assets                                                                                |   | $                            | 447,802     |                             | $      | 730,011 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| **Liabilities                and deficiency in Stockholders' Equity**                                      |   |                         |        |                             |   |   |   |
| **Current                Liabilities:**                                                                    |   |                         |        |                             |   |   |   |
| Line                of credit                                                                              |   | $                            | 944,650     |                             | $      | 345,000 |   |
| Accounts                payable and accrued expenses                                                       |   |                         | 1,672,448   |                             |   | 1,591,567 |   |
| Note                payable                                                                                |   |                         | 110,000     |                             |   | 150,000 |   |
| Notes                payable to related parties, current portion                                           |   |                         | 92,721      |                             |   | 111,829 |   |
| Total                current liabilities                                                                   |   |                         | 2,819,819   |                             |   | 2,198,396 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| Total                liabilities                                                                           |   |                         | 2,819,819   |                             |   | 2,198,396 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| **Minority                Interest**                                                                       |   |                         | 6,782,211   |                             |   | 6,117,872 |   |
|                                                                                                       |   |                         |        |                             |   |   |   |
| **Deficiency                in Stockholders' Equity:**                                                     |   |                         |        |                             |   |   |   |
| Convertible                preferred stock, $.10 par value; 20,000,000 shares                authorized:   |   |                         |        |                             |   |   |   |
| Series                II; authorized 500,000 shares; 5,875, and 5,875 issued                               |   |                         |        |                             |   |   |   |
| and                outstanding as of March 31, 2007 and September 30, 2006;                                |   |                         |        |                             |   |   |   |
| aggregate                liquidation preference of $5,875                                                  |   |                         | 588         |                             |   | 588 |   |
| Series                B; authorized 500,000 shares; 5,272 and 5,272 shares issued                and       |   |                         |        |                             |   |   |   |
| outstanding                as of March 31, 2007 and September 30, 2006;                                    |   |                         |        |                             |   |   |   |
| aggregate                liquidation preference of $5,272                                                  |   |                         | 527         |                             |   | 527 |   |
| Series                C; authorized 50,000 shares; 33,339 and 33,339 issued and                outstanding |   |                         |        |                             |   |   |   |
| as                of March 31, 2007 and September 30, 2006; aggregate                                      |   |                         |        |                             |   |   |   |
| liquidation                preference of $3,333,900                                                        |   |                         | 3,334       |                             |   | 3,334 |   |
| Series                D; authorized 50,000 shares; 43,330 and 43,330 shares issued                and      |   |                         |        |                             |   |   |   |
| outstanding                as of March 31, 2007 and September 30, 2006; no                                 |   |                         |        |                             |   |   |   |
| liquidation                preference                                                                      |   |                         | 4,330       |                             |   | 4,330 |   |
| Series                E; authorized 50,000 shares; -0- shares issued and outstanding                as     |   |                         |        |                             |   |   |   |
| of                March 31, 2007 and September 30, 2006,                                                   |   |                         |        |                             |   |   |   |
| (aggregate                liquidation preference of $-0-)                                                  |   |                         |        |                             |   |   |   |
| Common                stock; $.0001 par value; authorized 500,000,000 shares;                              |   |                         |        |                             |   |   |   |
| 423,948,235                and 404,630,489 shares issued and outstanding as of                             |   |                         |        |                             |   |   |   |
| March                31, 2007 and September 30, 2006, respectively                                         |   |                         | 42,395      |                             |   | 40,463 |   |
| Additional                paid-in capital                                                                  |   |                         | 25,432,442  |                             |   | 25,315,763 |   |
| Treasury                stock, at cost                                                                     |   |                         | (117,400    | )                                |   | (117,400 | ) |
| Stock                subscriptions receivables                                                             |   |                         | (243,502    | )                                |   | (282,700 | ) |
| Deferred                equity issuance costs                                                              |   |                         | (668,500    | )                                |   | (668,500 | ) |
| Deferred                financing costs                                                                    |   |                         | (471,540    | )                                |   | (471,540 | ) |
| Accumulated                deficit                                                                         |   |                         | (33,136,902 | )                                |   | (31,411,122 | ) |
| Total                deficiency in stockholders' equity                                                    |   |                         | (9,154,229  | )                                |   | (7,586,257 | ) |
| Total                liabilities and deficiency in stockholders' equity                                    |   | $                            | 447,802     |                             | $      | 730,011 |   |

----

**U.S.      MICROBICS, INC., AND SUBSIDIARIES**

**Condensed      Consolidated Statements of Operations **

|                                                          |   | For                the Six MonthsEnded                March 31, |        | For                the Three MonthsEnded                March 31, |   |
|---------------------------------------------------------------|--------|-----------------------------------------------------------------|-------------|-------------------------------------------------------------------|--------|
|                                                          |   | 2007                                                            |        | 2006                                                              |   | 2007 |   | 2006 |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |
| Revenues                                                      |   | $                                                               | 174,289     |                                                              | $      | 371,036 |   | $ | 54,287 |   | $ | 306,320 |   |
| Cost                of revenues                               |   |                                                            | 44,496      |                                                              |   | 244,400 |   |   | 26,432 |   |   | 160,640 |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Gross                profit                                   |   |                                                            | 129,793     |                                                              |   | 126,636 |   |   | 27,855 |   |   | 145,680 |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative expenses   |   |                                                            | 1,973,916   |                                                              |   | 1,828,288 |   |   | 1,053,793 |   |   | 912,264 |   |
| Depreciation                and amortization                  |   |                                                            | 27,334      |                                                              |   | 27,681 |   |   | 13,162 |   |   | 13,709 |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Loss                from operations                           |   |                                                            | (1,871,457  | )                                                                 |   | (1,729,333 | ) |   | (1,039,100 | ) |   | (780,293 | ) |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Other                income (expense):                        |   |                                                            |             |                                                              |   |   |   |   |   |   |   |   |   |
| Interest                income                                |   |                                                            | 901         |                                                              |   | 467 |   |   | 67 |   |   | 229 |   |
| Interest                expense                               |   |                                                            | (50,444     | )                                                                 |   | (40,479 | ) |   | (15,758 | ) |   | (21,856 | ) |
| Realized                gain (loss) on sale of securities     |   |                                                            | --          |                                                              |   | 30,525 |   |   | -- |   |   | -- |   |
| Loss                before minority interest and income taxes |   |                                                            | (1,921,000  | )                                                                 |   | (1,738,820 | ) |   | (1,054,791 | ) |   | (801,920 | ) |
| Minority                interest                              |   |                                                            | 195,221     |                                                              |   | 129,191 |   |   | 142,283 |   |   | 79,690 |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Net                Loss Before Income Taxes                   |   |                                                            | (1,725,779  | )                                                                 |   | (1,609,629 | ) |   | (912,508 | ) |   | (722,230 | ) |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Income                tax expenses                            |   |                                                            | --          |                                                              |   | -- |   |   | -- |   |   | -- |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Net                loss                                       |   | $                                                               | (1,725,779  | )                                                                 | $      | (1,609,629 | ) | $ | (912,508 | ) | $ | (722,230 | ) |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Net                loss per common share (basic and diluted)  |   | $                                                               | (0.00       | )                                                                 | $      | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
|                                                          |   |                                                            |        |                                                              |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding     |   |                                                            | 414,649,693 |                                                              |   | 277,166,578 |   |   | 421,612,017 |   |   | 293,280,139 |   |

----

**U.S.      MICROBICS, INC., AND SUBSIDIARIES**

**Condensed      Consolidated Statements of Cash Flows**

|                                                                                                                   |   | **For                the Six Months Ended****March                31,** |       |
|------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|------------|
|                                                                                                                   |   | **2007**                                                                |       | **2006** |   |
|                                                                                                                   |   |                                                                    |       |   |   |
| Net                Cash Used in Operating Activities                                                                   |   | $                                                                       | (1,262,383 | ) | $ | (1,029,090 | ) |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Net                Cash Used in Investing Activities                                                                   |   |                                                                    | (10,337    | ) |   | (57,030 | ) |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Net                Cash Provided by Financing Activities                                                               |   |                                                                    | 947,753    |   |   | 1,053,798 |   |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Net                Decrease in Cash                                                                                    |   |                                                                    | (324,967   | ) |   | (32,322 | ) |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Cash                at Beginning of Period                                                                             |   |                                                                    | 341,678    |   |   | 108,498 |   |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Cash                at End of Period                                                                                   |   | $                                                                       | 16,711     |   | $ | 76,176 |   |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Supplemental                disclosures of non-cash investing and financing                activities:                 |   |                                                                    |            |   |   |  |   |
|                                                                                                                   |   |                                                                    |            |   |   |  |   |
| Common                stock issued in exchange for services                                                            |   | $                                                                       | 46,500     |   | $ | 75,000 |   |
| Common                stock issued in exchange for compensation                                                        |   | $                                                                       | --         |   | $ | 20,000 |   |
| Common                stock issued for accounts payable                                                                |   | $                                                                       | 60,000     |   | $ | 96,648 |   |
| Common                stock issued for accrued vacation pay                                                            |   | $                                                                       | --         |   | $ | 3,342 |   |
| Common                stock issued for accrued note payable interest                                                   |   | $                                                                       | --         |   | $ | 15,000 |   |
| Common                stock issued for employee stock options charged to                operations                     |   | $                                                                       | 3,489      |   | $ | 164,459 |   |
| Common                stock issued for employee stock options for subscription                receivable               |   | $                                                                       | 19,772     |   | $ | -- |   |
| Common                stock issued for accrued payroll                                                                 |   | $                                                                       | 60,000     |   | $ | -- |   |
| Common                stock cancelled for accrued payroll                                                              |   | $                                                                       | (87,820    | ) | $ | -- |   |
| Common                stock cancelled for stock subscription receivable                                                |   | $                                                                       | (50,000    | ) | $ | -- |   |
| Black-Scholes                expense for common stock options issued                                                   |   | $                                                                       | 66,670     |   | $ | -- |   |
| Common                stock issued by subsidiary in exchange for services                                              |   | $                                                                       | 243,064    |   | $ | 9,600 |   |
| Common                stock issued by subsidiary in exchange for compensation                                          |   | $                                                                       | --         |   | $ | 10,000 |   |
| Common                stock issued by subsidiary for accounts payable                                                  |   | $                                                                       | 96,189     |   | $ | 47,752 |   |
| Common                stock issued by subsidiary for accrued payroll                                                   |   | $                                                                       | 17,500     |   | $ | -- |   |
| Common                stock issued in settlement of notes payable by subsidiary                                        |   | $                                                                       | 62,500     |   | $ | 85,000 |   |
| Common                stock issued by subsidiary for stock subscription                receivable                      |   | $                                                                       | 50,000     |   | $ | -- |   |
| Common                stock issued by subsidiary for accrued interest                                                  |   | $                                                                       | 14,670     |   | $ | -- |   |
| Common                stock issued by subsidiary for a finance fee                                                     |   | $                                                                       | 112,500    |   | $ | -- |   |
| Common                stock issued by subsidiary for employee stock options charged to                operations       |   | $                                                                       | 73,584     |   | $ | -- |   |
| Common                stock issued by subsidiary for employee stock options for subscription                receivable |   | $                                                                       | 328,801    |   | $ | -- |   |
| Preferred                stock issued by subsidiary for licensing agreement                                            |   | $                                                                       | --         |   | $ | 150,000 |   |
| Preferred                stock issued by subsidiary for consulting agreement                                           |   | $                                                                       | --         |   | $ | 360,000 |   |
| Cash                paid for:                                                                                          |   |                                                                    |            |   |   |  |   |
| Interest                                                                                                               |   | $                                                                       | --         |   | $ | -- |   |
| Income                taxes                                                                                            |   | $                                                                       | --         |   | $ | -- |   |
| Dividends                                                                                                              |   | $                                                                       | --         |   | $ | -- |   |

----

**U.S.      MICROBICS INC., AND SUBSIDIARIES**

**Notes      To Condensed Consolidated Financial Statements**

**Six      Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

----

**U.S.        MICROBICS INC., AND SUBSIDIARIES**

**Notes        To Condensed Consolidated Financial Statements**

**Six        Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE        A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|                    |      | Options                and Warrants |   |                        |   | Options                and Warrants |
|-------------------------|-----------|-------------------------------------|--------|-----------------------------|--------|-------------------------------------|
|                    |      |                                |   | Weighted                    |   |                                |   |   |   |   |
|                    |      |                                |   | Average                     |   | Weighted                            |   |   |   | Weighted |
| Range                of |      |                                |   | Remaining              |   | Average                             |   |   |   | Average |
| Exercise                |      | Number                              |   |  Contractual           |   | Exercise                            |   | Number |   | Exercise |
| Prices                  |      | Outstanding                         |   | Life                (Years) |   | Price                               |   | Exercisable |   | Price |
| $                       | 0.01      |                                |   | 12,500,000                  |   |                                | 4.70 |   | $ | 0.01 |   |   | 12,500,000 |   | $ | 0.01 |
|                    | 0.03      |                                |   | 6,000,000                   |   |                                | 2.18 |   |   | 0.03 |   |   | 6,000,000 |   |   | 0.03 |
|                    |      |                                |   |                        |   |                                |   |   |   |   |   |   |   |   |   |   |
| $                       | 0.01-0.03 |                                |   | 18,500,000                  |   |                                | 3.88 |   | $ | 0.02 |   |   | 18,500,000 |   | $ | 0.02 |

----

**U.S.        MICROBICS INC., AND SUBSIDIARIES**

**Notes        To Condensed Consolidated Financial Statements**

**Six        Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**

|                                      |   |   |       | Weighted                      |   |
|-------------------------------------------|--------|--------|------------|-------------------------------|--------|
|                                      |   |   |       | Average                       |   |
|                                      |   | Shares |       | Exercise                Price |   |
| Balance,                October 1, 2006   |   |   | 6,500,000  |                          |   | 0.03 |   |
| Granted                                   |   |   | 4,687,500  |                          |   | 0.01 |   |
| Exercised                                 |   |   | --         |                          |   | -- |   |
| Expired/Canceled                          |   |   | --         |                          |   | -- |   |
| Balance,                December 31, 2006 |   |   | 11,187,500 |                          | $      | 0.02 |   |
| Granted                                   |   |   | 11,284,284 |                          |   | 0.01 |   |
| Exercised                                 |   |   | (3,471,784 | )                             |   | (0.01 | ) |
| Expired/Canceled                          |   |   | (500,000   | )                             |   | (0.02 | ) |
| Balance,                March 31, 2007    |   |   | 18,500,000 |                          | $      | 0.02 |   |

----

**U.S.        MICROBICS INC., AND SUBSIDIARIES**

**Notes        To Condensed Consolidated Financial Statements**

**Six        Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      B - NOTES PAYABLE**

**NOTE      C - INVENTORIES**

| Raw                materials    |   | $      | --     |   |
|---------------------------------|--------|--------|--------|--------|
| Work                in progress |   |   | 51,656 |   |
|                            |   |   |   |   |
|                            |   |   | 51,656 |   |

----

**U.S.      MICROBICS INC., AND SUBSIDIARIES**

**Notes      To Condensed Consolidated Financial Statements**

**Six      Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      D - CAPITAL STOCK**

----

**U.S.      MICROBICS INC., AND SUBSIDIARIES**

**Notes      To Condensed Consolidated Financial Statements**

**Six      Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      E - MINORITY INTEREST**

|                                                          |   | Amount |    |
|---------------------------------------------------------------|--------|--------|---------|
|                                                          |   |   |    |
| USM                Capital Group, Inc.                        |   | $      | 26      |   |
| Sub                Surface Waste Management of Delaware, Inc. |   |   | 195,196 |   |
| Sol-Tech                Corporation                           |   |   | (1      | ) |
| Bio-Con                Microbes                               |   |   | --      |   |
| Totals                                                        |   | $      | 195,221 |   |

**NOTE      F - COMMITMENTS AND CONTINGENCIES**

----

**U.S.        MICROBICS INC., AND SUBSIDIARIES**

**Notes        To Condensed Consolidated Financial Statements**

**Six        Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE        G - SEGMENT INFORMATION**

|   | · | Management                services and planning      |
|--------|--------|------------------------------------------------------|
|   | · | Becoming                a publicly reporting company |
|   | · | Becoming                a publicly trading company   |
|   | · | Capital                financing                     |
|   | · | Aftermarket                support                   |
|   | · | Investor                Relations                    |
|   | · | Corporate                governance                  |
|   | · | Administrative                services               |
|   | · | CEO                Training                          |

----

**U.S.        MICROBICS INC., AND SUBSIDIARIES**

**Notes        To Condensed Consolidated Financial Statements**

**Six        Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      G - SEGMENT INFORMATION (continued)**

|                                                    |   | **For                the Six Months Ended****March                31,** |       |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------|------------|
|                                                    |   | 2007                                                                    |       | 2006 |   |
| Net                Sales to External Customers:         |   |                                                                    |       |   |   |
| Consulting                and Financial Services        |   | $                                                                       | --         |   | $ | -- |   |
| Engineering                Services Corporate           |   |                                                                    | 174,289    |   |   | 367,420 |   |
| Corporate                                               |   |                                                                    | --         |   |   | 3,616 |   |
| Total                Sales to External Customers        |   | $                                                                       | 174,289    |   | $ | 371,036 |   |
|                                                    |   |                                                                    |       |   |   |   |   |
| Depreciation                Expense:                    |   |                                                                    |       |   |   |   |   |
| Consulting                and Financial Services        |   | $                                                                       | --         |   | $ | -- |   |
| Engineering                Services                     |   |                                                                    | 13,885     |   |   | 9,527 |   |
| Corporate                                               |   |                                                                    | 13,449     |   |   | 18,154 |   |
| Total                Depreciation Expense               |   | $                                                                       | 27,334     |   | $ | 27,681 |   |
|                                                    |   |                                                                    |       |   |   |   |   |
| General                and Administrative Expense:      |   |                                                                    |       |   |   |   |   |
| Consulting                and Financial Services        |   | $                                                                       | 169        |   | $ | 50 |   |
| Engineering                Services                     |   |                                                                    | 1,266,868  |   |   | 1,216,411 |   |
| Corporate                                               |   |                                                                    | 706,879    |   |   | 611,827 |   |
| Total                General and Administrative Expense |   | $                                                                       | 1,973,916  |   | $ | 1,828,288 |   |
|                                                    |   |                                                                    |       |   |   |   |   |
| Capital                Expenditures:                    |   |                                                                    |       |   |   |   |   |
| Consulting                and Financial Services        |   | $                                                                       | --         |   | $ | -- |   |
| Engineering                Services                     |   |                                                                    | 8,764      |   |   | 57,030 |   |
| Corporate                                               |   |                                                                    | 1,573      |   |   | -- |   |
| Total                Capital Expenditures               |   | $                                                                       | 10,337     |   | $ | 57,030 |   |
|                                                    |   |                                                                    |       |   |   |   |   |
| Operating                (Losses):                      |   |                                                                    |       |   |   |   |   |
| Consulting                and Financial Services        |   | $                                                                       | (169       | ) | $ | (50 | ) |
| Engineering                Services                     |   |                                                                    | (1,153,480 | ) |   | (1,110,163 | ) |
| Corporate                                               |   |                                                                    | (717,808   | ) |   | (619,120 | ) |
| Total                Segment Operating Losses           |   | $                                                                       | (1,871,457 | ) | $ | (1,729,333 | ) |
|                                                    |   |                                                                    |       |   |   |   |   |
| Segment                Assets:                          |   |                                                                    |       |   |   |   |   |
| Consulting                and Financial Services        |   | $                                                                       | 109        |   | $ | 277 |   |
| Engineering                Services - Net               |   | $                                                                       | 335,282    |   | $ | 580,666 |   |
| Corporate                                               |   | $                                                                       | 112,411    |   | $ | 37,334 |   |
| Total                Segment Assets                     |   | $                                                                       | 447,802    |   | $ | 618,277 |   |

----

**U.S.      MICROBICS INC., AND SUBSIDIARIES**

**Notes      To Condensed Consolidated Financial Statements**

**Six      Months Ended March 31, 2007 And 2006**

**(Unaudited)**

**NOTE      G - SEGMENT INFORMATION (continued)**

|                                                 |   | March                31, |    | March                31, |   |
|------------------------------------------------------|--------|--------------------------|---------|--------------------------|--------|
|                                                 |   | 2007                     |    | 2006                     |   |
| **Net                Sales To External Customers:**  |   |                     |    |                     |   |
| United                States                         |   | $                        | 84,644  |                     | $      | 17,084 |   |
| Mexico                                               |   | $                        | 89,645  |                     | $      | 353,952 |   |
| **Total                Sales To External Customers** |   | $                        | 174,289 |                     | $      | 371,036 |   |
|                                                 |   |                     |         |                     |   |  |   |
| **Assets:**                                          |   |                     |         |                     |   |  |   |
| United                States                         |   | $                        | 333,404 |                     | $      | 448,907 |   |
| Mexico                                               |   | $                        | 114,398 |                     | $      | 169,370 |   |
| **Total                Assets**                      |   | $                        | 447,802 |                     | $      | 618,277 |   |

----

**PART      I**

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS      OF      OPERATIONS**

*This      report contains forward-looking statements within the meaning of Section 27a      of      the Securities Act of 1933, as amended, and Section 21e of the Securities      Exchange Act of 1934, as amended. All forward-looking statements are inherently      uncertain as they are based on current expectations and assumptions concerning      future events or future performance of the company. Readers are cautioned not      to      place undue reliance on these forward-looking statements, which are only      predictions and speak only as of the date hereof. Forward-looking statements      usually contain the words "estimate," "anticipate," "believe," "expect," or      similar expressions, and are subject to numerous known and unknown risks and      uncertainties. In evaluating such statements, prospective investors should      carefully review various risks and uncertainties identified below, as well      as      the matters set forth in the Company's Annual Report on 10-KSB for the year      ended September 30, 2003 and its other SEC filings. These risks and      uncertainties could cause the company's actual results to differ materially      from      those indicated in the forward-looking statements. The Company undertakes no      obligation to update or publicly announce revisions to any forward-looking      statements to reflect future events or developments.*

**The      Company**

----

**RESULTS      OF OPERATIONS**

**For      the six months and three months ended March 31, 2007 with six months and three      months ended March 31, 2006**

----

**Liquidity      And Capital Resources.**

**Risks      And Uncertainties**

----

**ITEM      3. CONTROLS AND PROCEDURES**

**PART      II - OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS.**

**ITEM      2. CHANGES IN UNREGISTERED SECURITIES AND USE OF PROCEEDS.**

----

**Issuer      Purchases Of Equity Securities**

| Period    |   | (a)Total                Number ofShares                (orUnits)Purchased) |   | (b)Average                PricePaid                per Share(or                Unit) |   | (c)Total                Number                ofShares                (orUnits)Purchased                asPart                ofPubliclyAnnounced                Plansor                Programs (1) |   | (d)MaximumNumber                (orApproximateDollar                Value)that                May Yet BePurchased                Underthe                Plans orPrograms                (1) |   |
|-----------|--------|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| 10/01/06- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 10/31/06  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |        |                                                                                 |   |                                                                                                                                                                                                      |   |                                                                                                                                                                                         |        |   |   |  |   |
| 11/01/06- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 11/30/06  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |        |                                                                                 |   |                                                                                                                                                                                                      |   |                                                                                                                                                                                         |        |   |   |  |   |
| 12/01/06- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 12/31/06  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |        |                                                                                 |   |                                                                                                                                                                                                      |   |                                                                                                                                                                                         |        |   |   |  |   |
| 01/01/07- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 01/31/07  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |        |                                                                                 |   |                                                                                                                                                                                                      |   |                                                                                                                                                                                         |        |   |   |  |   |
| 02/01/07- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 02/28/07  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |        |                                                                                 |   |                                                                                                                                                                                                      |   |                                                                                                                                                                                         |        |   |   |  |   |
| 03/01/07- |   |                                                                       | --     |                                                                                 |   | --                                                                                                                                                                                                   |   |                                                                                                                                                                                         | --     |   |   | -- |   |
| 03/31/07  |   |                                                                       | 0      |                                                                                 | $      | 0                                                                                                                                                                                                    |   |                                                                                                                                                                                         | 0      |   |   | 0 |   |
|      |   |                                                                       |   |                                                                                 |   |                                                                                                                                                                                                 |   |                                                                                                                                                                                         |   |   |   |   |   |
|      |   |                                                                       |   |                                                                                 |   |                                                                                                                                                                                                 |   |                                                                                                                                                                                         |   |   |   |   |   |

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

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

----

**ITEM      5. OTHER INFORMATION.**

----

**ITEM      6. EXHIBITS**

| (a)    | Exhibits. |                                                                                                                                                                                                                   |
|--------|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                   |
|   | 3.1       | Articles                of Incorporation, as amended.                                                                                                                                                                  |
|   |      |                                                                                                                                                                                                                   |
|   | 3.2       | Bylaws,                as amended.                                                                                                                                                                                     |
|   |      |                                                                                                                                                                                                                   |
|   | 10.1      | Lease                Agreement, dated as of July 14, 1998, by and among the Company and                each of                Ridgecrest Properties, R and B Properties and Hindry West                Development.(1) |
|   |      |                                                                                                                                                                                                                   |
|   | 10.2      | Employment                Agreement, effective as of October 1, 1998, between Robert C. Brehm                and                the Registrant.(1)                                                                     |
|   |      |                                                                                                                                                                                                                   |
|   | 10.3      | Employment                Agreement, effective as of October 1, 1998, between Mery C. Robinson                and                the Registrant.(1)                                                                    |
|   |      |                                                                                                                                                                                                                   |
|   | 10.4      | Stock                for Stock Acquisition Agreement, effective as of August 31, 1997,                among                XyclonyX, Mery C. Robinson and the Registrant.(1)                                           |
|   |      |                                                                                                                                                                                                                   |
|   | 10.5      | Technology                License Agreement, effective as of March 1, 1998, between XyclonyX                and                West Coast Fermentation Center.(1)                                                      |
|   |      |                                                                                                                                                                                                                   |
|   | 10.6      | Technology                License Agreement, effective as of March 1, 1998, between XyclonyX                and                Sub-Surface Waste Management, Inc. (1)                                                  |
|   |      |                                                                                                                                                                                                                   |
|   | 10.7      | Technology                License Agreement, effective as of August 21, 1997, among XyclonyX                and                Mery C. Robinson, Dominic J. Colasito and Alvin J. Smith.                (1)            |
|   |      |                                                                                                                                                                                                                   |
|   | 10.8      | Technology                License Agreement, effective as of March 1, 1998, between XyclonyX                and                Bio-Con Microbes, Inc.(1)                                                               |
|   |      |                                                                                                                                                                                                                   |
|   | 10.9      | Technology                License Agreement, effective as of March 1, 1998, between XyclonyX                and                Sol-Tech Corporation.(1)                                                                |
|   |      |                                                                                                                                                                                                                   |
|   | 10.10     | Product                Line License Agreement effective May 24, 1999, between Sub-Surface                Waste                Management, Inc. and Builders Referral, Inc.(2)                                          |
|   |      |                                                                                                                                                                                                                   |
|   | 21        | Subsidiaries                of the Registrant.(1)                                                                                                                                                                      |
|   |      |                                                                                                                                                                                                                   |
|   | 31.1      | Certification                of Robert C. Brehm pursuant to 18 U.S.C. Section 1350, as adopted                to                section 302 of the Sarbanes-Oxley Act of 2002.                                         |
|   |      |                                                                                                                                                                                                                   |
|   | 31.2      | Certification                of Conrad Nagel pursuant to 18 U.S.C. Section 1350, as adopted to                section                302 of the Sarbanes-Oxley Act of 2002.                                            |
|   |      |                                                                                                                                                                                                                   |
|   | 32.1      | Certification                of Robert C. Brehm pursuant to 18 U.S.C. Section 1350, as adopted                to                section 906 of the Sarbanes-Oxley Act of 2002.                                         |
|   |      |                                                                                                                                                                                                                   |
|   | 32.2      | Certification                of Conrad Nagel pursuant to 18 U.S.C. Section 1350, as adopted to                section                906 of the Sarbanes-Oxley Act of                2002.                             |

----

**SIGNATURES**

|                                         |                                                                                 |                                    |
|----------------------------------------------|--------------------------------------------------------------------------------------|-----------------------------------------|
|                                         | **U.S.                MICROBICS, INC.**                                              |
|                                    |                                                                            |                               |
| Date: May                21, 2007  | By:                                                                        | /s/ Robert                C. Brehm |
|                                         | Robert                C. Brehm, President and Chief                Executive Officer |

|                                         |                                                 |                                 |
|----------------------------------------------|------------------------------------------------------|--------------------------------------|
|                                         | **COMPANY                NAME CORPORATION**          |
|                                    |                                            |                            |
| Date: May                21, 2007  | By:                                        | /s/ Conrad                Nagel |
|                                         | Conrad                Nagel, Chief Financial Officer |