----

----

**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** |
|---|-------------------------------------------------------------------------------------------------------------------------|

| o | **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**

**Consolidated        Condensed Balance Sheets**

|                                                                                                                                                                                                                                                                                |   | **As                    Of**        |        | **As                    Of**         |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|-------------|--------------------------------------|--------|
|                                                                                                                                                                                                                                                                                |   | **December                    31,** |        | **September                    30,** |   |
|                                                                                                                                                                                                                                                                                |   | **2006**                            |        | **2006**                             |   |
|                                                                                                                                                                                                                                                                                |   | **(Unaudited)**                     |        | **(Audited)**                        |   |
| **Current                    Assets:**                                                                                                                                                                                                                                              |   |                                |        |                                 |   |   |   |
| Cash                                                                                                                                                                                                                                                                                |   | $                                   | 9,318       |                                 | $      | 341,678 |   |
| Accounts                    receivable                                                                                                                                                                                                                                              |   |                                | 32,593      |                                 |   | 49,994 |   |
| Inventory                                                                                                                                                                                                                                                                           |   |                                | 49,715      |                                 |   | -- |   |
| Prepaid                    expenses and other assets                                                                                                                                                                                                                                |   |                                | 125,499     |                                 |   | 155,415 |   |
| Total                    current assets                                                                                                                                                                                                                                             |   |                                | 217,125     |                                 |   | 547,087 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| **Property                    And Equipment, Net**                                                                                                                                                                                                                                  |   |                                |        |                                 |   |   |   |
| Office                    equipment                                                                                                                                                                                                                                                 |   |                                | 258,407     |                                 |   | 256,783 |   |
| Leasehold                    improvements                                                                                                                                                                                                                                           |   |                                | 14,376      |                                 |   | 14,376 |   |
| Manufacturing                    equipment                                                                                                                                                                                                                                          |   |                                | 240,499     |                                 |   | 231,735 |   |
| Production                    and transportation equipment                                                                                                                                                                                                                          |   |                                | 23,351      |                                 |   | 23,351 |   |
|                                                                                                                                                                                                                                                                                |   |                                | 536,633     |                                 |   | 526,245 |   |
| Less:                    accumulated depreciation                                                                                                                                                                                                                                   |   |                                | (387,803    | )                                    |   | (373,631 | ) |
|                                                                                                                                                                                                                                                                                |   |                                | 148,830     |                                 |   | 152,614 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| **Other                    Assets**                                                                                                                                                                                                                                                 |   |                                | 30,310      |                                 |   | 30,310 |   |
| Total                    assets                                                                                                                                                                                                                                                     |   | $                                   | 396,265     |                                 | $      | 730,011 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| **Liabilities                    And Deficiency In Stockholders' Equity**                                                                                                                                                                                                           |   |                                |        |                                 |   |   |   |
| **Current                    Liabilities:**                                                                                                                                                                                                                                         |   |                                |        |                                 |   |   |   |
| Line                    of credit                                                                                                                                                                                                                                                   |   |                                | 492,599     |                                 |   | 345,000 |   |
| Accounts                    payable and accrued expenses                                                                                                                                                                                                                            |   |                                | 1,710,073   |                                 |   | 1,591,567 |   |
| Note                    payable                                                                                                                                                                                                                                                     |   |                                | 150,000     |                                 |   | 150,000 |   |
| Notes                    payable to related parties, current portion                                                                                                                                                                                                                |   |                                | 118,525     |                                 |   | 111,829 |   |
| Total                    current liabilities                                                                                                                                                                                                                                        |   |                                | 2,471,197   |                                 |   | 2,198,396 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| Total                    liabilities                                                                                                                                                                                                                                                |   |                                | 2,471,197   |                                 |   | 2,198,396 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| **Minority                    Interest**                                                                                                                                                                                                                                            |   |                                | 6,135,634   |                                 |   | 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 December 31, 2006 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 December 31, 2006 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 December 31, 2006 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 December 31, 2006 and September 30, 2006;                      no liquidation                      preference              |   |                                | 4,330       |                                 |   | 4,330 |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| Series                    E; authorized 50,000 shares; -0- shares issued and outstanding                    as of                    December 31, 2006 and September 30, 2006, (aggregate liquidation                    preference of $-0-)                                        |   |                                |        |                                 |   |   |   |
|                                                                                                                                                                                                                                                                                |   |                                |        |                                 |   |   |   |
| Common                    stock; $.0001 par value; authorized 500,000,000 shares;407,026,451                    and                    404,630,489 shares issued and outstanding as of December 31,                    2006 and                    September 30, 2006, respectively |   |                                | 40,703      |                                 |   | 40,463 |   |
| Additional                    paid-in capital                                                                                                                                                                                                                                       |   |                                | 25,359,510  |                                 |   | 25,315,763 |   |
| Treasury                    stock, at cost                                                                                                                                                                                                                                          |   |                                | (117,400    | )                                    |   | (117,400 | ) |
| Stock                    subscriptions receivables                                                                                                                                                                                                                                  |   |                                | (137,725    | )                                    |   | (282,700 | ) |
| Deferred                    equity issuance costs                                                                                                                                                                                                                                   |   |                                | (668,500    | )                                    |   | (668,500 | ) |
| Deferred                    financing costs                                                                                                                                                                                                                                         |   |                                | (471,540    | )                                    |   | (471,540 | ) |
| Accumulated                    deficit                                                                                                                                                                                                                                              |   |                                | (32,224,393 | )                                    |   | (31,411,122 | ) |
| Total                    deficiency in stockholders' equity                                                                                                                                                                                                                         |   |                                | (8,210,566  | )                                    |   | (7,586,257 | ) |
| Total                    liabilities and deficiency in stockholders' equity                                                                                                                                                                                                         |   | $                                   | 396,265     |                                 | $      | 730,011 |   |

----

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

**Consolidated        Condensed Statements Of Operations **

|                                                            |   | For                  the Three Months EndedDecember                  31, |        |
|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------|-------------|
|                                                            |   | 2006                                                                     |        | 2005 |   |
| Revenues                                                        |   | $                                                                        | 120,002     |   |   | 64,716 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Cost                  of revenues                               |   |                                                                     | 18,064      |   |   | 83,760 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Gross                  profit (loss)                            |   |                                                                     | 101,938     |   |   | (19,044 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Selling,                  general and administrative expenses   |   |                                                                     | 920,123     |   |   | 916,024 |   |
| Depreciation                                                    |   |                                                                     | 14,172      |   |   | 13,972 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Loss                  from operations                           |   |                                                                     | (832,357    | ) |   | (949,040 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Other                  income (expense):                        |   |                                                                     |        |   |   |   |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Interest                  Income                                |   |                                                                     | 834         |   |   | 238 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Interest                  expense                               |   |                                                                     | (34,686     | ) |   | (18,623 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Realized                  gain (loss) on sale of securities     |   |                                                                     | --          |   |   | 30,525 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Loss                  before minority interest and income taxes |   |                                                                     | (866,209    | ) |   | (                  936,900 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Minority                  interest                              |   |                                                                     | 52,938      |   |   | 49,501 |   |
|                                                            |   |                                                                     |        |   |   |   |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Net                  loss before income taxes                   |   |                                                                     | (813,271    | ) |   | (887,399 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Income                  taxes                                   |   |                                                                     | --          |   |   | -- |   |
|                                                            |   |                                                                     |        |   |   |   |   |
| Net                  Loss                                       |   | $                                                                        | (813,271    | ) | $ | (887,399 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Net                  loss per common share (basic and diluted)  |   | $                                                                        | (0.00       | ) | $ | (0.00 | ) |
|                                                            |   |                                                                     |        |   |   |   |   |
| Weighted                  average common shares outstanding     |   |                                                                     | 405,429,143 |   |   | 261,053,017 |   |

----

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

**Consolidated        Condensed Statements Of Cash Flows**

|                                                                                                       |   | **For                  the Three Months Ended****December                  31,** |     |
|------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|----------|
|                                                                                                       |   | **2006**                                                                         |     | **2005** |   |
|                                                                                                       |   |                                                                             |     |   |   |
| Net                  Cash Used in Operating Activities                                                     |   | $                                                                                | (624,182 | ) | $ | (216,127 | ) |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Net                  Cash Used in Investing Activities                                                     |   |                                                                             | (10,388  | ) |   | (719 | ) |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Net                  Cash Provided by Financing Activities                                                 |   |                                                                             | 302,210  |   |   | 285,161 |   |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Net                  increase (decrease) in Cash                                                           |   |                                                                             | (332,360 | ) |   | 68,315 |   |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Cash                  at Beginning of Period                                                               |   |                                                                             | 341,678  |   |   | 108,498 |   |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Cash                  at End of Period                                                                     |   | $                                                                                | 9,318    |   | $ | 176,813 |   |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Supplemental                  disclosures of non-cash investing and financing                  activities: |   |                                                                             |          |   |   |  |   |
|                                                                                                       |   |                                                                             |          |   |   |  |   |
| Common                  stock issued in exchange for services                                              |   | $                                                                                | 38,200   |   | $ | 75,000 |   |
| Common                  stock issued for accounts payable                                                  |   | $                                                                                | 60,000   |   | $ | 83,048 |   |
| Common                  stock issued for accrued vacation pay                                              |   | $                                                                                | --       |   | $ | 3,342 |   |
| Common                  stock issued for accrued note payable interest                                     |   | $                                                                                | --       |   | $ | 15,000 |   |
| Employee                  stock options charged to operations                                              |   | $                                                                                | --       |   | $ | 108,877 |   |
| Common                  stock cancelled for accrued payroll                                                |   | $                                                                                | 87,820   |   | $ | -- |   |
| Black-Scholes                  expense for common stock options issued                                     |   | $                                                                                | 33,607   |   | $ | -- |   |
| Common                  stock issued by subsidiary in exchange for services                                |   | $                                                                                | 13,200   |   | $ | 5,850 |   |
| Common                  stock issued by subsidiary for accounts payable                                    |   | $                                                                                | 39,000   |   | $ | -- |   |
| Common                  stock issued in settlement of notes payable by subsidiary                          |   | $                                                                                | --       |   | $ | 85,000 |   |
| Common                  stock issued by subsidiary for stock subscription                  receivable      |   | $                                                                                | 50,000   |   | $ | -- |   |
| Employee                  stock options for subsidiary charged to operations                               |   | $                                                                                | 15,560   |   | $ | -- |   |
| Cash                  paid for:                                                                            |   |                                                                             |          |   |   |  |   |
| Interest                                                                                                   |   | $                                                                                | --       |   | $ | -- |   |
| Income                  taxes                                                                              |   | $                                                                                | --       |   | $ | -- |   |
| Dividends                                                                                                  |   | $                                                                                | --       |   | $ | -- |   |

----

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

**Notes        To Condensed Consolidated Financial Statements**

**Three        Months Ended December 31, 2006 And 2005**

**(Unaudited)**

**NOTE        A - SUMMARY OF ACCOUNTING POLICIES**

----

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

**Notes        To Condensed Consolidated Financial Statements**

**Three        Months Ended December 31, 2006 And 2005**

**(Unaudited)**

|                                                                                                 |   | **Three                  Months Ended** |     |
|------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                                                 |   | **December                  31, 2005**  |     |
| Net                  loss available to common stockholders as reported                               |   | $                                       | (887,399 | ) |
| Total                  stock option expense determined under fair value base                  method |   |                                    | --       |   |
| Pro                  forma net loss                                                                  |   | $                                       | (887,399 | ) |
|                                                                                                 |   |                                    |          |   |
| Net                  loss per common share as reported:                                              |   |                                    |          |   |
| Basic                  and diluted                                                                   |   | $                                       | (.00     | ) |
| Net                  loss per common share pro forma:                                                |   |                                    |          |   |
| Basic                  and diluted                                                                   |   | $                                       | (.00     | ) |

|                            |       |        | 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       |        |                                  | 4,687,500                     |     |     | 4.82                                  |        | $ | 0.01 |   |   | 4,687,500 |   | $ | 0.01 |   |
|                            |  0.02 |        |                                  | 500,000                       |     |     | 0.07                                  |        |   | 0.02 |   |   | 500,000 |   |   | 0.02 |   |
|                            | 0.03       |        |                                  | 6,000,000                     |     |     | 2.42                                  |        |   | 0.03 |   |   | 6,000,000 |   |   | 0.03 |   |
|                            |       |        |                                  |                               |     |     |                                       |        |   |  |   |   |  |   |   |  |   |
|  $                         | 0.01-0.03  |        |                                  | 11,187,500                    |     |     | 3.32                                  |        | $ | 0.02 |   |   | 11,187,500 |   | $ | 0.02 |   |

----

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

**Notes          To Condensed Consolidated Financial Statements**

**Three          Months Ended December 31, 2006 And 2005**

**(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 |   |

----

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

**Notes        To Condensed Consolidated Financial Statements**

**Three        Months Ended December 31, 2006 And 2005**

**(Unaudited)**

**NOTE        B - NOTES PAYABLE**

**NOTE        C - INVENTORIES**

| Raw                  materials    |   | $      | --     |   |
|-----------------------------------|--------|--------|--------|--------|
| Work                  in progress |   |   | 49,715 |   |
|                              |   |   | 49,715 |   |

**NOTE        D - CAPITAL STOCK**

----

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

**Notes        To Condensed Consolidated Financial Statements**

**Three        Months Ended December 31, 2006 And 2005**

**(Unaudited)**

**NOTE        E - MINORITY INTEREST**

|                                                            |   | Amount |   |
|-----------------------------------------------------------------|--------|--------|--------|
|                                                            |   |   |   |
| USM                  Capital Group, Inc.                        |   | $      | 13     |   |
| Sub                  Surface Waste Management of Delaware, Inc. |   |   | 52,925 |   |
| Sol-Tech                  Corporation                           |   |   | --     |   |
| Bio-Con                  Microbes                               |   |   | --     |   |
| Totals                                                          |   | $      | 52,938 |   |

**NOTE        F - COMMITMENTS AND CONTINGENCIES**

----

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

**Notes        To Condensed Consolidated Financial Statements**

**Three        Months Ended December 31, 2006 And 2005**

**(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**

**Three        Months Ended December 31, 2006 And 2005**

**(Unaudited)**

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

|                                                      |   | **For                  the Three Months Ended****December                  31,** |     |
|-----------------------------------------------------------|--------|----------------------------------------------------------------------------------|----------|
|                                                      |   | 2006                                                                             |     | 2005 |   |
| Net                  Sales to External Customers:         |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | --       |   | $ | -- |   |
| Engineering                  Services Corporate           |   |                                                                             | 120,002  |   |   | 62,306 |   |
| Corporate                                                 |   |                                                                             | --       |   |   | 2,410 |   |
| Total                  Sales to External Customers        |   | $                                                                                | 120,002  |   | $ | 64,716 |   |
|                                                      |   |                                                                             |     |   |   |   |   |
| Depreciation                  Expense:                    |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | --       |   | $ | -- |   |
| Engineering                  Services                     |   |                                                                             | 6,909    |   |   | 4,372 |   |
| Corporate                                                 |   |                                                                             | 7,263    |   |   | 9,600 |   |
| Total                  Depreciation Expense               |   | $                                                                                | 14,172   |   | $ | 13,972 |   |
|                                                      |   |                                                                             |     |   |   |   |   |
| General                  and Administrative Expense:      |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | 133      |   | $ | 50 |   |
| Engineering                  Services                     |   |                                                                             | 575,856  |   |   | 454,862 |   |
| Corporate                                                 |   |                                                                             | 344,134  |   |   | 461,112 |   |
| Total                  General and Administrative Expense |   | $                                                                                | 920,123  |   | $ | 916,024 |   |
|                                                      |   |                                                                             |     |   |   |   |   |
| Capital                  Expenditures:                    |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | --       |   | $ | -- |   |
| Engineering                  Services                     |   |                                                                             | 8,764    |   |   | 719 |   |
| Corporate                                                 |   |                                                                             | 1,624    |   |   | -- |   |
| Total                  Capital Expenditures               |   | $                                                                                | 10,388   |   | $ | 719 |   |
|                                                      |   |                                                                             |     |   |   |   |   |
| Operating                  (Losses):                      |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | (133     | ) | $ | (50 | ) |
| Engineering                  Services                     |   |                                                                             | (499,414 | ) |   | (476,316 | ) |
| Corporate                                                 |   |                                                                             | (332,810 | ) |   | (472,674 | ) |
| Total                  Segment Operating Losses           |   | $                                                                                | (832,357 | ) | $ | (949,040 | ) |
|                                                      |   |                                                                             |     |   |   |   |   |
| Segment                  Assets:                          |   |                                                                             |     |   |   |   |   |
| Consulting                  and Financial Services        |   | $                                                                                | 145      |   | $ | 277 |   |
| Engineering                  Services - Net               |   | $                                                                                | 277,373  |   | $ | 606,668 |   |
| Corporate                                                 |   | $                                                                                | 118,747  |   | $ | 37,882 |   |
| Total                  Segment Assets                     |   | $                                                                                | 396,265  |   | $ | 644,827 |   |

----

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

**Notes          To Condensed Consolidated Financial Statements**

**Three          Months Ended December 31, 2006 And 2005**

**(Unaudited)**

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

|                                                   |   | December                  31, |    | December                  31, |   |
|--------------------------------------------------------|--------|-------------------------------|---------|-------------------------------|--------|
|                                                   |   | 2006                          |    | 2005                          |   |
| **Net                  Sales To External Customers:**  |   |                          |         |                          |   |  |   |
| United                  States                         |   | $                             | 30,357  |                          | $      | 12,752 |   |
| Mexico                                                 |   | $                             | 89,645  |                          | $      | 51,964 |   |
| **Total                  Sales To External Customers** |   | $                             | 120,002 |                          | $      | 64,716 |   |
|                                                   |   |                          |         |                          |   |  |   |
| **Assets:**                                            |   |                          |         |                          |   |  |   |
| United                  States                         |   | $                             | 272,904 |                          | $      | 600,727 |   |
| Mexico                                                 |   | $                             | 123,361 |                          | $      | 44,100 |   |
| **Total                  Assets**                      |   | $                             | 396,265 |                          | $      | 644,827 |   |

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**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**

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**RESULTS        OF OPERATIONS**

**For        The Three months ended December 31, 2006 And Three months ended December        31,        2005**

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**Liquidity        And Capital Resources.**

**Risks        And Uncertainties**

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**ITEM        3. CONTROLS AND PROCEDURES**

**PART        II - OTHER INFORMATION**

**ITEM        1. LEGAL PROCEEDINGS.**

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

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**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                                                                                                                                                                                                        |
|      |   |                                                                           |   |                                                                                       |   |                                                                                                                                                                                                               |   |                                                                                                                                                                                                     |
|      |   |                                                                           |   |                                                                                       |   |                                                                                                                                                                                                               |   |                                                                                                                                                                                                     |

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

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

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**ITEM        5. OTHER INFORMATION.**

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**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.                             |

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**SIGNATURES**

|                                                |                                                                                     |                                      |
|-----------------------------------------------------|------------------------------------------------------------------------------------------|-------------------------------------------|
|                                                | **U.S.                  MICROBICS, INC.**                                                |
|                                           |                                                                                |                                 |
| Date: February                  20, 2007  | By:                                                                            | /s/ Robert                  C. Brehm |
|                                                | Robert                  C. Brehm, President and Chief                  Executive Officer |

|                                                |                                                                    |                                   |
|-----------------------------------------------------|-------------------------------------------------------------------------|----------------------------------------|
|                                                |                                                                    |
|                                           |                                                               |                              |
| Date: February                  20, 2007  | By:                                                           | /s/ Conrad                  Nagel |
|                                                | Conrad                  Nagel, Chief Financial                  Officer |

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