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<SUBMISSION-INFORMATION-FILE> <TYPE> 10KSB </TYPE> <CONFIRMING-COPY> NO </CONFIRMING-COPY> <SROS> NONE </SROS> <FILER> <FILER-CIK> 0001381192 </FILER-CIK> <FILER-CCC> XXXXXXXX </FILER-CCC> </FILER> <SUBMISSION-CONTACT> <CONTACT-NAME> Radmila Chernickina </CONTACT-NAME> <CONTACT-PHONE> (212) 201-7015 </CONTACT-PHONE> </SUBMISSION-CONTACT> <NOTIFY-INTERNET> [email protected] </NOTIFY-INTERNET> <RETURN-COPY> NO </RETURN-COPY> <PERIOD> 12-31-2007 </PERIOD> <SHELL-COMPANY> NO </SHELL-COMPANY> </SUBMISSION-INFORMATION-FILE>

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 1 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB File name: v110188.sif Pg: 1

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

Securities registered under Section 12(b) of the Exchange Act:

Securities registered under Section 12(g) of the Exchange Act:

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or

for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.

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

State issuer’s revenues for its most recent fiscal year: $0.00.

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within the past 60 days: As of March 31, 2008, the aggregate market value of the Company’s common stock held by non-affiliates was approximately $66,631,000 based on the closing price for shares of the Company’s common stock, as reported on the Over-the-Counter Bulletin Board for that date.

State the number of shares outstanding of each of the issuer’s class of common equity, as of the latest practicable date: As of March 31, 2008, there were 75,035,233 shares of the Company’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

No documents are incorporated by reference.

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 2 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB Doc Type: 10KSB File Name: v110188_10ksb.htm Pg: 1

(Mark one) ⌧ Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2007.

Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number _____________________

BIOGOLD FUELS CORPORATION(Name of Small Business Issuer in Its Charter)

Nevada 20-5609647 (State of Incorporation) (IRS Employer Identification No.)

1800 Century Park East, Suite 600

Los Angeles, California 90067 (Address of Principal Executive Offices) (Zip Code)

(310) 556-0025

(Issuer’s Telephone Number, Including Area Code)

Title Of Each Class Name Of Each Exchange On Which RegisteredNone None

Title Of Each Class Name Of Each Exchange On Which RegisteredCommon Stock, par value $0.001 per share Over-The-Counter Bulletin Board

Transitional Small Business Disclosure Format (Check one): Yes No ⌧

BIOGOLD FUELS CORPORATION

INDEX TO ANNUAL REPORT ON FORM 10-KSB For the fiscal year ended December 31, 2007


Page Cautionary Note Regarding Forward-Looking Statements ii PART IItem 1. Description of Business. 1Item 2. Description of Property. 17Item 3. Legal Proceedings. 18Item 4. Submission of Matters to a Vote of Security Holders. 18 PART IIItem 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities. 19Item 6. Management’s Discussion and Analysis or Plan of Operation. 22Item 7. Financial Statements. 24Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. 25Item 8A. Controls and Procedures. 25Item 8B. Other Information. 28 PART IIIItem 9. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance: Compliance With Section 16(a) of the

Exchange Act. 29

Item 10. Executive Compensation. 31Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 34Item 12. Certain Relationships and Related Transactions, and Director Independence. 35Item 13. Exhibits. 37Item 14. Principal Accountant Fees and Services. 39 Signatures 40

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All

statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “desire,”

“goal,” “should,” “objective,” “seek,” “plan,” “strive” or “anticipate,” as well as variations of such words or similar expressions, or the negatives of these words. These forward-looking statements present our estimates and assumptions only as of the date of this Annual Report on Form 10-KSB (this “Form 10-KSB”). Except for our ongoing obligation to disclose material information as required by the federal securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

We caution readers not to place undue reliance on any such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes will likely vary materially from those indicated. For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please refer to the section entitled “Description of Business—Risk Factors.”


• our ability to identify, develop or obtain, and introduce new projects, products, and services;

• our ability to successfully implement our plans for the building and operation of waste processing plants;

• increased competitive pressures from existing competitors and new entrants;

• adverse state or federal legislation or regulation that increases the costs of obtaining or keeping necessary permitting, or adverse findings by a regulator with respect to existing operations;

• our ability to obtain required regulatory approvals to build and operate waste processing facilities;

• our ability to execute our development plan on time and on budget;

• fluctuations in general economic conditions;

• the loss of customers or sales weakness;

• our inability to achieve future sales levels or other operating results;

• the unavailability of funds for capital expenditures; and

• the risk of general or premises liability claims at waste processing facilities.

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PART I

Item 1. Description of Business The Company was originally formed as Full Circle Industries, Inc. (“Full Circle”). Full Circle was incorporated in Nevada on September 8, 2004 and was formed to pursue waste processing technologies. On April 20, 2007, Full Circle Industries, Inc., a Nevada corporation (“Full Circle”) completed a merger (the “BioGold Merger”) with BioGold Fuels Corporation, a Nevada corporation (“BioGold”). The BioGold Merger was effected pursuant to the terms of an Agreement and Plan of Merger (“BioGold Merger Agreement”), entered into on April 20, 2007, by and among Full Circle, BioGold, and BioGold Acquisition Inc., a newly-formed Nevada corporation and wholly-owned subsidiary of BioGold (the “Subsidiary”). Pursuant to the terms of the BioGold Merger Agreement, the Subsidiary was merged with and into BioGold, with Full Circle as the surviving entity and wholly owned subsidiary of BioGold. Full Circle continued its business under the name of BioGold Fuels Corporation as a subsidiary of BioGold. All references to Full Circle or the Company also refer to BioGold, unless the context indicates otherwise. The Company entered into the BioGold Merger to obtain the assistance of the BioGold shareholders in raising capital and providing business development guidance. Pursuant to the terms of the BioGold Merger, BioGold acquired all of the outstanding shares of Common and Preferred Stock of Full Circle (“Full Circle Stock”) in exchange for shares of Common Stock, par value $0.0001 per share of BioGold (“BioGold Stock”). At the closing of the Merger (the “Closing”), each outstanding share of Full Circle Stock held by the stockholders of Full Circle (the “Full Circle Stockholders”) was converted into the right to receive approximately 1 share of BioGold Stock, and each of the outstanding option and warrant to purchase shares of Full Circle Stock was assumed by BioGold and converted into an option or warrant to purchase approximately 1 share of BioGold Common Stock (“Common Stock”) for each one share convertible into BioGold Common Stock pursuant to such option or warrant. Accordingly, immediately following the closing, the Full Circle Stockholders owned 26,442,123 shares of BioGold Stock and held 2,553,000 warrants or options to purchase BioGold Stock. The 26,442,123 shares of BioGold Stock outstanding prior to the Merger remained outstanding following the Merger. As of the closing, the Full Circle Stockholders owned approximately 50% of the total 52,884,246 outstanding shares of BioGold Stock (or 55%, assuming exercise in full of the outstanding Full Circle options and warrants that were assumed by BioGold in connection with the Merger), and the remaining stockholders of BioGold owned approximately 50% of the total outstanding shares of BioGold Stock (or 45%, assuming exercise in full of the outstanding Full Circle options and warrants that were assumed by BioGold in connection with the Merger). Due to the change in control of BioGold as a result of the BioGold Merger, the BioGold Merger was accounted for as an acquisition of BioGold by Full Circle and a recapitalization of Full Circle. Accordingly, the consolidated financial statements of the Company subsequent to the BioGold Merger consist of the balance sheets of both companies at historical cost, the historical operations of Full Circle, and the operations of both companies from the BioGold Merger date of April 20, 2007. At the time of the BioGold Merger, BioGold was a shell company and had no material assets, liabilities or operations. On October 25, 2007 BioGold Fuels Corporation, a privately-held Nevada corporation (“BioGold”) completed a merger (the “Cab-tive Merger”) with Cab-tive Advertising, Inc., a “shell” company organized under the laws of the State of Nevada (“Cab-tive”). The Merger was effected pursuant to the terms of an Agreement and Plan of Merger (“Merger Agreement”), entered into on October 24, 2007, by and among BioGold, Cab-tive, and Cab-tive Acquisition Inc., a newly-formed Nevada corporation and wholly-owned subsidiary of Cab-tive (the “Subsidiary”). Pursuant to the terms of the Merger Agreement, the Subsidiary was merged with and into BioGold, with BioGold as the surviving entity. BioGold continued its business under the name of BioGold Fuels Corporation as a subsidiary of Cab-tive. All references to Cab-tive or the Company also refer to BioGold, unless the context indicates otherwise.


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The Company entered into the Cab-tive Merger to allow for the public trading of its securities on the over the counter bulletin board, which was intended to provide increased liquidity for existing shareholders and increase the ability of the Company to raise additional capital. Pursuant to the terms of the Cab-tive Merger, Cab-tive acquired all of the outstanding shares of Common Stock of BioGold (“BioGold Common Stock”) in exchange for shares of Common Stock, par value $0.001 per share of Cab-tive (“Cab-tive Stock”). At the closing of the Merger (the “Closing”), each outstanding share of BioGold Common Stock held by the stockholders of BioGold (the “BioGold Stockholders”) was converted into the right to receive approximately 1.527 shares of Cab-tive Stock, and each outstanding option and warrant to purchase shares of BioGold Common Stock was assumed by Cab-tive and converted into an option or warrant to purchase approximately 1.527 shares of BioGold Common Stock (“Common Stock”) for each one share convertible into BioGold Common Stock pursuant to such option or warrant (with the exercise price being adjusted accordingly). Accordingly, immediately following the closing, the BioGold Stockholders owned 54,593,233 shares of Cab-tive Stock and held 3,900,631 warrants or options to purchase Cab-tive Stock. The 20,200,000 shares of Cab-tive Stock outstanding prior to the Merger remained outstanding following the Merger. As of the closing, the BioGold Stockholders owned approximately 73% of the total 74,793,233 outstanding shares of Cab-tive Stock (or 78%, assuming exercise in full of the outstanding BioGold options and warrants that were assumed by Cab-tive in connection with the Merger), and the remaining stockholders of Cab-tive owned approximately 27% of the total outstanding shares of Cab-tive Stock (or 22%, assuming exercise in full of the outstanding BioGold options and warrants that were assumed by Cab-tive in connection with the Merger). On November 9, 2007, Cab-tive’s board of directors and majority shareholders voted to approve the change in name from Cab-tive Advertising, Inc. to BioGold Fuels Corporation. On December 19, 2007, Cab-tive Advertising, Inc. changed its name to BioGold Fuels Corporation and the prior subsidiary Nevada corporation named BioGold Fuels Corporation changed its name to BioGold Operations, Inc. which remains as a wholly owned subsidiary of BioGold Fuels Corporation. Due to the change in control of Cab-tive as a result of the Merger, the Merger was accounted for as an acquisition of Cab-tive by BioGold and a recapitalization of BioGold. At the time of the Cab-tive Merger, Cab-tive was a shell company and had no material assets, liabilities, or operations; therefore, the Company’s consolidated financial statements subsequent to the Cab-tive Merger consist of the balance sheet, statement of operation, cash flow statements, and statements of stockholder’s equity of BioGold with adjustment for the additional common stock issued pursuant to the Cab-tive Merger and the historical operations of BioGold prior to the Cab-tive Merger date of October 25, 2007. The foregoing transactions are more fully described in that certain Form 8-K filed by the Company with the Securities and Exchange Commission on October 29, 2007. Overview

BioGold Fuels Corporation (the “Company” or “BioGold”) is a renewable energy company that focuses on converting various forms of municipal solid waste (“MSW”) into usable forms of fuel and energy, effectively utilizing all components of MSW to reduce the amount of MSW ending up in landfills to as close to zero as possible. BioGold’s strategy combines both a “front-end” process and a “back-end” process. This combination of technologies under one roof is revolutionary in the trash processing industry. On the front-end, BioGold uses autoclave technology to sort and process MSW as it is brought in from trash hauling companies or landfills. BioGold will receive a “tip fee” to receive the MSW, resulting in one revenue stream. The back-end utilizes several technologies to convert the MSW into biodiesel fuel, ethanol, or energy that BioGold will then sell to end users, thus creating a second revenue stream. Any remaining plastics, metals, or other material that cannot be converted into fuel or energy will be sold as individual components, such as aluminum, which has been processed into a more readily usable form. This creates a third revenue stream.


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Industry Background

Currently, there are millions of tons of trash being disposed of by consumers throughout the world that end up in landfills and cause major environmental problems, from leaking of potentially hazardous chemicals into groundwater to the pollutants released from an accidental fire in a landfill or tire disposal facility. A host of new technologies, however, promise to create an irreversible paradigm shift for the better. No longer will it be necessary for modern man to consider the trashing of his environment an inevitable consequence of economic development. In a variety of ways, nearly all forms of waste material can now not only be handled in a more environmentally-friendly way, they can also be converted to marketable products in a very profitable way. The BioGold Advantage

BioGold Fuels Corporation is a “second generation” green energy company, which is committed to solving the problems so often associated with the first efforts at delivering alternative waste-to-energy solutions:

Existing and Future Projects

The company has several projects currently in process. These include those involving various waste feedstocks and a variety of marketable outputs. Details of each project are provided in this report. Projects are only undertaken if they meet the following criteria:

*Contracts are available to ensure long-term availability of the feedstock;


• We plan to take all types of waste, including municipal solid waste, scrap tires, medical waste, construction debris, electronic waste and agricultural waste and process them all “under one roof”. This not only provides a diversification of investment; it greatly expands the number of real world situations in which the technology can be employed. Cities, counties, states and even countries need total solutions. Also, in many cases, viability of a project is only achieved if more than one waste stream can be handled.

• Our process converts this waste into usable fuels, energy, and other usable by-products, including biodiesel, ethanol, and energy.

• We have the business expertise to get projects from the conceptual to the real world. As discussed above, many new tech companies have only the scientific/engineering knowledge and so, though they have wonderful ideas, investors to their companies never see profits. In many cases, they never even see many or any actual projects.

• We also have the technical know-how to determine which new technologies are viable and to develop improvements on existing technologies. This know-how is not limited to that of inventors; it includes the nuts and bolts of plant construction, engineering and project management skills necessary to get a new idea off the ground.

• Perhaps as much as any other factor, key members of management have been in the alternative waste-to-energy business for many years and know what does and what does not work. This is a team of people who don’t want to just dream about the possible; they know how to make it happen.

• Unlike most biodiesel or ethanol producing companies that must purchase or grow the raw materials for their process, BioGold will get paid to

take the materials needed for BioGold’s process to create fuels and energy.

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*Long-term marketability of the outputs at a profitable price is ensured; *Management has determined that the technology to be employed will result in the projected outputs and therefore revenue streams; *The project complies with all applicable regulations; *The equipment and engineering will be done by a substantial engineering company which will warrant its work; *The project has a short payback and unusually high return on investment. Based upon these criteria, we are pursuing projects to build processing plants in the United States, United Kingdom, Dominican Republic,

Asia, and Mexico that process 150 tons to over 1,000 tons per day. The capital cost of each project varies anywhere from $7 million to over $150 million. We have not started construction or operations of these facilities and there is no assurance that any of these facilities will be built.

Competition

Although there are a number of waste-to-energy companies in the market, we have not identified other companies which have the same ability to handle as large a variety of waste products in one plant complex and, to our knowledge, none of the companies have been successful in generating renewable energy from MSW by eliminating potential hazardous components of the MSW by autoclave technology. BioGold is nearly alone in this niche of the waste-to-energy business. Similar companies can only take one type of waste, (e.g. scrap tire only) versus multiple types of waste for processing (e.g. MSW, scrap tire, medical waste, electronic waste, green waste, and construction debris). In addition, we are not aware of any other companies that will take in MSW and sterilize the MSW prior to further processing through our autoclave technology, which results in significantly diminished odor and reduced chance of illness to the workers in the processing plants.

The Company may face significant competition from other, more developed, experienced, or financially supported companies. The Company feels that focussing on smaller municipalities and taking all forms of waste will significantly distinguish us from any other potential competition from larger companies.

Since our business model calls for us to provide electricity, synthetic diesel fuel, ethanol, and other recycling byproducts, we compete broadly

with companies that provide similar solutions and companies that produce these fuels and electricity. We may also face competition from existing and newly developed companies in the waste to fuel industry that may attempt to use the same business model. In addition, fully integrated major oil/chemical companies that may be pursuing similar technologies have substantially greater access to resources needed to successfully enter the emerging alternative fuels market. These companies have significantly greater financial, managerial, marketing, distribution and other infrastructure resources than the Company.

Based on the favorable advantages of our BioGold technologies, we believe that our BioGold Process will offer technical and operational advantages, including the following:

* Hydrocarbon conversion rate not previously achievable of more than 80%, without the same magnitude of dangerous residual by-products;


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*Decontamination of dangerous residual by-products (halogens, etc.) in a liquefied process that yields nominal amounts of salt;

*Dramatically reduced diesel processing residence times;

*MSW as a feedstock allows landfill reduction/reclamation simultaneously;

*Energy self-sufficient;

*Highest quality fuel;

*Modular/De-centralized units; and

*Additional electricity and heat production.

Target Markets

Because the Company’s model allows for a large range of possible projects, a decision to take up a particular project is based more on the criteria listed above than particular geographic areas or type of customer/client. Having said this, the company has targeted rural jurisdictions, smaller U.S. municipalities, Latin America, Europe and Asia as favorable current markets. The Company believes that it has a distinct competitive advantage in smaller jurisdictions with variant waste streams and enjoys good current contacts in the overseas locations enumerated.

We have formed a joint venture with Jack Allen Holdings Limited in the United Kingdom to build up to 35 plants throughout the United Kingdom and the European Union. The joint venture provides that each party will bear its own costs to pursue multi fuel processing facilities and ownership in any joint venture will be split 70% to Jack Allen and 30% to BioGold for projects in the United Kingdom. For projects outside of the United Kingdom, but in Europe, the ownership percentages will change to 60% to Jack Allen and 40% to BioGold. Processing Technology

Our processing technologies offer an environmentally safe and profitable way of disposing of a wide variety of waste feedstocks. A centerpiece of this waste-to-fuel conversion technology is the BioGold Autoclave, which sterilizes all types of waste streams from a hard to handle heterogeneous state into a sterile, classified and automatically sorted homogeneous feedstock. BioGold owns or has rights to the autoclave technology in many countries worldwide.

The front-end of our process utilizes rotating autoclave vessels that sterilize and remove pathogens from MSW in an environmentally benign manner. The process further separates recyclables that can be sold into an existing marketplace (ferrous and non ferrous metals and recyclable plastics). We currently estimate that our process is capable of diverting approximately 75% of MSW, by volume, from landfills and other disposal methods. Using this autoclave process, biomass material is transformed into a cellulose material that has the texture and appearance of potting soil. Plastic containers are flattened and ferrous metals and aluminum are de-lacquered and cleaned.

Feedstock for the auger gasifier for fuel production or electricity generation consists of the autoclaved soft cellulose fraction, autoclaved plastics, textiles and rubber. The auger gasifier can convert these organics into a renewable diesel fuel.

The electricity yield by diesel or gas engine generator is higher than the conventional Steam heat Recovery Boiler & Steam Turbine Generator system. By eliminating the potential hazardous components in the feedstock through autoclave & mechanical classification process, we can achieve this system configuration with the most competitive capital expenditures.


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BioGold Fuels recognizes three value streams in MSW: first, in the renewable fuel value that is inherent in the organic components in MSW

and; second, in the extraction and sale of the inorganic recyclables from either pre- or post-MRF (Material Recovery Facility) MSW, and third, the sale of electricity or fuels. Plastics and synthetic fibers can be processed by catalytic de-polymerization or gasification processes to also yield liquid fuels and/or synthesis gases. In addition, the intrinsic value of reducing the volume of waste diverted to a landfill, along with the attendant costs of transportation and site cost is significant. How is BioGold Fuels MSW Autoclave Process Unique?

The key to value extraction from MSW is the ability to efficiently separate MSW into discrete components. The rotating autoclave places MSW in a controlled time, temperature, pressure, and agitation environment that achieves the following: • First, the paper and packaging products (cellulosics for ethanol conversion) are consistently reduced in size to yield a homogenous fiber feedstock the size of pre-cooked oatmeal flakes. This permits the separation of cellulose material from the other organics and inorganics by simple mechanical screening. This is a process intensive step and not a labor intensive step as in the largely manual operations in MRFs (material recovery facilities). In addition, there is no need to either pre-shred or open trash bags prior to the autoclave as the internal agitation in the autoclave performs this function. • Second, the leftover portion from screening contains ferrous and non-ferrous metals, plastics, textiles, and other large discards. The ferrous material is removed using magnetic separation and the non-ferrous (e.g., aluminum) is removed using eddy current separation. This leaves plastics bottles and films as well as textiles, wood, etc. ready to be sized to -1/2” for feedstock to either gasifier or polymerization technology. Prior to grinding, heavy material will be removed by air density separation techniques. • In addition to the size reduction/separation capability provided by autoclaving, the autoclave technology licensed by BioGold Fuels removes volatile organic compounds (VOC’s) from the waste and renders them harmless by the effect of high temperature processing of steam to decompose such VOC’s into smaller molecules and discharge out of the autoclave into the condensate. After a simple treatment of condensate and off-gas, there are no major emission or waste water issues. • Further, the autoclave time and temperature condition completely sterilize the MSW and destroys any and all pathogens inherent in the incoming material with no remaining odors. Autoclave Description

Each autoclave will be about 40 feet in overall length and will have a diameter of 8 feet. There will be a single door at a full 8 foot width for loading and unloading the autoclave contents. Based on typical bulk density of MSW, the autoclave will have a working capacity of ~9 short tons per batch. The autoclave will rotate to vertical to allow filling by gravity. After filling, it will return to horizontal for the ‘cook’ cycle, and then will rotate to the opposite vertical position to discharge the cooked contents by gravity to a live bottom pit below. Each autoclave will perform a cycle in about two hours, allowing up to12 cooks per 24 hour day per autoclave or about 100 tons per day of MSW capacity per autoclave. Production can be adjusted by varying the spacing between cooks. To achieve maximum efficiency, the ideal configuration is a cluster of three 40’ autoclaves yielding between 250 to 300 tons per day of MSW processing capacity. To increase capacity further we can add another three vessel cluster, etc.


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BioGold Fuels Front-end Process

The front end of a BioGold Fuels facility will feature a MSW tip floor of storage bank where gross sorting and removal of large, unprocessible material will be performed. From the tip floor, presorted MSW will be conveyed to the autoclaves where gravity filling will be employed until each autoclave fills to a predetermined weight. The fill rate will be between 0.5 to 1.0 tons per minute of MSW, and 0.6 tons per minute average is the design goal. Following autoclave fill a proprietary cook cycle in terms of time, temperature, and agitation will be performed that will result in about a two hour cover-to-cover time between batches for each autoclave. Each autoclave will dump to a discharge conveyor to the downstream mechanical classification process at the end of the cycle resulting in a continuous flow of cooked MSW to the downstream process. The mechanical classification process consists of trommel screens, magnetic/eddy current separators, gravity separators, and conveyors. BioGold Fuels Back-end Process

Our second technology is an advanced commercial thermal distillation and gasification system to convert various waste materials including coal, municipal solid waste, medical waste, post-consumer plastics, tires, automobile shredder residue, biosolids and biomass to highly valuable commodities of syngas and carbon. The syngas can then be used to create electricity. Technology Advantages This innovative technology will cost effectively provide benefits by:

c) Human Waste

a) Bottom Oil

Many new technologies in the recycling field have emerged with the advent of increases in petroleum products and concern over global

warming. By comparison, BioGold’s process will be more versatile because it will convert numerous waste streams with much lower capital and operating costs.

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 11 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB Doc Type: 10KSB File Name: v110188_10ksb.htm Pg:

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1) Reducing cradle to grave liability (consuming waste rather than burying it)

2) Eliminating in plant containment and storage risks (pollution free solution)

3) Eliminating hauling risks and expense (new community employment opportunities)

4) Reduction in handling efforts and costs. (modular systems scale up or down as needed)

5) Saving potential energy costs through co-generation. (Consume some of the energy made during the process fostering conservation)

6) Produce clean fuels (gas and liquid) from waste feed stocks such as:

1) Biomass which includes:

a) MSW (municipal solid waste)

b) Agricultural Waste

• Animal Waste

• Agricultural Residue

• Biosolids

• Medical Waste

2) Industrial Waste

b) Industrial Solvents

c) Certain Chemical Processing Wastes

d) Waste Coal

e) Sewer Sludge

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The gasification technology has been already permitted to operate in state of California by EPA. The pyrolysis is thermal decomposition of

material in an oxygen starved atmosphere, which generates the syngas with a higher content of hydrogen and carbon-monoxide with less carbon dioxide. Gasification should not be confused with incineration or drying.

The combination of proven hardware and system control software allow BioGold to install a system that can be reliably operated in an environmentally sustainable way to help solve the problem of solid waste disposal by profitably recycling waste materials into marketable form.

BioGold will grow its business through expansion of waste processing capacity and by adding other suitable feed-stocks that can be processed on the site. The process equipment is modular and can be easily expanded as additional feed-stocks and capital from generated cash flow are obtained. How the gasification system works:

The gasification advanced recycling technology consists of a reactor chamber (a sealed chamber) heated with Super Low NOx burners. The patented super low NOx burner system is considered the most efficient in the world for low NOx emissions. The reactor is designed so that no raw gases can be released to the atmosphere.

Thermal distillation is the thermal decomposition of organic matter at temperatures sufficient to volatilize or gasify organic material in the absence of oxygen. As the temperature increases, the vapors flow out of the reaction chamber and are condensed to fuel form which can be used as a clean energy source. The process sequence is as follows:

BioGold believes that the gasification technology can produce medium grade synthetic diesel and may be able to produce ethanol. These alternative fuels may qualify for certain financial incentives and tax credits.

EPA Act 1992

The Energy Policy Act of 1992, or EPA Act 1992, requires government fleet operators to use a certain percentage of alternatively fueled vehicles (“AFVs”). EPA Act 1992 established a goal of replacing 10% of motor fuels with non-petroleum alternatives by 2000, increasing to 30% by the year 2010. Currently, 75% of all federal vehicles purchased are required to have alternative fuel capability to set an example for the private automotive and fuel industries. Under the Energy Conservation Reauthorization Act of 1998 (which amended Title III of EPA Act 1992), vehicle fleets that are required to purchase AFVs can generate credit toward this requirement by purchasing and using biodiesel in a conventional vehicle. Since there are few cost-effective options for purchasing heavy-duty AFVs, federal and state fleet providers can meet up to 50% of their heavy-duty AFV purchase requirements with biodiesel fuel. The biodiesel fuel use credit allows fleets to purchase and use 450 gallons of biodiesel in vehicles in excess of 8,500 pounds gross vehicle weight instead of AFVs. Fleets must purchase and use the equivalent of 450 gallons of pure biodiesel in a minimum of a 20% blend to earn one AFV credit. Covered fleets earn one vehicle credit for every light-duty vehicle (“LDV”) AFV they acquire annually beyond their base vehicle acquisition requirements. Credits can be banked or sold. Compliance with the requirements under EPA act 1992 is a principal reason underlying the position of the U.S. Department of Defense as the largest domestic purchaser of biodiesel.


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1) Ignition of highly efficient, Super Low NOx, low emission burners. It takes approximately one hour to bring the system up to processing temperature once feedstock is loaded and the purging is complete.

2) Depolymerization, Distillation and condensing normally start within 10 to 15 minutes. All gases leaving the system go through the condenser at which point the gases condense in to fuels which include syngas, alcohols and fuel oils.

3) Another product produced in the process is carbon (char) which has numerous commercial applications depending on the feedstock and the purity of this material.

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The Biodiesel Tax Credit

In October 2004, Congress passed a biodiesel tax incentive, structured as a federal excise tax credit, as part of the American Jobs Creation Act

of 2004 (the “JOBS Act”). The credit amounts to a penny for each percentage point of vegetable oil biodiesel that is blended with petroleum diesel and one-half penny per percentage point for recycled oils and other non-agricultural biodiesel.

The tax incentive generally is taken by petroleum distributors and substantially passed on to the consumer. It is designed to lower the cost of biodiesel to consumers in both taxable and tax-exempt markets. The tax credit under the JOBS Act was scheduled to expire at the end of 2006, but was extended in EPA act 2005 to the end of 2008. There are proposals pending in Congress to extend the tax credit to the end of the decade and beyond. (Note: Synthetic diesel may not qualify for these incentives and credits.)

EPA act 2005

Congress enacted the Energy Policy Act of 2005 or EPA act 2005, in August 2005 and included a number of provisions intended to spur the production and use of biodiesel. In particular, EPA act 2005’s provisions include biodiesel as part of the applicable volume in the renewable fuels standard (the “RFS”), although the EPA is directed to determine the share allocated to biodiesel and other details through its rulemaking process. EPA act 2005 also extended the biodiesel tax credit to 2008 and included a new tax credit for renewable diesel.

The RFS requires a specific amount of renewable fuel to be used each year in the nationwide gasoline and diesel pool. The volume increases each year, from 4 billion gallons per year in 2006 to 7.5 billion gallons per year in 2020.

EPA act 2005 required the EPA, beginning in 2006, to publish by November 30 of each year, “renewable fuel obligations” that will be applicable to refineries, blenders and importers in the contiguous 48 states. There must be no geographic restrictions on where renewable fuel may be used or per-gallon obligations for the use of renewable fuel. The renewable fuel obligations are required to be expressed in terms of a volume percentage of gasoline sold or introduced into commerce and consist of a single applicable percentage that will apply to all categories of refineries, blenders and importers. The renewable fuel obligations are to be based on estimates that the EIA provides to the EPA on the volumes of gasoline it expects will be sold or introduced into commerce. In terms of implementing the RFS for the year 2006, the EPA released a rule determining that the RFS target for 2006, 4.0 billion gallons of renewable fuel in the gasoline and diesel pool, was to be met given the current expectations of production of both ethanol and biodiesel for that year. If the EPA had determined the 2006 target was not being met, refiners, blenders and importers would be obligated to make up the shortfall in the year 2007. The EPA is expected to release the final rule to implement the RFS by the end of 2007.


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Other Incentive Programs Offered at the Federal and State Levels The federal government offers other programs as summarized in the table below:

Source: Compiled by the IFQC Biofuels Center, 2005.

Many states are following the federal government’s lead and are offering similar programs and incentives to spur biodiesel production and use. For example, Illinois and Minnesota have mandated the use of B2 in all diesel fuel sold in their respective states subject to certain conditions that include sufficient annual production capacity (defined as at least 8 million gallons). The mandate took effect in Minnesota in September 2005 and in Illinois in July 2006.

Approximately 31 states provide either user or producer incentives for biodiesel. Several provide both types of incentives. A handful of states, currently approximately nine, provide incentives to biodiesel producers to build facilities in their states, typically offering tax credits, grants and other financial incentives. Two states provide fuel rebate programs, and two provide revolving funds for fleet biodiesel purchases.

International Biodiesel Developments and Public Policy Initiatives

Various non-European countries have also instituted public policy initiatives to encourage biodiesel production and use, and have done so

generally through a combination of fiscal incentives and mandates or voluntary targets, including Argentina, Australia, Brazil, Canada, Indonesia, Malaysia and New Zealand.

The following eight European countries have duty exemptions and, in most cases, mandates to incent and require the use of biodiesel: Austria, France, Germany, Italy, the Netherlands, Spain, Sweden and the United Kingdom. These countries account for more than 80% of the EU25’s potential biodiesel market.


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Federal Agency that Administers/Oversees Type of

Incentive Who Receives Incentive Commonly

Known As Summary

IRS income tax credit infrastructure

providers Alternative Fuel

Infrastructure Credit

Provides a tax credit in an amount equal to 30% of the cost of any qualified non-residential AFV refueling property placed into service in the United States, subject to limits.

EPA grant program school districts Clean School Bus

Program

Clean School Bus USA reduces operating costs and children’s exposure to harmful diesel exhaust by limiting bus idling, implementing pollution reduction technology, improving route logistics and switching to biodiesel. The Energy Bill of 2005 utilizes this EPA program to grant up to a 50% cost share (depending on the age and emissions of original bus) to replace school buses with buses that operate on alternative fuels or low-sulfur diesel, or up to 100% for retrofit projects.

USDA grant program

agricultural producers &

small businesses

Renewable Energy Systems and

Energy Efficiency Improvements

Grant

In fiscal year 2005, USDA’s Office of Rural Development made available $22.8 million in competitive grant funds and guaranteed loans for the purchase of renewable energy systems and energy improvements for agricultural producers and small rural businesses. Eligible projects include biofuels, hydrogen, and energy efficiency improvements, as well as solar, geothermal, and wind.

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Environmental Laws

In executing our business plan, the Company intends to comply with all applicable environmental laws relating to the building and operation

of its production facilities in each country that we plan to operate. We may face delays in obtaining required permits to operate certain facilities based upon compliance with that location’s environmental laws; however, we believe that we will be able to comply with those laws. Sales and Marketing

To date, we have conducted all of our business development and sales efforts through our officers and executives who are active in other roles. We intend to build dedicated sales, marketing, and business development teams, which will develop and execute their respective strategies of marketing the BioGold process to local governments and any other entities that process waste or create significant amounts of waste that could potentially be processed on site. Engineering and Manufacturing

We currently anticipate outsourcing the development of our facilities and the manufacture of our BioGold multi-fuel processing plants to contract engineering firms and contract manufacturing firms. We will retain in house engineering and logistics to oversee the outsourced manufacturing and future research and development of new or changing technologies. Licensing and Intellectual Property Protection

We rely on and will use a combination of patent, copyright, and trade secret laws and know-how to establish and protect our proprietary technologies and products. Our success depends in part on our ability and the ability of our technology partners to obtain patent protection for our products and processes, to preserve our copyrights and trade secrets, to operate without infringing the proprietary rights of third parties and to acquire licenses related to enabling technology or products used with our BioGold technologies. We license or purchase the majority of our technology from third parties and require those third parties to maintain the strictest protection of their intellectual property.

RISK FACTORS Risks Related To Our Business

WE HAVE A LIMITED OPERATING HISTORY AND OUR FINANCIAL RESULTS ARE UNCERTAIN.

We are an early stage development company with no revenue to date. We are subject to the entire risks attendant to any early stage company. We are a renewable fuels company focused on the development and commercialization of all types of renewable energy both liquid and gas. We can give no assurance that our plans and our strategies to position ourselves for long-term growth by leveraging our proprietary licensed technologies in the development and construction of waste processing plants and sales of resulting renewable fuels can or will be successful, or that we will be able to attain significant sales or achieve or maintain, profitability. There can be no assurance that we can be or will be profitable in the immediate future.


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We have a limited history and face many of the risks inherent to a new business. As a result of our limited operating history, it is difficult to

accurately forecast our potential revenue. Our revenue and income potential is unproven and our business model is still emerging. Therefore, there can be no assurance that we will provide a return on investment in the future. An investor in our Company must consider the challenges, risks and uncertainties frequently encountered in the establishment of new technologies and products in emerging markets and evolving industries. These challenges include our ability to:

• execute our business model;

• create brand recognition;

• manage growth in our operations;

• create a customer base in a cost-effective manner;

• retain customers;

• access additional capital when required; and

• attract and retain key personnel.

There can be no assurance that our business model will be successful or that it will successfully address these and other challenges, risks and uncertainties.

WE MAY NEED ADDITIONAL FUNDING IN THE FUTURE, AND IF WE ARE UNABLE TO RAISE CAPITAL WHEN NEEDED, WE MAY BE FORCED TO DELAY, REDUCE OR ELIMINATE OUR PRODUCT DEVELOPMENT PROGRAMS OR COMMERCIAL EFFORTS.

Designing, constructing and operating waste processing facilities and seeking approvals for such facilities from regulatory authorities, establishing manufacturing capabilities and marketing our services is costly. We may need to raise substantial additional capital in the future in order to execute our business plan and fund the construction and operation of waste processing facilities.

We may need to finance future cash needs through public or private equity offerings, debt financings or strategic collaboration and licensing arrangements. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional dilution, and debt financing, if available, may involve restrictive covenants. If we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our products, technologies or our development projects or to grant licenses on terms that are not favorable to us. We cannot be certain that additional funding will be available on acceptable terms, or at all. If adequate funds are not available from the foregoing sources, we may consider additional strategic financing options, including sales of assets, or we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs or curtail some of our commercialization efforts of our operations. We may seek to access the public or private equity markets whenever conditions are favorable, even if we do not have an immediate need for additional capital.

OUR INDEPENDENT AUDITOR’S REPORT CONTAINS A GOING CONCERN QUALIFICATION WHICH MEANS THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.


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Our independent registered public accounting firm has concluded that the Company’s recurring losses from operations and working capital

deficiency raises substantial doubt about our ability to continue as a going concern. Additionally, we have incurred significant operating and net losses and have been unable to meet our cash flow needs with internally generated funds. Our cash requirements (primarily working capital requirements and cash for engineering, design, and construction of waste processing facilities) have been satisfied through borrowings and the issuance of securities in a number of private placements. At December 31, 2007, we had cash and cash equivalents on hand of $48,564, trading securities valued at $5,364, and a negative working capital position of $144,538. On a going forward basis, our primary business strategy is to continue to market our waste processing plants which include the design, engineering, and construction of these plants; however, each facility will require substantial financing to pursue any specific project. We have successfully raised capital in the form of the issuance of promissory notes and the sale of securities, the proceeds of which were used for working capital. We may need to continue to raise additional equity or debt financing to adequately fund our strategies and to satisfy our ongoing working capital requirements. If we are unable to obtain such financing in a timely manner, we could be forced to curtail or cease operations. Even if we are able to pursue these strategies, there can be no assurances that we will ever attain profitability. The financial statements included herein do not include any adjustments that might result from the outcome of this uncertainty.

THE LACK OF FEEDSTOCKS INCLUDING MUNICIPAL SOLID WASTE (“MSW”) COULD HINDER OUR ABILITY TO OPERATE SUCCESFULLY

Our focus is implementing conversion technologies and methodologies to convert Municipal Solid Wastes (and other potential wastes including waste oils, waste plastics, waste wood, automobile shredder residue (ASR) and agricultural wastes), into fuel grade diesel or electric energy. Failure to develop a substantial incoming feedstock of waste for this diesel production facility would have a material adverse effect on our business.

WE DEPEND ON RELATIONSHIPS WITH OUR LICENSORS, AND EQUIPMENT MANUFACTURERS

Substantially all of the sales of our fuels, electricity, and tip fees will be derived and dependent upon licensing agreements, with our joint venture partners and our autoclave and other technology licensors. Under these agreements, our primary product is the commercial production of synthetic diesel fuel, ethanol, and energy from MSW. A substantial portion of our net income will result from the fuel and energy sales. Some of these licenses are dependent upon obtaining funding for our processing plants. Our success therefore will be dependent on the quality and efforts of these fund raisings, joint venture partner efforts and their technologies along with networking of fuel and energy sales companies or public entities.

OUR “AUTOCLAVE” AND DIESEL CONVERSION SYSTEMS CAN BE COSTLY AND REQUIRE ADDITIONAL RESEARCH, AND DEVELOPMENT ACTIVITIES, WHICH MAY NOT YIELD SUCCESSFUL OPERATIONS

Our future business success will depend on our ability to successfully develop and construct the envisioned waste to energy facilities, and obtain necessary regulatory approvals to effectuate the same. Development of this facility and its commensurate processes requires substantial technical, financial and human resources even if the facility is not successfully completed. There are many risks and uncertainties inherent in this process. We may not be able to execute development in a timely manner and may not be able to fully fund technological implementation programs necessary to complete development. Delays or unanticipated increases in costs of development at any stage of development, or failure to solve a technical challenge, could adversely affect our operating results. In addition, there can be no assurance that any particular system will perform in the same manner when used in another location and therefore these systems may not prove to be as useful or valuable as originally thought. Substantial funding and other resources may be required to continue the development of our multi-fuel processing facilities.


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WE DEPEND ON EXPERIENCED SENIOR MANAGEMENT AND HIGHLY SKILLED EMPLOYEES, AND HAVE A NEED FOR

ADDITIONAL PERSONNEL

Our future performance depends in significant part upon the continued service of our key officers and employees, in particular, Steve Racoosin President and Chief Executive Officer and Chris Barsness, Chief Financial Officer. Our success also depends on our ability to identify, hire, train, retain and motivate highly skilled technical, financial and development managerial personnel. We intend to hire several such personnel in the future. Competition for such personnel is intense and there can be no assurance that we will successfully attract, assimilate or retain a sufficient number of qualified personnel. The failure to retain and attract the necessary technical, financial and development managerial personnel could have a material adverse impact on our business, financial condition and operations.

WE FACE COMPETITION FROM A NUMBER OF RENEWABLE FUELS COMPANIES

Many renewable fuels companies have advantages over us due to their larger customer bases, greater name recognition, long operating and product development history, greater international presence and substantially greater financial, technical, regulatory and marketing experience and resources. One of our board of director members, Mr. Wendland, himself, is a CEO of a highly successful corn to ethanol (70,000,000 gallon per year) facility in Mason City Iowa. Competitors may succeed in developing technologies and products that are more effective than ours, which could render technologies obsolete and noncompetitive. We may be unable to continue to compete successfully with new and existing competitors without lowering prices or offering other favorable terms, or developing and/or utilizing other technologies to enhance our processes. It may be difficult for us to compete with larger companies investing greater resources in these marketing activities.

WE DEPEND ON INTELLECTUAL PROPERTY, WHICH IS INHERENT WITH RISKS OF INFRINGEMENT

Our success is dependent on our intellectual property. We regard our system of combining the autoclave system, ethanol conversion, microwave pyrolysis and gasification diesel and electricity conversion licenses as unique, and proprietary, and will continue to rely on a combination of contract, patent, copyright and trademark law, trade secrets, confidentiality agreements and contractual provisions to protect our proprietary rights. The patent position of companies engaged in the conversion of waste streams to diesel fuel is new, uncertain and involves complex legal and factual questions. Issued patents can later be held invalid by the patent office issuing the patent or by a court. There can be no assurance that the patents related to our licenses will not be challenged, invalidated or circumvented or that the rights granted under these patents will provide us with a competitive advantage. In addition, many other organizations are engaged in research and development of products similar to our autoclave and diesel conversion technologies. Such organizations may currently have, or may obtain in the future, legally blocking proprietary rights, including patent rights, in one or more products or methods under development or consideration by us. These rights may prevent us from commercializing new technology, or may require us to obtain a license from the organizations to use their technology. There has been substantial litigation regarding patent and other intellectual property rights in the renewable fuels industries. Litigation could result in substantial costs and a diversion of our efforts, but may be necessary to enforce any patents issued to us, protect our trade secrets or know-how, defend against claimed infringement of the rights of others, or determine the scope and validity of the proprietary rights of others. There can be no assurance that third parties will not pursue litigation that could be costly to us. An adverse determination in any litigation could subject us to significant liabilities to third parties, require us to seek licenses from or pay royalties to third parties or prevent us from developing or selling our products, any of which could have a material adverse effect on our business.


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Risks Related To Our Common Stock

OUR COMMON STOCK IS THINLY TRADED AND STOCKHOLDERS MAY NOT BE ABLE TO LIQUIDATE THEIR INVESTMENT

AT ALL, OR MAY ONLY BE ABLE TO LIQUIDATE THEIR INVESTMENT AT A PRICE LESS THAN OUR VALUE.

Our common stock is very thinly traded, and the price if traded may not reflect our value. Consequently, investors may not be able to liquidate their investment at all, or if they are able to liquidate their investment, it may only be at a price that does not reflect the value of the business. Even if a more active market should develop, the price of our common stock may be highly volatile. Because the price for our common stock is low, many brokerage firms may not be willing to effect transactions. Even if an investor finds a broker willing to effect a transaction in our common stock, the combination of brokerage commissions, transfer fees, taxes, if any, and any other selling costs may exceed the selling price. Further, many lending institutions will not permit the use of our common stock as collateral for loans.

BECAUSE WE ARE SUBJECT TO THE PENNY STOCK RULES, SALE OF OUR COMMON STOCK BY INVESTORS MAY BE DIFFICULT.

We are subject to the SEC’s “penny stock” rules. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the purchaser with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson and monthly account statements showing the market value of each penny stock held in the purchaser’s account. The bid and offer quotations and the broker-dealer and salesperson compensation information must be given to the purchaser orally or in writing prior to completing the transaction, and must be given to the purchaser in writing before or with the purchaser’s confirmation.

In addition, the penny stock rules require that prior to a transaction, the broker and/or dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for our common stock. As long as our common stock is subject to the penny stock rules, the holders of our common stock may find it more difficult to sell their securities.

OUR COMMON STOCK PRICES COULD DECREASE IF A SUBSTANTIAL NUMBER OF SHARES ARE SOLD UNDER RULE 144.

A substantial majority of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (“Securities Act”). As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemption from registration under the Securities Act and as required under applicable state securities laws. Since we may be considered a “shell corporation”, Rule 144 provides in essence that a non-affiliate person who has held restricted securities for a period of at least one year from the Company’s filing of a Form 10 information statement may sell all of their shares without restrictions. If we are not considered a “shell corporation,” Rule 144 would allow sales by non-affiliates after a holding period of six months. If a substantial number of shares of our common stock are sold under Rule 144 or other exemption, it could cause the price of our common stock to go down.

OUR PRINCIPAL STOCKHOLDERS HAVE THE ABILITY TO EXERT SIGNIFICANT CONTROL IN MATTERS REQUIRING STOCKHOLDER VOTE AND COULD DELAY, DETER OR PREVENT A CHANGE IN CONTROL OF OUR COMPANY.

Mr. Steve Racoosin, our Chairman and Chief Executive Officer, owns approximately 19% of our outstanding common stock and will be able to assert significant influence over the election of directors and other matters presented for a vote of stockholders. In addition, because we are incorporated in Nevada, Nevada corporate law provides that certain actions may be taken by consent action of stockholders holding a majority of the outstanding shares. In the event that the requisite approval of stockholders is obtained, dissenting or non-participating stockholders generally would be bound by such vote. Through such concentration of voting power, Mr. Racoosin could delay, deter or prevent a change in control or other business combination that might otherwise be beneficial to our other stockholders. In deciding how to vote on such matters, Mr. Racoosin may be influenced by interests that conflict with those of other stockholders. As a result, investors who purchase our common stock should be willing to entrust all aspects of operational control to our current management team.


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For more information on this matter, please refer to the section entitled “Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters.”

THE CONVERSION OF OUTSTANDING CONVERTIBLE SECURITIES COULD CAUSE INVESTORS’ OWNERSHIP TO BE DILUTED AND MAY DECREASE THE VALUE OF THEIR INVESTMENT.

Outstanding convertible securities and current and future obligations to issue our securities to various parties may dilute the value of stockholders’ investment. As of December 31, 2007, we had options and warrants outstanding to purchase approximately 3,900,630 shares of our common stock at prices ranging from $0.01 to $0.65 per share. For the length of time these warrants and options are outstanding, the holders of such warrants and options will have an opportunity to profit from a rise in the market price of our common stock without assuming the risks of ownership. This may have an adverse effect on the terms upon which we can obtain additional capital. It should be expected that the holders of such convertible securities would exercise or convert them at a time when we would be able to obtain equity capital on terms more favorable than the exercise or conversion prices provided by the warrants or options. There are no preemptive rights in connection with our common stock.

WE DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE.

We do not intend to pay any dividends in the foreseeable future. We do not plan on making any cash distributions in the manner of a dividend or otherwise. Our Board presently intends to follow a policy of retaining earnings, if any.

WE HAVE THE RIGHT TO ISSUE ADDITIONAL COMMON STOCK AND PREFERRED STOCK WITHOUT THE CONSENT OF STOCKHOLDERS. THIS WOULD HAVE THE EFFECT OF DILUTING INVESTORS’ OWNERSHIP AND COULD DECREASE THE VALUE OF THEIR INVESTMENT.

We have additional authorized, but unissued shares of our common stock that may be issued later by us for any purpose without the consent or vote of our stockholders that would dilute stockholders’ percentage ownership of our company. Our certificate of incorporation authorizes the issuance of up to 700,000,000 shares of common stock.

In addition, our certificate of incorporation authorizes the issuance of shares of preferred stock, the rights, preferences, designations and limitations of which may be set by the Board. Our certificate of incorporation has authorized issuance of up to 5,000,000 shares of preferred stock in the discretion of our Board. The shares of authorized but undesignated preferred stock may be issued upon filing of an amended certificate of incorporation and the payment of required fees; no further stockholder action is required. If issued, the rights, preferences, designations and limitations of such preferred stock would be set by our Board and could operate to the disadvantage of the outstanding common stock. Such terms could include, among others, preferences as to dividends and distributions on liquidation.


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IT IS POSSIBLE THAT THERE ARE CLAIMS OF WHICH WE ARE UNAWARE THAT MAY COME TO LIGHT IN THE FUTURE

AND COST US CONSIDERABLE TIME, EFFORT AND EXPENSE TO RESOLVE.

We were formed by virtue of a merger of a privately-held operational company with a non-operational publicly-traded company. While the publicly-traded company had not been operational for several years prior to the acquisition of BioGold Fuels Corporation, the privately-held operational company (“Old BioGold”), it is possible that a claim, whether colorable or not, may be asserted against us in the future with respect to matters arising prior to the merger. There can be no assurance that some person will not devise a claim and attempt to assert it against us in the hopes of obtaining some monetary benefit. Resolving such a claim, including by making a monetary payment, may cost us considerable time, effort and expense. Any of these may impair management’s implementation of our business plan with the consequence of a loss of opportunity.

EVOLVING REGULATION OF CORPORATE GOVERNANCE AND EXECUTIVE COMPENSATION MAY RESULT IN ADDITIONAL EXPENSES AND CONTINUING UNCERTAINTY.

Changing laws, regulations and standards relating to corporate governance, executive compensation, new SEC regulations and the rules of various stock exchanges, are creating uncertainty for public companies. As a result of these new rules, we will incur additional costs associated with our public company reporting requirements. In addition, these new rules could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, which could make it difficult for us to attract and retain qualified persons to serve on our Board.

We are presently evaluating and monitoring developments with respect to new and proposed rules and cannot predict or estimate the amount of the additional costs we may incur or the timing of such costs. These new or changed laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and we may be adversely affected. Item 2. Description of Property.

Our executive offices are located at 1800 Century Park East, Suite 600, Los Angeles, California 90067. The approximately 500 square feet office was leased for one year from January 1, 2008 through December 31, 2008 at a monthly rental rate of approximately $1,800. We believe that our Los Angeles, California facility is currently sufficient for our existing activities; however, we may need to seek additional office space in one or more locations in the near future to accommodate the company’s rapid growth and expansion plans. The facilities are well maintained and in good condition.


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Item 3. Legal Proceedings.

We are not a party to any material legal proceedings and we are not aware of any threatened legal proceedings that could cause a material adverse impact on our business, assets or results of operations. Item 4. Submission of Matters to a Vote of Security Holders.

No matter was submitted during the fourth quarter of the fiscal year ended December 31, 2007 to a vote of security holders through the solicitation of proxies. On November 9, 2007, a majority of shareholders representing approximately 58% of outstanding shares of common stock and the board of directors provided written consent to amend the Company’s Articles of Incorporation to change the Company’s name from Cab-tive Advertising, Inc. to BioGold Fuels Corporation, as well as adopting a 2008 Equity Incentive Plan which reserved for issuance up to 10,000,000 shares of common stock. On November 26, 2007, the Company filed and mailed to all shareholders its Securities and Exchange Commission Schedule 14C- Definitive Information Statement which notified the shareholders of the action taken. No further action is required and there are no dissenter’s rights pursuant to Nevada law.


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PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Our common stock has been traded on the OTC Bulletin Board over-the-counter market since January 8, 2008 under the symbol “BIFC.OB.” Prior to the merger in which Old BioGold became our wholly-owned subsidiary on October 25, 2007, our common stock was traded on the OTC Bulletin Board over-the-counter market under the symbol “CBVA.OB” since August 16, 2007.

There was little trading in our common stock prior to October 25, 2007, and there has only been limited trading since then. Prior to the merger, trading in our common stock was not necessarily based on our operations or prospects, and trading since the merger also may not be fully reflective of those aspects of our business. The following table sets forth, for the periods indicated, the high and low closing sales prices for our common stock on the OTC Bulletin Board, for the quarters presented. The prices have been adjusted to reflect our 10-for-1 stock split, which became effective at the close of business on October 15, 2007. The prices for the periods prior to that date may not reflect our 10-for-1 stock split. Prices represent inter-dealer quotations without adjustments for markups, markdowns and commissions, and may not represent actual transactions.

On March 31, 2008, the closing sale price for our common stock was $1.20.

Holders

As of March 31, 2008, we had 129 shareholders of record of our common stock. Dividends

We have not paid any dividends on our common stock to date and do not anticipate that we will be paying dividends in the foreseeable future. Any payment of cash dividends on our common stock in the future will be dependent upon the amount of funds legally available, our earnings, if any, our financial condition, our anticipated capital requirements and other factors that our Board may think are relevant. However, we currently intend for the foreseeable future to follow a policy of retaining all of our earnings, if any, to finance the development and expansion of our business and, therefore, do not expect to pay any dividends on our common stock in the foreseeable future.


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High Low

Year ended December 31, 2006 First quarter $ n/a $ n/aSecond quarter $ n/a $ n/aThird quarter $ n/a $ n/aFourth quarter $ n/a $ n/a

Year ended December 31, 2007 First quarter $ n/a $ n/aSecond quarter $ n/a $ n/aThird quarter $ 0.20 $ 0.01Fourth quarter $ 0.90 $ 0.12

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Securities Authorized for Issuance Under Equity Compensation Plans

The following table contains certain information relating to outstanding warrants and options to purchase our common stock granted pursuant to compensation arrangements as of December 31, 2007:

(1) Consists of common stock non-qualified options to purchase our common stock that have been granted pursuant to our 2004 Stock Option Plan and 2008 Equity Incentive Plan. On February 8, 2007, we filed with the SEC a Registration Statement on Form S-8 to register 10,000,000 shares of our common stock issuable under the 2008 Equity Incentive Plan. (2) We have not granted any options to purchase our common stock pursuant to equity compensation plans that have not been approved by our stockholders. Recent Sales of Unregistered Securities

During the past three years, the Registrant sold unregistered securities as described below. Except as disclosed below, there were no underwriters involved in the transactions and there were no underwriting discounts or commissions paid in connection therewith. Upon formation on September 8, 2004, the Company sold and issued 19,187,500 shares of its common stock to the founders of the Company at a price of $0.00001 per share. 17,000,000 of these shares were issued to related parties. The Company entered into a private placement of unregistered securities whereby it sold and issued 2,060,000 shares of common stock in the year ended December 31, 2004. The common stock was sold at $0.25 per share. The gross aggregate proceeds from the sale of this stock were $515,000. In the year ended December 31, 2005, the Company merged with International Waste Processors (“IWP”) and the Company exchanged 970,000 shares of common stock for all outstanding shares of common stock in IWP. The shares were valued at $0.25 per share which was the fair value of the Company’s most recent private placement. During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 1,658,000 shares of common stock at $0.25 per share for gross aggregate proceeds from the sale of this stock of $414,500.


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Plan Category

Number of

Securities to be Issued Upon Exercise of

Outstanding Options,

Warrants and Rights

Weighted-Average

Exercise Price ofOutstanding

Options, Warrants and

Rights

Number of Securities Remaining

Available for Future Issuance

Under Equity

Compensation Plans (Excluding

Securities Reflected

in Column (a)) (a) (b) (c)Equity compensation plans

Approved by security holders (1): 1,222,289 $ 0.23 10,000,000Equity compensation plans not

Approved by security holders (2): — — —

Total 1,222,289 $ 0.23 10,000,000

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During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 698,000 shares of common stock at $1.00 per share for gross aggregate proceeds from the sale of this stock of $698,000. The Company sold these shares at an increased valuation based upon the merger with IWP and its acquisition of additional waste processing technologies. During the year ended December 31, 2005, two warrants representing 468,200 shares of common stock were exercised at their exercise price of $0.01 per share and the Company issued 468,200 shares of common stock. During the year ended December 31, 2005, Steve Racoosin, the Company’s current Chief Executive Officer contributed 2,000,000 shares of common stock back to the Company to assist with a private placement and to minimize dilution to shareholders in connection with a prior offering. These shares were added to the authorized but unissued shares of the Company’s common stock. During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 150,000 shares of Series A Convertible Redeemable Participating Preferred Stock at $1.00 per share. During the year ended December 31, 2006, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 2,730,423 shares of Series A Convertible Redeemable Participating Preferred Stock. $2,530,423 of the gross aggregate proceeds from this issuance was received in the year ended December 31, 2006. The remaining $200,000 was booked as a subscription receivable and received in 2007. During the year ended December 31, 2006, the Company issued 500,000 shares of common stock to two consultants as compensation for services and recognized $500,000 in compensation expenses. In addition, the Company issued 120,000 shares of preferred stock to a consultant for services and recognized $120,000 in compensation expense. During the year ended December 31, 2006, the Company agreed to reverse part of the cancellation of common stock by Steve Racoosin. The Company reissued 1,500,000 shares back to Mr. Racoosin. On February 12, 2007, Hudson & Co., LLC contributed 1,000,000 shares of common stock back to the Company. These shares were added to our authorized by unissued shares of common stock. During the year ended December 31, 2007, the Company entered into a subscription agreement through a private placement of unregistered securities to sell and issue 160,000 shares of Common Stock at $0.50 per share for net proceeds of $79,950. During the year ended December 31, 2007, the Company issued 29,442,546 shares of common stock, of which 3,000,423 were shares of preferred stock that were converted to common stock pursuant to the BioGold Merger and issued 21,908,987 shares of common stock pursuant to the Cab-tive Merger. Issuer Purchases of Equity Securities During the year ended December 31, 2006, the Company repurchased and retired 100,000 shares of common stock at $0.50 and 500,000 shares of common stock at $1.00 per share.


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During the year ended December 31, 2007, in connection with the Cab-tive Merger, the Company repurchased 30,000 shares of common stock from three shareholders who dissented to the Cab-tive Merger under Nevada law. The Company repurchased these shares for $158. Item 6. Management’s Discussion and Analysis or Plan of Operation.

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes to those statements included elsewhere in this Form 10-KSB. This discussion may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under the section entitled “Description of Business—Risk Factors” and elsewhere in this Form 10-KSB. Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates since the end of our last fiscal year. For detailed information on our critical accounting policies and estimates, see our financial statements and notes thereto included elsewhere in this Form 10-KSB.

The following discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States and with applicable SEC rules and regulations. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates including, among others, those affecting revenues, the allowance for doubtful accounts, and the useful lives of tangible and intangible assets. The discussion below is intended to be a brief discussion of some of the judgments and uncertainties that can impact the application of these policies and the specific dollar amounts reported in our financial statements. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed above and elsewhere in this Form 10-KSB. We do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

We have identified below some of our accounting policies that we consider critical to our business operations and the understanding of our results of operations. This is neither a complete list of all of our accounting policies, nor does it include all the details surrounding the accounting policies we have identified. There are other accounting policies that are significant to us. For a more detailed discussion on the application of these and our other accounting policies, please refer to the footnotes to our consolidated financial statements included elsewhere in this Form 10-KSB. Revenue Recognition

We have not earned any revenue; however, we will recognize revenue from the provision of municipal solid waste (“MSW”) in the form of a tip fee paid by a trash hauler or landfill for each ton of MSW or other waste brought to us for processing. This revenue will be recognized as earned when the MSW or other waste is delivered to a BioGold facility for processing. We also will recognize revenue for the sale of outputs in the form of recycled metals, electricity, and fuels. This revenue will be recognized as earned when actual outputs are sold and delivered to the end customer.


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The Company is a development stage enterprise as that term is defined by the US Generally Accepted Accounting Principles. As such, we

have not generated any revenue to date and have not started our planned principal operations. Although the Company will continue to devote substantially all of its efforts to establishing itself, there can be no guarantee as to when or if revenue will be recognized. Operating Expenses

We have segregated our recurring operating expenses among two categories: (1) research and development, and (2) selling, general and administrative expenses. Sales expenses include advertising and promotional expenses, and travel expenses. Selling, general and administrative expenses include salaries and benefits for our executives, business development, human resources, finance, information technology staffing, advertising, and general operating expenses. General operating expenses include overall corporate expenses, such as rent, supplies, and corporate financial promotion activities. Based on our plans for future growth, we expect our selling, general and administrative costs to increase significantly in the future. Research and Development

Research and development expenses include research into new waste processing technologies, development of proprietary patents, and partnerships with third parties in developing new proprietary waste processing technologies. The technologies that we have licensed or otherwise have rights to have been under development for many years. When we generate substantial amounts of revenue, we will expand both the capabilities and capacity of our BioGold Process to maintain and expand our technology leadership; however, we do not anticipate any significant research and development expenses in the next 12 months.

Employees

The Company currently has 3 full time employees. The Company will likely need to hire additional staff between 1 and 20 employees in the next 12 months to execute its plans, depending upon what waste processing plants it may begin constructing. Off-Balance Sheet Arrangement

We are not a party to any off-balance sheet arrangements, and we do not engage in trading activities involving non-exchange traded contracts. Material Commitments for Capital Expenditures

We do not have any material commitments for capital expenditures at this time. If we are successful in building a waste to energy processing plant, we will have to enter into material commitments for the purchase of certain capital items for building the plants, which may be substantial and could range from $2,000,000 to $50,000,000 or more. Accounting for Stock Options and Warrants Granted to Employees and Non-Employees

In December 2004, the Financial Accounting Standards Board (“FASB”) issued a revision to Statement of Financial Accounting Standards (“SFAS”) No. 123R, Accounting for Stock-Based Compensation. This statement supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. This statement establishes standards for the accounting of transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. This statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. This statement does not change the accounting guidance for share-based payment transactions with parties other than employees provided in SFAS No. 123R. This statement does not address the accounting for employee share ownership plans, which are subject to the American Institute of Certified Public Accountants Statement of Position 93-6, Employers’ Accounting for Employee Stock Ownership Plans. We expect no changes to our financial reporting as a result of the application of the foregoing because we are already reporting and complying with the fair value method of SFAS No. 123R.


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Liquidity and Capital Resources

The following section discusses the effects of changes in our balance sheet and cash flow on our liquidity and capital resources:

Since Inception, we have incurred significant operating and net losses and have been unable to meet our cash flow needs with internally generated funds. Our cash requirements (primarily working capital requirements and cash for product development and licensing activities) have been satisfied through borrowings and the issuance of securities in a number of private placements. At December 31, 2007, we had cash and cash equivalents on hand of approximately $48,564, trading securities valued at $5,364, and a negative working capital position of $144,538. Although we have taken actions to reduce operating losses by reducing operating expenses and headcount, we may continue to generate losses in the near term. Our present financial position raises doubt about our ability to continue as a going concern. The consolidated financial statements included elsewhere in this Form 10-KSB do not include any adjustments that might result from the outcome of this uncertainty.

Although not reflected on our balance sheet for fiscal year ended December 31, 2007, the following transaction occurred subsequent to December 31, 2007 which affects the capital resources of the Company:

On March 3, 2008, BioGold Fuels Corporation, a Nevada corporation (“BioGold” or the “Company”) issued to Heritage Holding Group, LLC, a California limited liability company (“Lender”) a Senior Secured Promissory Note (the “Note”) in the principal amount of $550,000. The Note is due and payable on December 31, 2008. The Note bears interest at the rate of 15% per annum and the Lender receives a 10% origination fee on the Note, which is deducted from the payment of principal at the time the funds are disbursed. The Note was issued pursuant to a Senior Secured Note Purchase Agreement.

To secure the Note, the Lender has been granted a first priority interest in all of the assets of the Company pursuant to the terms and conditions of a Security Agreement dated March 3, 2008. The Note allows prepayment at any time to remove the security interest.

Although the Note provides $500,000 in net working capital, the proceeds from the Note may not be sufficient to satisfy the Company’s capital needs for the next 12 months and the Company may need to raise additional funds.

The complete terms and conditions of the foregoing transaction are set forth in the Note, Security Agreement, and Senior Secured Note Purchase Agreement, which are attached hereto as exhibits. Item 7. Financial Statements.

Our consolidated financial statements and consolidated footnotes thereto required to be included in Item 7 are set forth on page F-1 of this report.


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Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.

None. Item 8A. Controls and Procedures. Evaluation of Disclosure Controls and Procedures

We evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of December 31, 2007. Our principal executive and financial officers supervised and participated in the evaluation. Based on the evaluation, our principal executive and financial officers each concluded that our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s forms and rules as of December 31, 2007. However, the company and its management also identified areas requiring improvement as identified below. Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting can also be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management, including the chief executive officer and principal financial officer, concluded that we did not maintain appropriate internal control over financial reporting at December 31, 2007. In arriving at that conclusion, we considered the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and we did not performed a complete assessment as outlined in Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the Exchange Act .

In summary, as a result of our preliminary assessment of internal control over financial reporting under COSO criteria we identified the following material weaknesses as well as significant deficiencies that are expected to be remediated during the fiscal year 2008. Despite the existence of the findings, we believe that our consolidated financial statements contained in this Form 10-KSB filed with the SEC fairly present our financial position, results of operations and cash flows for the fiscal year ending December 31, 2007 and from the period from Inception (September 8, 2004) through December 31, 2007 in all material respects. In conjunction with this conclusion, our independent registered public accounting firm is not required to attest on our internal control for the fiscal year ended December 31, 2007.

As of December 31, 2007, the following material weaknesses where found in our internal control over financial reporting were identified: 1. The company did not conduct appropriate risk assessment or testing in 2007 to satisfy COSO requirements.


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2. We did not have sufficient segregation of duties over a variety of financial processes. 3. We did not formally document many of the reviews conducted by the financial department in the processing and preparation of the company financial statements. These processes include journal entries, account reconciliations, consolidations, equity reconciliations. As of December 31, 2007, the following significant deficiency was found in our internal control over financial reporting: 1. We do not have a Whistleblower contact setup.

We are not an “accelerated filer” for the 2007 fiscal year because we remain qualified as a “small business issuer.” Hence, under current law,

the internal controls certification and attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended, will not apply to us until the fiscal year ended December 31, 2008. Notwithstanding the fact that these internal control requirements do not apply to us at this time, our management has begun reviewing our internal control procedures to facilitate compliance with those requirements when they become applicable.

Changes in Internal Control Over Financial Reporting

In connection with our evaluation required by Exchange Act Rule 13a-15(b), there has been no change in our internal control over financial

reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 8A(T). Controls and Procedures.

MANAGEMENT RESPONSIBILITIES UNDER SECTION 404

Section 404 of the Sarbanes-Oxley Act requires management of a publicly traded company to issue an internal control report that explicitly accepts responsibility for establishing and maintaining “adequate” internal control over financial reporting. Management must also issue an assertion as to whether internal control over financial reporting is effective as of the end of the fiscal year. Further, the assessment is to be made at a specific point in time. Therefore, management’s assessment does not cover the entire year.

Management must comply with the following requirements in order for its registered public accounting firm (external auditor) to complete an audit of internal control over financial reporting:


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• Accept responsibility for the effectiveness of the entity's internal control over financial reporting;

• Evaluate the effectiveness of the entity's internal control over financial reporting using suitable control criteria;

• Support its evaluation with sufficient evidence, including documentation; and

• Present a written assessment of the effectiveness of the entity's internal control over financial reporting as of the end of the entity's most recent fiscal year.

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Management of BioGold is responsible for the preparation, consistency, integrity, and fair presentation of the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America applied on a consistent basis and, in management’s opinion, are fairly presented. The financial statements include amounts that are based on management’s informed judgments and best estimates.

As discussed above, our management, including the chief executive officer and principal financial officer, concluded that we did not maintain appropriate internal control over financial reporting at December 31, 2007. In arriving at that conclusion, we considered the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and we did not performed a complete assessment as outlined in Commission Guidance Regarding Management’s Report on Internal Control Over Financial Reporting Under Section 13(a) or 15(d) of the Exchange Act .

The Board of Directors exercises its oversight role with respect to the Company’s systems of internal control primarily through its Audit Committee, which is comprised solely of outside directors. The Committee oversees the Company’s systems of internal control and financial reporting to assess whether their quality, integrity, and objectivity are sufficient to protect shareholders’ investments.

The Company’s consolidated financial statements have been audited by PMB Helin Donovan Accounting Firm, independent auditors. As part

of its audit, PMB Helin Donovan Accounting Firm considers the Company’s internal control to plan the audit and determine the nature, timing, and extent of auditing procedures considered necessary to render its opinion as to the fair presentation, in all material respects, of the consolidated financial statements, which is based on independent audits made accordance with the standards of the Public Company Accounting Oversight Board (United States). Management’s assertion that the Company did not maintain effective internal control over financial reporting for financial presentations in conformity with accounting principles generally accepted in the United States of America has not been audited by PMB Helin Donovan. Management has made available to PMB Helin Donovan Accounting Firm all the Company’s financial records and related data, and information concerning the Company’s internal control over financial reporting, and believes that all representations made to PMB Helin Donovan Accounting Firm during its audits were valid and appropriate.

This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over

financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report . Changes in Internal Control Over Financial Reporting

In connection with our evaluation pursuant to paragraph (d) of Rule 240.13a-15 or Rule 240.15d-1, there has been no change in our internal

control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


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Item 8B. Other Information.

None.


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PART III

Directors and Executive Officers

As of March 31, 2008, the table below and following summary set forth the name, age and business experience of each of our directors and executive officers.

Steve Racoosin was a founder and director of Old BioGold since Inception. Mr. Racoosin was named Chief Executive Officer and Chairman of the Board on February 12, 2007. In 2002, Mr. Racoosin founded World Waste of America, Inc., which later became World Waste Technologies, Inc., a publicly traded waste-processing company. A high tech visionary, Mr. Racoosin brings over 30 years experience in energy development projects, landfill operations, and alternative waste solutions. Mr. Racoosin was the Founder and CEO/President of Full Circle Industries, Inc. Mr. Racoosin’s past research efforts include pressurized steam classification technologies for municipal solid waste in addition to biomass to liquid fuels and pyrolysis/gasification technologies. Mr. Racoosin’s background includes landfill land management activities with R. E. Wolfe enterprises and San Bernardino County. Mr. Racoosin has been a member of the International Union of Operation Engineers and the Iron Workers Union. Mr. Racoosin’s substantial experience in business includes project conception, finance, design, and construction giving him a broad range of knowledge in critical business processes involved in the conversion of waste to energy production and waste contract procurement experience. Mr. Racoosin has demonstrated and continues to demonstrate his commitment to the 'zero waste' concept.

Chris Barsness was elected as the Company’s Chief Financial Officer and Secretary on October 1, 2007. Mr. Barsness has served as a management, legal and financial consultant to the Company since May 2006, as well as serving as the Company’s Chief Financial Officer from July 5, 2006 to April 20, 2007. Mr. Barsness brings a wide variety of legal, finance, accounting, and management experience to the company. From January 2007 to December 2007, he served as in house counsel for Auriga Laboratories, Inc. a publicly traded pharmaceutical company. He is a licensed California attorney. From 2005-2006, he worked as an associate attorney in the employment and international departments of Adelson, Testan, & Brundo, a private law firm, in their San Bernardino, California office. From 2003-2005, he worked as an associate attorney for Grancell, Lebovitz, Stander, Barnes, & Reubens in their Riverside, California offices. From 2002-2003, he was the Chief Financial Officer and General Counsel for Mo-bility Inc., a private medical device manufacturer located in La Jolla, California. He also served as a consultant and controller for Mo-bility Inc. from 2000-2002. Currently, he is the sole partner at the Law Office of Chris Barsness, a private law firm located in Los Angeles, California that he formed in 2002. From 2005 until currently, he has served as the Chairman and CEO of Executive Estates Realty Group Inc., a private real estate company located in Los Angeles, California that he founded in 2005. He holds a Juris Doctor from the University of San Diego School of Law, a Masters in Business Administration, emphasis in Finance, from University of San Diego School of Business, and a Bachelor of Science from Arizona State University. He is also a licensed California real estate broker.


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Item 9. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act.

Name Age Position Steve Racoosin 55 Chief Executive Officer and Chairman of the Board Chris Barsness 35 Chief Financial Officer and Secretary

Walter Wendland 52 Director

Michael Ott 31 Director

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Walter Wendland was elected to the board of directors in April 2007. Mr. Wendland is the current president and CEO of Golden Grain Energy

LLC. Mr. Wendland, came to the ethanol industry with a diverse background in agriculture and manufacturing, centered on innovation and effective management. A lifelong farmer, operating a northeast Iowa farming operation for 31 years, Wendland coupled his agricultural pursuits with entrepreneurial enterprises and management positions within manufacturing that have developed a broad knowledge of the agricultural industry, skills as a supervisor and manager, and an ability to look for unique ways of improving efficiency and profitability. For 20 years, Wendland owned and operated a business selling grain byproducts as feed and nutrients for the livestock industry, providing an excellent foundation for understanding the challenges and importance of developing a strong market for the distillers grains produced as a co-product of the ethanol process. His manufacturing experience includes 15 years as a supervisor working with metal fabrication, creating experimental parts for John Deere and developing processing equipment for Cargill, ADM and Iams pet food. This experience in custom fabrication provided vital insight into the processing industry, in addition to requiring innovation and creative thinking to develop unique parts and equipment in the most efficient and cost-effective manner possible. For 10 years prior to joining Golden Grain Energy, Wendland also was manager and a partner in an 800 cow dairy in northeast Iowa, with responsibility for all aspects of operations, including management, animal health and nutrition. The skills and knowledge developed through these diverse experiences blended to meet the needs of a growing ethanol company, beginning in 2002 as a member of the steering committee that initiated the creation of Golden Grain Energy. Wendland was chosen in May 2002 to be chairman of the board and president of the company, spearheading the equity drive and development phase, and in October 2002 was appointed to serve as owner’s representative and construction manager as the plant was being built. In June 2004, Wendland stepped down from the board of directors to accept an appointment as company president and chief executive officer, and he has since led the company to surpass its production and profit goals and begin construction of an expansion that will more than double the potential capacity of the plant. In addition to his role within Golden Grain Energy, Wendland is active in promoting ethanol on local, state and national levels, as vice chairman of the Iowa Renewable Fuels Association and a member of the board of directors of the national Renewable Fuels Association. He also serves on the boards of the Renewable Products Marketing Group and the North Iowa Business and Industry.

On March 10, 2008, Michael Ott was elected to the board by a majority of existing board of directors. He serves as one of our independent directors. Mr. Ott is the Executive Director of BIOWA, a trade association and consulting group for biobased products. Headquartered in Iowa City, BIOWA connects researchers, farmers, investors and entrepreneurs to Grow the Bioeconomy(TM). Mr. Ott is also a board member of Practical Environmental Solutions, a biomass pelletizing company. He is a Governor of the American Biofuels Council and an advisory board member of the Clean Tech Law and Business Journal. Mr. Ott previously served as the director of Iowa BioDevelopment in Eddyville, IA. Mr. Ott has also authored a number of scientific papers related to the Emerging Bioeconomy and autocatalytic processes. He brings a well-featured background in publications, being the focus of over 50 stories in periodicals such as the Chicago Tribune, Des Moines Register, and Cedar Rapids Gazette. Mr. Ott was also named one of the Top 40 Under 40 Businesspeople in Iowa in 2007. Mr. Ott received his M.S. degree in Bioinorganic Chemistry from the University of Iowa and his Bachelor of Arts from Simpson College. Director Service and Compensation

All of our directors hold office until the next annual meeting of our stockholders or until they resign or are removed from office in accordance with our bylaws.


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Our non-employee directors do not receive any cash compensation, with the exception of reimbursement for any expenses incurred by them in

attending Board meetings. We have entered into indemnification agreements with each of our directors, which provides, among other things that we will indemnify each director, under certain circumstances, for defense expenses, damages, judgments, fines and settlements incurred by the director in connection with actions or proceedings to which he may be a party as a result of his position as a member of our Board, and otherwise to the full extent permitted under our bylaws and state law.

All executive offices are chosen by the Board and serve at the Board’s discretion. Board Committees

From time to time the Board appoints and empowers committees to carry out specific functions on behalf of the Board. The following describes the current committees of the Board and their members:

Audit Committee

Our Audit Committee consists of Messrs. Ott (Chairman) and Wendland. Our Board has instructed the Audit Committee to meet periodically with our management and independent accountants to, among other things, review the results of the annual audit and quarterly reviews and discuss the financial statements, select the independent accountants to be retained, and receive and consider the accountants’ comments as to controls, adequacy of staff and management performance and procedures in connection with audit and financial controls. The Audit Committee is also authorized to review related-party transactions for potential conflicts of interest. Each of the members of the Audit Committee of the Board are “independent” within the meaning of Rule 10A-3 of the Exchange Act, and each of the members are able to read and understand fundamental financial statements. The Board has not yet made a determination that Mr. Ott or Mr. Wendland meets the SEC’s definition of an “audit committee financial expert.” Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of our records, we are not aware of any of our officers, directors or beneficial owners of more than 10% of our securities that failed to timely file one or more reports disclosing beneficial ownership of our securities as required under Section 16(a) of the Exchange Act during the fiscal year ended December 31, 2007. Item 10. Executive Compensation.

The following section contains information about the compensation paid to our executive officers and directors during the “last completed fiscal year” (as that phrase is used in Item 402 of Regulation S-B promulgated under the Securities Act). For purposes of this section, the “last completed fiscal year” consists of the twelve month period ending December 31, 2007.


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Summary Compensation Table

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the persons who served as our Chief Executive Officer during the last fiscal year, along with all other executive officers whose total compensation exceeded $100,000.

(1) Mr. Racoosin was elected as the Company’s Chief Executive Officer on February 12, 2007 and is being paid based upon an annual salary of $275,000 per annum. Employment Agreements and Change of Control Provisions

None. Indemnification

Our certificate of incorporation provides that no officer or director shall be personally liable to us or our stockholders for monetary damages except as provided pursuant to Nevada law. Our bylaws and certificate of incorporation also provides that we shall indemnify and hold harmless each person who serves at any time as a director, officer, employee or agent of us from and against any and all claims, judgments and liabilities to which such person shall become subject by reason of the fact that he is or was a director, officer, employee or agent of us, and shall reimburse such person for all legal and other expenses reasonably incurred by him in connection with any such claim or liability. We also have the power to defend such person from all suits or claims in accordance with Nevada exclude any other right to which any such person may lawfully be entitled, and we may indemnify or reimburse such person in any proper case, even though not specifically provided for by our bylaws or certificate of incorporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.


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Name and Salary Bonus

StockAwards

Option Awards

All Other Compensation Total

Principal Position Year ($) ($) ($) ($) ($) ($)Steve Racoosin,

Chief Executive Officer (2) 2007 $243,783 $ - $ - - $ - $243,783

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Outstanding Equity Awards At Fiscal Year End

The following table generally sets forth the number of outstanding equity awards that have not been earned or vested or that have not been exercised for each named executive officer as of December 31, 2007:

Director Compensation

The following table sets forth information concerning the compensation of our directors during the year ended December 31, 2007:


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Option Awards Stock Awards

Equity

Incentive Plan Awards: Number of Number of Number Market Number of Securities Securities of Shares Value of Securities Underlying Underlying of Stock Shares of Underlying Unexercised Unexercised Option That Have Stock That Options Options Unearned Exercise Option Not Have Not Exercisable Unexercisable Options Price Expiration Vested VestedName (#) (#) (#) ($) Date (#) ($)Steve Racoosin,

Chief Executive Officer (1) — — — — — — — Chris Barsness,

Chief Financial Officer and Secretary (2)

1,145,896 — — $ 0.23 11/6/2016 — —

(1) Mr. Racoosin was appointed our Chief Executive Officer on February 12, 2007.

(2) Mr. Barsness was appointed our Chief Financial Officer and Secretary effective as of October 1, 2007. Mr. Barsness previously served as the

Company’s Chief Financial Officer from July 5, 2006 to February 12, 2007. Mr. Barsness was granted a non-statutory stock option to purchase 1,145,896 shares of our common stock, which option vested as follows: 1/3 of the shares vested immediately upon grant and the remaining shares vested on April 1, 2007. The options are exercisable at $0.23 per share.

Fees Earned or Stock Option All Other

Paid in Cash Awards (1) Awards (1)

Compensation Total Name ($) ($) ($) ($) ($) Steve Racoosin (2) $ 243,783 $ $ — $ 243,783(3) — $ $ — $ —

(1) Based upon the aggregate grant date fair value computed in accordance with FAS No. 123R (revised 2004), Share-Based Payment.

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Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 31, 2008 by: (i) each stockholder who is known by us to own beneficially more than five percent of our outstanding common stock; (ii) each member of our Board; (iii) the named executive officers; and (iv) all of our current executive officers and directors as a group.

The number of shares and the percentage of shares beneficially owned by each such person or entity, as set forth below, include shares of common stock that such person or group has the right to acquire on or within sixty days after March 31, 2008 pursuant to the exercise of warrants or options for the conversion of convertible securities.


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(2) Mr. Racoosin was not appointed as Chief Executive Officer and Chairman until February 12, 2007 and earned fees based upon his position as Chief Executive Officer and not as compensation for service on the board of directors.

(3) All other directors have not received any form of compensation for the year ended December 31, 2007.

Shares Beneficially Owned (1)Name Common Stock PercentageSteve Racoosin (2) 14,147,541 19%Walter Wendland 1,418,324 2%Michael Ott 0 *%Chris Barsness (3) 4,354,405 6% All Executive Officers and Directors as a Group (4 persons) 19,920,270 27%

* Less than 1% (1) Applicable percentage of ownership is based upon 75,035,233 shares of our common stock outstanding as of March 31, 2008. Beneficial

ownership is determined in accordance with the rules of the SEC and includes voting and investment power with respect to shares shown as beneficially owned. Shares of common stock subject to warrants currently exercisable or exercisable within 60 days of March 31, 2008 are deemed outstanding for computing the shares and percentage ownership of the person or entity holding such warrants or convertible securities, but are not deemed outstanding for computing the percentage ownership of any other person or entity.

(2) Consists of: 14,147,541 shares of common stock owned by One World Zero Waste, LLC, of which Mr. Racoosin is the beneficial owner as sole

manager and member. (3) Consists of: 3,208,509 shares of common stock owned by Mr. Barsness and 1,145,896 shares issuable upon exercise of an option to purchase

common stock that is currently exercisable.

34

Item 12. Certain Relationships and Related Transactions, and Director Independence. Chris Walton is a major shareholder, director, officer, or former director or officer of the following companies: Full Circle Industries, Inc., Gemini Environmental, and Hudson & Co., LLC. Phil Pesin is a major shareholder, director, officer, or former director or officer of the following companies: Auriga Laboratories, Inc., Aquoral Finance Corp, LLC, Full Circle Industries, Inc. and Sorrento Financial Group. BioGold Fuels Corporation is a renewable energy company incorporated in the state of Nevada and is publicly traded. Aquoral Finance Corp, LLC is a private finance firm in which Phil Pesin is a manager or member. Auriga Laboratories is a pharmaceutical company incorporated in the state of Delaware and is publicly traded. Gemini Environmental is an environmental solutions company that is privately owned, Sorrento Financial Group a consulting service provider which is beneficially owned by Phil Pesin, and Hudson & Co. is a consulting service provider owned by Chris Walton. Transactions:

The Company treated the Auriga stock as trading securities in accordance with SFAS 115, “Accounting for Certain Investments in Debt and Equity Securities.” In the year ending December 31, 2007, the Company recorded an $106,803 realized loss and $5,069 realized gain from the sale of Auriga stock. The Company received approximately $370,000 from the sale of Auriga stock and recorded an $68,600 unrealized loss on investment for the decline in fair market value of the remaining 134,076 shares of Auriga stock held by the Company at December 31, 2007. The technology transfers have no readily ascertainable value and were not valued as part of these transactions. The patent application transferred to Gemini had no book value and a fair market value for the license agreement with Gemini could not be determined. The above described transactions were measured at the fair market value of the Auriga stock.


38

1. On December 20, 2006 the Company entered into a 24 month secured convertible promissory note with Gemini Environment for $110,000. On August 31, 2007, pursuant to the terms of the note, the Company converted the balance due on the note into 335,500 shares of preferred stock in Gemini. On December 10, 2007, the Company entered into an agreement with Gemini to return the 335,500 shares of Gemini stock to Gemini for cancellation in exchange for Gemini waiving four years of annual maintenance payments under the Gemini License.

2. On December 24, 2006 the Company invested $93,750 in Aquoral Finance Corp for a ¾ membership interest and a warrant to purchase 93,750 shares of common stock of Auriga Laboratories. On February 12, 2007, Phil Pesin and another shareholder of the Company exchanged 325,000 shares of Auriga common stock in consideration for the Company’s transferring a municipal solid waste technology patent application and prototype to Gemini, which Gemini then licensed back to the Company. In addition, the Company transferred its ¾membership interest in Aquoral and the warrant to purchase 93,750 shares of common stock of Auriga to Gemini.

3. On June 20, 2007, BioGold purchased 80,000 share of Auriga common stock for $100,000.

4. During the year ended December 31, 2007, the Company entered into a promissory note receivable for $125,000 with Auriga and entered into a promissory note receivable for $123,959 with Gemini. During the year ended December 31, 2007, Gemini repaid the note and the Company received 150,000 shares of Auriga common stock as payment for the other note balances.

35

Other transactions On September 1, 2006, The Company entered into a consulting agreement with Hudson & Co. for financial services to be provided at $15,000 per month. On February 12, 2007 Hudson & Co. terminated its agreement and the Company has no further liability for this agreement. On March 15, 2005, the Company entered into an advisory agreement with Sorrento Financial Group for $15,000 per month. In addition, the Company was obligated to pay $500,000 for achievement of certain financial milestones. In lieu of the $500,000 payment, the Company repurchased $500,000 of BioGold’s common stock held by Phil Pesin. The fair value of the stock was determined by the Company’s most recent private placement of $1 per share. On February 12, 2007, all service agreements with Sorrento were cancelled and the Company has no further liability.

We believe that all of the transactions set forth above were made on terms no less favorable to us than could have been obtained from

unaffiliated third parties. We intend that all future transactions with affiliated persons be approved by a majority of the Board, including a majority of the independent and disinterested outside directors on the Board, and be on terms no less favorable to us than could be obtained from unaffiliated third parties.


39

36

Item 13. Exhibits.

# Filed herewith.


40

Exhibit Number

Description of Exhibit 2.1 Agreement and Plan of Merger by and between BioGold Fuels Corporation, BioGold Acquisition, Inc. and Full Circle Industries,

Inc., dated April 20, 2007. #

2.2 Certificate of Merger of BioGold Acquisition, Inc. into Full Circle Industries, Inc., dated April 20, 2007.#

2.3 Agreement and Plan of Merger by and between BioGold Fuels Corporation, Cab-tive Advertising, Inc. and Cab-tive Acquisition, Inc., dated October 25, 2007 (1)

2.4 Articles of Merger of Cab-tive Acquisition, Inc. and BioGold Fuels Corporation, dated October 25, 2007.(2)

3.1 Articles of Incorporation of the Registrant. (3)

3.2 Bylaws of the Registrant. (4)

3.3 Certificate of Change to Articles of Incorporation Pursuant to NRS 78.209 (5).

3.3 Certificate of Amendment to Articles of Incorporation dated November 26, 2007. (6)

4.1 Full Circle 2004 Stock Option Plan. #

4.2 BioGold Fuels 2008 Equity Incentive Plan. (7)

4.7 Form of Common Stock Option granted to Chris Barsness. #

10.1 License Agreement between Full Circle Industries, Inc. and Gemini Environmental Corporation. (8)

10.2 Form of Subscription Agreement. #

10.3 Form of Indemnification Agreement (9)

10.4 License Agreement between Full Circle Industries, Inc. and MSW Patents, Inc.#

10.5 License Agreement between Full Circle Industries, Inc. and BioProducts International.#

10.6 Senior Secured Promissory Note dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC

(10).

10.7 Senior Secured Note Purchase Agreement dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC (11).

10.8 Security Agreement dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC (12).

14.1 Code of Ethics (13).

21.1 Subsidiaries.#

31.1 Certification of the Registrant’s Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended.#

31.2 Certification of the Registrant’s Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.#

32.1 Certification of the Registrant’s Principal Executive Officer pursuant to 18 U.S.C. § 1350.#

32.2 Certification of the Registrant’s Principal Financial Officer pursuant to 18 U.S.C. § 1350.#

(1) Incorporated herein by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 18, 2006, reporting an event dated May 17, 2006.

37


41

(2) Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange Commission on October 26, 2007.

(3) Incorporated by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange

Commission on November 1, 2007. (4) Incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form SB-2 filed with the Securities and Exchange

Commission on November 21, 2006. (5) Incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form SB-2 filed with the Securities and Exchange

Commission on November 21, 2006. (6) Incorporated by reference to Exhibit 3.1 on the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange

Commission on October 19, 2007. (7) Incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange

Commission on February 8, 2008. (8) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange

Commission on November 1, 2007. (9) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange

Commission on October 26, 2007. (10) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange

Commission on March 5, 2008. (11) Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange

Commission on March 5, 2008. (12) Incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange

Commission on March 5, 2008. (13) Incorporated by reference to Exhibit 14 of the Registrants Annual Report on Form 10-KSB filed with the Securities and Exchange

Commission on April 12, 2007.

38

Item 14. Principal Accountant Fees and Services.

The Audit Committee selected PMB Helin Donovan, an independent registered public accounting firm, as our independent auditors for the year ended December 31, 2007. The following table sets forth fees for professional services rendered by PMB Helin Donovan for the audit of our financial statements as of and for the year ended December 31, 2007 and the period from Inception through December 31, 2007.

Audit Committee Pre-Approval Policies

Rules adopted by the SEC in order to implement requirements of the Sarbanes-Oxley Act of 2002, as amended, require public company audit committees to pre-approve audit and non-audit services. Effective as of October 25, 2007, our Audit Committee has adopted a policy for the pre-approval of all audit, audit-related and tax services, and permissible non-audit services provided by our independent auditors. The policy provides for an annual review of an audit plan and budget for the upcoming annual financial statement audit, and entering into an engagement letter with the independent auditors covering the scope of the audit and the fees to be paid. Our Audit Committee may also from time-to-time review and approve in advance other specific audit, audit-related, tax or permissible non-audit services. In addition, our Audit Committee may from time-to-time give pre-approval for audit services, audit-related services, tax services or other non-audit services by setting forth such pre-approved services on a schedule containing a description of, budget for and time period for such pre-approved services. The policies require our Audit Committee to be informed of each service and the policies do not include any delegation of our Audit Committee’s responsibilities to management. Our Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated will report any pre-approval decisions to our Audit Committee at its next scheduled meeting.

During the year ended December 31, 2007, our Audit Committee approved 100% of the total fees that were paid to PMB Helin Donovan. Our Audit Committee has determined that the rendering of all other non-audit services by PMB Helin Donovan is compatible with maintaining PMB Helin Donovan’s independence. During the year ended December 31, 2007, none of the total hours expended on our financial audit by PMB Helin Donovan were provided by persons other than PMB Helin Donovan’s full-time permanent employees.


42

September 8, 2004 Year Ended (INCEPTION) December 31, To December 31, 2007 2007 Audit Fees (1) $ 31,000 $ 41,000All Other Fees (2) — —

Total $ 31,000 $ 41,000

(1) Represents fees for professional services provided in connection with the audit of our financial statements for the fiscal periods presented and the review of our year end financial statements through December 31, 2007.

(2) Represents fees for professional services and advice provided. No other fees, audit related fees, or tax fees were paid relating to the audit

period through the year ended December 31, 2007 or inception to December 31, 2007.

39

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized. Dated: April 9, 2008.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the

capacities and on the dates indicated:


43

BIOGOLD FUELS CORPORATION.

By: /s/ Steve Racoosin

Name:Steve Racoosin Title: Chief Executive Officer and

Chairman of the Board of Directors

Signature Title Date

/s/ Steve Racoosin Chief Executive Officer (principal executive officer) and

Chairman of the Board of Directors April 9, 2008

Steve Racoosin /s/ Chris Barsness Chief Financial Officer (principal accounting and financial

officer) & Secretary April 9, 2008

Chris Barsness /s/ Walter Wendland Director April 9, 2008Walter Wendland /s/ Michael Ott Director April 9, 2008Michael Ott

40

EXHIBIT INDEX


44

Exhibit Number

Description of Exhibit 2.1 Agreement and Plan of Merger by and between BioGold Fuels Corporation, BioGold Acquisition, Inc. and Full Circle Industries,

Inc., dated April 20, 2007. #

2.2 Certificate of Merger of BioGold Acquisition, Inc. into Full Circle Industries, Inc., dated April 20, 2007.#

2.3 Agreement and Plan of Merger by and between BioGold Fuels Corporation, Cab-tive Advertising, Inc. and Cab-tive Acquisition, Inc., dated October 25, 2007 (1)

2.4 Articles of Merger of Cab-tive Acquisition, Inc. and BioGold Fuels Corporation, dated October 25, 2007.(2)

3.1 Articles of Incorporation of the Registrant. (3)

3.2 Bylaws of the Registrant. (4)

3.3 Certificate of Change to Articles of Incorporation Pursuant to NRS 78.209 (5).

3.3 Certificate of Amendment to Articles of Incorporation dated November 26, 2007. (6)

4.1 Full Circle 2004 Stock Option Plan. #

4.2 BioGold Fuels 2008 Equity Incentive Plan. (7)

4.7 Form of Common Stock Option granted to Chris Barsness. #

10.1 License Agreement between Full Circle Industries, Inc. and Gemini Environmental Corporation. (8)

10.2 Form of Subscription Agreement. #

10.3 Form of Indemnification Agreement (9)

10.4 License Agreement between Full Circle Industries, Inc. and MSW Patents, Inc.#

10.5 License Agreement between Full Circle Industries, Inc. and BioProducts International.#

10.6 Senior Secured Promissory Note dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC

(10).

10.7 Senior Secured Note Purchase Agreement dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC (11).

10.8 Security Agreement dated March 3, 2008 by and between BioGold Fuels Corporation and Heritage Holding Group, LLC (12).

14.1 Code of Ethics (13).

21.1 Subsidiaries.#

31.1 Certification of the Registrant’s Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended.#

31.2 Certification of the Registrant’s Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.#

32.1 Certification of the Registrant’s Principal Executive Officer pursuant to 18 U.S.C. § 1350.#

32.2 Certification of the Registrant’s Principal Financial Officer pursuant to 18 U.S.C. § 1350.#

# Filed herewith.

(1) Incorporated herein by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 18, 2006, reporting an event dated May 17, 2006.

41


45

(2) Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange Commission on October 26, 2007.

(3) Incorporated by reference to Exhibit 2.2 of the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange Commission on November 1, 2007.

(4) Incorporated by reference to Exhibit 3.1 of the Registrant’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006.

(5) Incorporated by reference to Exhibit 3.2 of the Registrant’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on November 21, 2006.

(6) Incorporated by reference to Exhibit 3.1 on the Registrant’s Current Report on Form 8-k filed with the Securities and Exchange Commission on October 19, 2007.

(7) Incorporated by reference to Exhibit 4.1 of the Registrant’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on February 8, 2008.

(8) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange Commission on November 1, 2007.

(9) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange Commission on October 26, 2007.

(10) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-k, filed with the Securities and Exchange Commission on March 5, 2008.



(13) Incorporated by reference to Exhibit 14 of the Registrants Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on April 12, 2007.

42

INDEX TO FINANCIAL STATEMENTS

Consolidated Financial Statements of BioGold Fuels Corporation

December 31, 2007


46

Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheet as of December 31, 2007 F-3 Consolidated Statements of Operations for the Twelve Months Ended December 31, 2007 and for the Period from September 8,

2004 (Inception) to December 31, 2007 F-4 Consolidated Statement of Stockholders’ Equity for the Twelve Months Ended December 31, 2007 and for the Period from

September 8, 2004 (Inception) to December 31, 2007 F-6 Consolidated Statements of Cash Flows for the Twelve Months Ended December 31, 2007 and for the Period from September 8,

2004 (Inception) to December 31, 2007 F-5 Notes to Consolidated Financial Statements F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying balance sheet of BioGold Fuels Corporation as of December 31, 2007, and the related statements of

operations, stockholders’ deficit and cash flows from September 8, 2004 (inception) to December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioGold Fuels Corporation as of December 31, 2007 and the results of its operations, stockholders’ deficit and its cash flows for the period from September 8, 2004 (inception) to December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the accompanying consolidated financial statements, the Company has no revenues and has sustained losses since inception. For the years ended December 31, 2007 and 2006 the Company experienced losses of approximately $1,371,346 and $2,734,418 respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans as to this matter are described in Note 4. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ PMB Helin Donovan Certified Public Accountants Spokane, Washington April 9, 2008


47

F-2


48

BioGold Fuels Corporation (A Development Stage Company) Consolidated Balance Sheet December 31, 2007

December 31, 2007Assets Current Assets

Cash and cash equivalents $ 48,564 Trading securities 5,364

Total Current Assets 53,928

Total Assets $ 53,928

Liabilities Current Liabilities

Accounts payable $ 47,360 Accrued salaries & related benefits 151,105 Total Current Liabilities 198,465

Stockholders' Equity

Common stock $0.001 par value; 700,000,000 shares authorized; 74,923,233 issued and outstanding 74,925

Additional paid-in capital 9,159,444

Accumulated deficit during development stage (9,378,906)

Total Stockholders' Equity (144,537)Total Liabilities & Stockholders' Equity $ 53,928

The accompanying notes are an integral part of these financial statements.

F-3



49

BioGold Fuels Corporation (A Development Stage Company) Consolidated Statements of Operations

Year-Ended December 31,

2007

Year-Ended December 31,

2006

From inception (September 8,

2004) to December 31,

2007 Revenue $ - $ - $ -

Expenses

Research & development expense - 14,615 703,738Selling, general, & administrative 1,208,264 2,814,737 8,607,442

Operating Loss (1,208,264) (2,829,352) (9,311,180)

Other Income (Expenses)

Other income - 95,734 96,505Realized gain on trading securities 5,069 - 5,069Interest income 14,774 - 14,774Realized loss on trading securities (106,803) - (106,803)Unrealized loss on trading securities (68,600) - (68,600)Other expense (4,818) - (5,167)

Total Other Income (Expenses) (160,378) 95,734 (64,222)

Loss before tax (1,368,642) (2,733,618) (9,375,402) Income tax expense (2,704) (800) (3,504)

Net Loss $ (1,371,346) $ (2,734,418) (9,378,906)

Net Loss Per Common Share

Basic $ (0.03) $ (0.07)

Weighted Average Number of Outstanding Common Shares Basic and diluted 51,565,752 37,145,344

F-4


50

BioGold Fuels Corporation (A Development Stage Company) Consolidated Statement of Cash Flows

From inception

Year Ended Year Ended

(September 8, 2004)

December 31, December 31, to December 31, 2007 2006 2007 Net Loss $ (1,371,346) $ (2,734,418) $ (9,378,906) Cash Flows Provided By (Used In) Operating Activities

Adjustments to reconcile net loss to net cash used Common stock issued for services - 500,000 500,000 Preferred stock issued for services - 120,000 120,000 Warrants & options expense for consultants & employees 555,836 714,171 4,844,416 License impairment expense - - 242,500 Depreciation and amortization expense 1,003 7,061 8,471 Impaired asset expense 18,387 - 18,387 Gain on sale of assets to related party (5,000) - (5,000) Net loss on trading securities, realized 101,734 - 101,734 Net loss on trading securities, unrealized 68,600 - 68,600 Increases (decreases) in accounts payable (66,464) 112,342 47,360 Increase in other current liabilities 84,169 10,351 151,105 Decrease in other current assets - 2,500 - Decrease in prepaid expenses 9,768 10,232 -

Total Cash Flow Used By Operating Activities (603,313) (1,257,761) (3,281,334) Cash Flows Provided By (Used In) Investing Activities

Purchase of fixed assets - (121,988) (124,436) Purchase of fixed assets from related party (25,000) - (25,000) Proceeds from sale of trading securities 370,554 - 370,554 Increase in note receivable from related party - (110,000) (110,000) Loans to related parties (248,959) - (248,959) Repayment by related party on note receivable 104,191 - 104,191 Restricted cash 170,257 (170,257) - Sale of fixed assets to related party 30,000 - 30,000 Purchase of trading securities in related party (100,000) (93,709) (193,709)

Total Cash Flow Provided By Investing Activities 301,043 (495,954) (197,359) Cash Flows Provided By (Used In) Financing Activities

Sale of common stock 79,950 - 1,707,450 Sale of preferred stock - 2,530,423 2,680,423 Exercise of warrants - - 4,682 Receipt of subscription receivable 200,000 - 200,000 Repurchase of common stock (158) (550,000) (550,158) Payment of stock sale funding fee - (265,140) (515,140)

Total Cash Flows Provided By Financing Activities 279,792 1,715,283 3,527,257 Change in Cash and Cash Equivalents (22,478) (38,432) 48,564 Cash and cash equivalents at beginning of year 71,042 109,474 -Cash And Cash Equivalents At End of Year $ 48,564 $ 71,042 48,564

Other Supplemental Information

Taxes paid 2,704 800 3,504 Non-Cash Investing and Financing Activities

Subscription receivable $ - $ 200,000 Non-cash decrease in note receivable from related party 110,000 -


F-5


51

BioGold Fuels Corporation (A Development Stage Company) Consolidated Statement of Shareholders' Equity

Common Stock Preferred Stock Additional Total

Shares

Par value Shares

Par value

Paid-In Capital

AccumulatedDeficit

Stockholders'Equity

Inception- September 8, 2004 - $ - - $ - $ - $ - $ - Net loss for period - - - - - (816,537) (816,537) Warrants issued - - - - 535,370 - 535,370 Common stock issued for cash at $0.25/share 2,060,000 21 - - 514,979 - 515,000 Issuance of shares to founders at $0.00001 per share 19,187,500 192 - - - - 192 Balance- December 31, 2004 21,247,500 213 - - 1,050,349 (816,537) 234,025 Net loss for period - - - - - (4,456,605) (4,456,605) Option & warrant issuances - - - - 3,039,042 - 3,039,042 Warrants exercised 468,200 5 - - 4,677 - 4,682 Common stock issued for cash

at $0.25/share 1,658,000 17 - - 414,484 - 414,501 Shares cancelled (2,000,000) (20) - - 20 - - Issuance of shares to acquire IWP Inc. 970,000 10 - - 242,490 - 242,500 Finder's fee for common stock sales - - - - (400,000) - (400,000) Common stock issued for cash at $1.00 per share 698,000 7 - - 697,993 - 698,000 Preferred stock issued for cash at $1.00 per share - - 150,000 2 149,998 - 150,000 Balance- December 31, 2005 23,041,700 232 150,000 2 5,199,053 (5,273,142) (73,855) Net loss for period - - - - - (2,734,418) (2,734,418) Options & warrants issued - - - - 714,171 - 714,171 Common stock repurchase &

retirement (600,000) (6) - - (549,994) - (550,000) Shares reissued upon reverse of

stock cancellation 1,500,000 15 - - (15) - - Finder's fee for Preferred stock sales - - - - (115,140) - (115,140) Subscription receivable - - 200,000 2 199,998 200,000 Common Stock issued for services 500,000 5 - - 499,995 - 500,000 Preferred Stock issued for services - - 120,000 1 119,999 - 120,000 Preferred stock issued for cash

at $1.00 per share - - 2,530,423 25 2,530,398 - 2,530,423 Balance- December 31, 2006 24,441,700 $ 246 3,000,423 $ 30 $ 8,598,465 $ (8,007,560)$ 591,181 Net loss for period - - - - - (1,371,346) (1,371,346) Options issued - - - - 555,836 - 555,836 Cancellation of common stock (1,000,000) (10) - - 10 - - Effect of the BioGold Merger,

Exchange, and Conversion 29,442,546 294 (3,000,423) (30) (264) - - Effect of the Cab-tive Merger,

and Exchange 21,908,987 74,265 - - (74,265) - - Common stock repurchase

from dissenters (30,000) (30) - - (128) - (158) Common stock issued for cash

at $0.50 per share 160,000 160 - - 79,790 - 79,950 Balance- December 31, 2007 74,923,233 $ 74,925 - $ - $ 9,159,444 $ (9,378,906)$ (144,537)

F-6

Note 1. COMPANY OVERVIEW AND BASIS OF PRESENTATION BioGold Fuels Corporation (“BioGold” or the “Company”) is a renewable energy company that focuses on converting various forms of municipal solid waste (“MSW”) into usable forms of fuel and energy, effectively utilizing all components of MSW to reduce the amount of MSW ending up in landfills to as close to zero as possible. BioGold’s strategy combines both a “front-end” process and a “back-end” process. This combination of technologies under one roof is revolutionary in the trash processing industry. On the front-end, BioGold uses autoclave technology to sort and process MSW as it is brought in from trash hauling companies or landfills. BioGold receives a “tip fee” to receive the MSW, resulting in one revenue stream. The back-end utilizes several technologies to convert the MSW into a synthetic diesel fuel, ethanol, or energy that BioGold then sells to end users, thus creating a second revenue stream. Any remaining plastics, metals, or other material that cannot be converted into fuel or energy are sold as individual components, such as aluminum, which has been processed into a more readily usable form. This creates a third revenue stream. The Company plans to market its bio-refinery to municipalities, local governments, and private industry. The BioGold bio-refinery will be built by the Company utilizing our technologies to process many forms of waste, from construction debris and municipal solid waste to medical waste and green waste. Each bio-refinery is tailored to fit the needs of the client for the processing of the various forms of waste and the required byproducts from the processing of the waste that make the most sense from a revenue perspective, whether that be synthetic diesel, ethanol, acetic acid, or electricity. The accompanying consolidated financial statements include the accounts of BioGold Fuels Corporation (formerly known as Cab-tive Advertising, Inc. (“Cab-tive”)), and its wholly owned subsidiaries, BioGold Operations, Inc., Full Circle Industries, Inc. (“Full Circle”), and FCWS LLC (“FCWS”) (collectively, the “Company”). All significant inter-company accounts and transactions have been eliminated upon consolidation. In the opinion of management, all adjustments, which consist of only normal recurring adjustments to present fairly the financial position at December 31, 2007 and the results of operations, stockholders’ deficit and cash flows for the twelve months ended December 31, 2007 and for the twelve months ended December 31, 2006, have been made. The Company is a development stage enterprise as defined in SFAS No 7. Note 2. BIOGOLD FUELS CORPORATION REVERSE MERGER. On April 20, 2007, Full Circle Industries, Inc., a Nevada corporation (“Full Circle”) completed a merger (the “BioGold Merger”) with BioGold Fuels Corporation, a Nevada corporation (“BioGold”). The BioGold Merger was effected pursuant to the terms of an Agreement and Plan of Merger (“BioGold Merger Agreement”), entered into on April 20, 2007, by and among Full Circle, BioGold, and BioGold Acquisition Inc., a newly-formed Nevada corporation and wholly-owned subsidiary of BioGold (the “Subsidiary”). Pursuant to the terms of the BioGold Merger Agreement, the Subsidiary was merged with and into BioGold, with Full Circle as the surviving entity and wholly owned subsidiary of BioGold. Full Circle continued its business under the name of BioGold Fuels Corporation as a subsidiary of BioGold. All references to Full Circle or the Company also refer to BioGold, unless the context indicates otherwise. The Company entered into the BioGold Merger to obtain the assistance of the BioGold shareholders in raising capital and providing business development guidance. Pursuant to the terms of the BioGold Merger, BioGold acquired all of the outstanding shares of Common and Preferred Stock of Full Circle (“Full Circle Stock”) in exchange for shares of Common Stock, par value $0.0001 per share of BioGold (“BioGold Stock”). At the closing of the Merger (the “Closing”), each outstanding share of Full Circle Stock held by the stockholders of Full Circle (the “Full Circle Stockholders”) was converted into the right to receive 1 share of BioGold Stock, and each of the outstanding option and warrant to purchase shares of Full Circle Stock was assumed by BioGold and converted into an option or warrant to purchase 1 share of BioGold Common Stock (“Common Stock”) for each one share convertible into BioGold Common Stock pursuant to such option or warrant.


52

F-7

Accordingly, immediately following the closing, the Full Circle Stockholders owned 26,442,123 shares of BioGold Stock and held 2,553,000 warrants or options to purchase BioGold Stock. Due to the change in control of BioGold as a result of the BioGold Merger, the BioGold Merger was accounted for as an acquisition of BioGold by Full Circle and a recapitalization of Full Circle. Accordingly, the consolidated financial statements of the Company subsequent to the BioGold Merger consist of the balance sheets of both companies at historical cost, the historical operations of Full Circle, and the operations of both companies from the BioGold Merger date of April 20, 2007. At the time of the BioGold Merger, BioGold was a shell company and had no material assets, liabilities or operations. Note 3. CAB-TIVE ADVERTISING, INC. REVERSE MERGER. On October 25, 2007 BioGold Fuels Corporation, a privately-held Nevada corporation (“BioGold”) completed a merger (the “Cab-tive Merger”) with Cab-tive Advertising, Inc., a “shell” company organized under the laws of the State of Nevada (“Cab-tive”). The Merger was effected pursuant to the terms of an Agreement and Plan of Merger (“Merger Agreement”), entered into on October 24, 2007, by and among BioGold, Cab-tive, and Cab-tive Acquisition Inc., a newly-formed Nevada corporation and wholly-owned subsidiary of Cab-tive (the “Subsidiary”). Pursuant to the terms of the Merger Agreement, the Subsidiary was merged with and into BioGold, with BioGold as the surviving entity. BioGold continued its business under the name of BioGold Fuels Corporation as a subsidiary of Cab-tive. All references to Cab-tive or the Company also refer to BioGold, unless the context indicates otherwise. The Company entered into the Cab-tive Merger to allow for the public trading of its securities on the over the counter bulletin board, which was intended to provide increased liquidity for existing shareholders and increase the ability of the Company to raise additional capital. Pursuant to the terms of the Cab-tive Merger, Cab-tive acquired all of the outstanding shares of Common Stock of BioGold (“BioGold Common Stock”) in exchange for shares of Common Stock, par value $0.001 per share of Cab-tive (“Cab-tive Stock”). At the closing of the Merger (the “Closing”), each outstanding share of BioGold Common Stock held by the stockholders of BioGold (the “BioGold Stockholders”) was converted into the right to receive approximately 1.527 shares of Cab-tive Stock, and each outstanding option and warrant to purchase shares of BioGold Common Stock was assumed by Cab-tive and converted into an option or warrant to purchase approximately 1.527 shares of BioGold Common Stock (“Common Stock”) for each one share convertible into BioGold Common Stock pursuant to such option or warrant (with the exercise price being adjusted accordingly). Accordingly, immediately following the closing, the BioGold Stockholders owned 54,563,233 shares of Cab-tive Stock and held 3,900,631 warrants or options to purchase Cab-tive Stock. The 20,200,000 shares of Cab-tive Stock outstanding prior to the Merger remained outstanding following the Merger. As of the closing, the BioGold Stockholders owned approximately 73% of the total 74,763,233 outstanding shares of Cab-tive Stock (or 78%, assuming exercise in full of the outstanding BioGold options and warrants that were assumed by Cab-tive in connection with the Merger), and the remaining stockholders of Cab-tive owned approximately 27% of the total outstanding shares of Cab-tive Stock (or 22%, assuming exercise in full of the outstanding BioGold options and warrants that were assumed by Cab-tive in connection with the Merger). On November 9, 2007, Cab-tive’s board of directors and majority shareholders voted to approve the change in name from Cab-tive Advertising, Inc. to BioGold Fuels Corporation. On December 19, 2007, Cab-tive Advertising, Inc. changed its name to BioGold Fuels Corporation and the prior subsidiary Nevada corporation named BioGold Fuels Corporation changed its name to BioGold Operations, Inc. which remains as a wholly owned subsidiary of BioGold Fuels Corporation.


53

F-8

Due to the change in control of Cab-tive as a result of the Merger, the Merger was accounted for as an acquisition of Cab-tive by BioGold and a recapitalization of BioGold. At the time of the Cab-tive Merger, Cab-tive was a shell company and had no material assets, liabilities, or operations; therefore, the Company’s consolidated financial statements subsequent to the Cab-tive Merger consist of the balance sheet, statement of operation, cash flow statements, and statements of stockholder’s equity of BioGold with adjustment for the additional common stock issued pursuant to the Cab-tive Merger and the historical operations of BioGold prior to the Cab-tive Merger date of October 25, 2007. The foregoing transactions are more fully described in that certain Form 8-K filed by the Company with the Securities and Exchange Commission on October 29, 2007. Note 4. GOING CONCERN The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has no revenues and has sustained losses since inception. The Company expects to incur substantial additional costs and capital expenditures through the initial year of continuing research and development of additional waste processing technologies. The ability to continue research and development of additional waste processing technologies may require obtaining additional funding. If this funding is not obtained, the Company may be unable to continue. The Company intends to raise additional debt and/or equity financing to sustain its operations and to complete its capital expenditures, although there can be no assurance that it will be able to raise such funds on terms acceptable to the Company, or at all. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to obtain additional financing, and ultimately to attain successful operations. At December 31, 2007, the Company’s current operations utilize approximately $30,000 per month. Unless significant revenue is generated, the Company will need to raise at least $700,000 in order to satisfy its cash needs for the next fiscal year. Note 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The consolidated financial statements and consolidated notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of these consolidated financial statements. Estimates The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.


54

F-9

Advertising Advertising expenses consist primarily of costs incurred in the design, development, and printing of Company literature and marketing materials. The Company expenses all advertising expenditures as incurred. The Company's advertising expenses were $0 and $12,940 for the years ended December 31, 2007 and December 31, 2006, respectively. Basis of Presentation The accompanying consolidated financial statements are prepared in accordance with the generally accepted accounting principles in the United States of America. The Company is a new enterprise in the development stage as defined by Statement No. 7 “Accounting and Reporting by Development Stage Enterprises," of the Financial Accounting Standards Board, since it has derived no revenues from its activities to date. Cash & Cash Equivalents The Company treats any highly liquid investments with a maturity of three months or less as cash equivalents in the statement of cash flows. The Company had no cash equivalents at December 31, 2007 and December 31, 2006. Concentration of Credit Risk The Company maintains its cash balances in a financial institution. Cash balances at the institution are insured by the Federal Deposit Insurance Corporation up to $100,000. From time to time, the Company’s cash balances may exceed the insured amount. Derivative Instruments The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (hereinafter “SFAS No. 133”), as amended by SFAS No. 137, “Accounting for Derivative Instruments and Hedging Activities -Deferral of the Effective Date of FASB No. 133”, and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activities”, and SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. These statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. Historically, the Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes.


55

F-10

Through the fiscal year ended December 31, 2007, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities. Earnings Per Share The Company has adopted Statement of Financial Accounting Standards No. 128, "Earnings per Share”, which provides for the calculation of basic and diluted earnings per share. In accordance with Financial Accounting standards No. 141(R) “Business Combinations” the Company calculated the weighted average number of common shares outstanding during the period in which the reverse acquisition occurred by using the weighted-average number of common shares of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement as the number of common shares outstanding from the beginning of the period to the acquisition date and the actual number of common shares of the legal acquirer (the accounting acquiree) outstanding during the period as the number of common shares outstanding from the acquisition date to the end of the period. The basic earnings per share for each comparative period before the acquisition date presented in the consolidated financial statements following the reverse acquisition were calculated by dividing the income of the legal acquiree attributable to common shareholders in each of those periods by the legal acquiree’s historical weighted-average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement. Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, such as stock options, warrants or convertible securities. Common stock equivalents at December 31, 2007 and December 31, 2006 are comprised of employee options of 1,222,289 and 800,000, respectively; non employee options/warrants of 2,678,341 and 1,753,000, respectively; and convertible Series A preferred shares of 0 and 3,000,423, respectively. Inclusion of these stock equivalents in the calculation of earnings per share would be anti-dilutive. Fair Value of Financial Instruments The Company's financial instruments as defined by Statement of Financial Accounting standards No. 107, "Disclosures about Fair Value of Financial Instruments," include cash, trade accounts receivable, accounts payable, and accrued expenses. All instruments are accounted for on an historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value. Fixed Assets Property, plant, and equipment are stated at cost. Depreciation is computed on the straight-line method over the estimated useful life of the asset commencing when assets are placed in service. The useful lives of property, plant, and equipment for purposes of computing depreciation range fromthree to seven years. The Company had no fixed assets at December 31, 2007. In the year ended December 31, 2007, the Company disposed of its prototypes pursuant to the transaction disclosed in Note 10.


56

F-11

Income Taxes The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." and records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and when temporary differences become deductible. The Company considers, among other available information, uncertainties surrounding the recoverability of deferred tax assets, scheduled reversals of deferred tax liabilities, projected future taxable income, and other matters in making this assessment. In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (hereinafter “FIN 48”), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 has no material impact on the Company’s financial reporting. Recent Accounting Pronouncements In March 2006, the Financial Accounting Standards Board issued FASB Statement No. 156, “Accounting for Servicing of Financial Assets - An Amendment of FASB Statement No. 140.” This standard amends the guidance in FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” Among other requirements, Statement 156 requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract. Statement 156 is effective as of the beginning of an entity's first fiscal year that begins after September 15, 2006. The statement did not have a material effect on the financial statements. In September, 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (hereinafter :SFAS No. 158”). This statement requires an employer to recognize the overfunded or underfunded statues of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not for profit organization. This statement also requires an employer to measure the funded status of a plan as of the date of its year end statement of financial position, with limited exceptions. The adoption of this statement had no immediate material effect on the Company’s financial condition or results of operations on December 31, 2007 or December 31, 2006. In September, 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (hereinafter “SFAS No. 157”). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosure about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements. This statement does not require any new fair value measurements, but for some entities, the application of this statement may change current practice. The adoption of this statement had no immediate material effect on the Company’s financial condition or results of operations. In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 108 to address diversity in practice in quantifying financial statement misstatements. SAB 108 requires that registrants quantify the impact on the current year’s financial statements of correcting all misstatements, including the carryover and reversing effects of prior years’ misstatements, as well as the effects of errors arising in the current year. SAB 108 is effective as of the first fiscal year ending after November 15, 2006, allowing a one-time transitional cumulative effect adjustment to retained earnings as of January 1, 2006, for errors that were not previously deemed material, but are material under the guidance in SAB No. 108. There was no impact on our consolidated financial statements with respect to the adoption of SAB No. 108.


57

F-12

In February, 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115” (hereinafter SFAS No. 159”). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007, although earlier adoption is permitted. Management has not determined the effect that adopting this statement would have on the Company’s financial condition or results of operation. In December 2007, FASB issued SFAS No. 160 "Noncontrolling Interests in Consolidated Financial Statements" ("SFAS No. 160"), an amendment of Accounting Research Bulletin No. 51 ("ARB No. 51"). SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS No. 160 also changes the way the consolidated income statement is presented and establishes a single method of accounting for changes in a parent's ownership interest in a subsidiary that do not result in deconsolidation. SFAS No. 160 requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interest of the parent's owners and the interests of the noncontrolling interests of the subsidiary. SFAS No. 160 becomes effective for annual reports filed on or after December 15, 2008. The Company does not believe that adoption of SFAS No. 160 will have any immediate material effect on the Company's financial condition or results of operations. In December 2007, FASB issued SFAS No. 141 (revised 2007) "Business Combinations" ("SFAS No. 141(R)"), which replaces SFAS No. 141, "Business Combinations" ("SFAS No. 141"). In a business combination, SFAS No. 141(R) requires the acquirer to recognize the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. Acquisition costs are required to be reported separately from the assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. SFAS No. 141(R) retains the fundamental requirements of SFAS 141 that the purchase method be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141(R) also amends SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142"), to, among other things, provide guidance on the impairment testing of acquired research and development intangible assets and assets that the acquirer intends not to use. SFAS No. 141(R) becomes effective for annual reports filed on or after December 15, 2008. The Company does not believe that adoption of SFAS No. 141(R) will have any immediate material effect on the Company's financial condition or results of operations. In February 2008, the FASB issued FSP 157-2 “Partial Deferral of the Effective Date of Statement 157” (FSP 157-2). FSP 157-2 delays the effective date of SFAS No. 157, for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008. The Company is currently assessing the impact of SFAS No. 157-2 on the Company’s consolidated statement of financial condition and results of operations


58

F-13

On March 19, 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities. These enhanced disclosures will discuss (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We have not determined the impact, if any SFAS No. 161 will have on our consolidated financial statements. Research and Development Research and development costs are charged to operations when incurred with the exception of patent related filing costs, which are capitalized when the Company can reasonably estimate future cash flows. For the years ended December 31, 2007 and 2006, the Company had not capitalized any research and development costs. During the year ended December 31, 2007, the Company did not expense any research and development. During the year ended December 31, 2006, the Company had $14,615 in research expenses. The Company’s research and development expenses from inception through December 31, 2007 are $703,738. Stock-Based Compensation During the fourth quarter of 2004, the Company adopted SFAS No. 123, "Accounting for Stock Based Compensation." Accordingly, the Company has expensed the compensation cost for the options and warrants issued based on the fair value at the warrant grant dates calculated utilizing the Black-Scholes option valuation model. During the year ended December 31, 2005, the Company adopted SFAS No. 123(R). During the year ended December 31, 2006 and through the April 20, 2007 date of the BioGold Merger, the Company had one share-based compensation plan, which is described below. The compensation cost that has been charged against income for the plan is $555,836 and $714,171 for the years ended December 31, 2007 and December 31, 2006, respectively. Because of continued losses, no income tax benefit has been recognized in the income statement for share-based compensation arrangements. As of December 31, 2007, no share-based compensation cost had been capitalized as part of inventory or fixed assets. Full Circle’s 2004 Incentive Stock Option Plan (the Plan), approved by the shareholders, permitted the grant of share options and shares to its employees for up to 10 million shares of common stock. Option awards were generally granted with an exercise price equal to or within 85% to 100% of the market price of the Company's stock at the date of grant. Option awards generally vest based on 2 to 4 years of continuous service and have 10-year contractual terms. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan). As a result of the BioGold Merger, the Plan was terminated. However, in the year ended December 31, 2007, the Company reserved 1,222,289 shares of common stock for potential issuance based upon the exercise of the grants under the Plan that are vested and remain exercisable. The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions discussed herein. Expected volatilities were based on several factors including: the historical volatility of the Company's stock, comparisons to similar development stage companies in the waste management industry, and review of SEC comments for similar companies. While the Company will use historical data to estimate option exercise and employee termination within the valuation model, because of its limited history, the Company has assumed all options will be exercised and there will be no employee terminations. As terminations occur, the Company stops recognizing the expense associated with those respective options. The expected term of options granted is estimated to be the vesting period of the respective options which the Company believes provides a reasonable estimation of the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the historical LIBOR rate at the time of grant.


59

F-14

To estimate compensation expense, the Company used the Black-Scholes pricing Model and assumptions deemed reasonable by management. All options were valued as of the date of the grant period. The following assumptions were used to compute the fair value of option grants for the years ended December 31,

No grants were made in the year ended December 31, 2007; however, an additional 500,000 shares of a 750,000 option share grant from the year ended December 31, 2006 vested. The following is a summary of the activity in the 2004 Plan since inception.

The weighted average contractual life remaining of options outstanding at December 31, 2007 is approximately 9 years.


60

2006 2005Expected volatility 70% 70%Expected dividend yield 0% 0%Risk-free interest rate 4.840% 5.3-5.67%Expected life 10 years 10 years

Shares Under Option

Number

Of Shares

Weighted Average Exercise Price per Share

Weighted Average Fair

Value of OptionsGranted

2004 Plan Options outstanding at December 31, 2004 - $ - $ -

Granted 2,500,000 $ 0.20 0.86Exercised - -Terminated 2,500,000 0.00

Options outstanding at December 31, 2005 - $ -Granted 3,300,000 1.34 1.34Exercised - -Terminated (2,500,000) 0.87 0.87

Options outstanding at December 31, 2006 800,000 $ 0.35Granted - $ - $ -Exercised - $ - $ -Terminated - $ - $ -Adjustment for Cab-tive Merger 422,289 $ 0.23 $ 0.23

Options outstanding at December 31, 2007 1,222,289 $ 0.23 $ 0.23

F-15

Note 6. SIGNIFICANT CONTRACTS On May 15, 2006, the Company entered into a licensing agreement to acquire license rights to a patent for alternate ways of processing municipal solid waste (“MSW Patent License”). The Company obtains the exclusive right to use the patented technology within any county in the United States upon the election of the Company pursuant to the agreement to license that particular county. The Company paid the initial $37,500 fees to secure the license rights in 2006 for Orange County, California which the Company expensed. The Company has not built a processing vessel within the required 18 months for Orange County, California and therefore may again elect to license that particular county upon additional payment of $37,500. The Company still has the right of first refusal for any future bona fide purchasers who wish to license that county. On February 20, 2007, the Company entered into a license agreement with Gemini Environment Corporation (“Gemini”), a related party, pursuant to which Gemini licensed BioGold its MSW Autoclave Technology (the “Gemini License”). The Gemini License provides the Company with a non-exclusive license throughout the world to use the MSW Technology to produce fuels, except in the states of Louisiana and Kentucky. The terms of the Gemini License, among other things: (i) runs for a term of 25 years; (ii) obligates the Company to pay to Gemini 3.0% of its revenues; and (iii) obligates the Company to allow having the right, but not the obligation, to manufacture all vessels. In addition, the Gemini License requires the Company to meet certain commercial milestones to maintain the license. Under the terms of the license, the Company must (1) spend at least One Million Dollars ($1,000,000) toward the commencement of development of a project within eighteen (18) months of February 20, 2007; (2) spend an additional Two Million Dollars ($2,000,000.00) prior to the third (3rd) anniversary of the Effective Date, and (3) take, on or before the 3rd anniversary of February 20, 2007, other significant actions to effectuate the commencement of Commercial Operation of the Project, such as obtaining significant written contracts for the sale of fuels, obtaining Project site control, and obtaining contracts for the supply of Biomass. Note 7. SHAREHOLDERS' EQUITY Common and Preferred Stock Upon formation on September 8, 2004, the Company sold and issued 19,187,500 shares of its common stock to the founders of the Company at a price of $0.00001 per share. 17,000,000 of these shares were issued to related parties. The Company entered into a private placement of unregistered securities whereby it sold and issued 2,060,000 shares of common stock in the year ended December 31, 2004. The common stock was sold at $0.25 per share. The gross aggregate proceeds from the issuance of this stock were $515,000. In the year ended December 31, 2005, Full Circle merged with International Waste Processors (“IWP”) and the Company exchanged 970,000 shares of common stock for all outstanding shares of common stock in IWP. IWP is a related party to the Company with common shareholders with Full Circle. The shares were valued at $0.25 per share which was the fair value of the Company’s most recent private placement. During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 1,658,000 shares of common stock at $0.25 per share for gross aggregate proceeds from the issuance of this stock of $414,500.


61

F-16

During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 698,000 shares of common stock at $1.00 per share for gross aggregate proceeds from the issuance of this stock of $698,000. The Company sold these shares at an increased valuation based upon the merger with IWP and its acquisition of additional waste processing technologies. During the year ended December 31, 2005, two warrants representing 468,200 shares of common stock were exercised at their exercise price of $0.01 per share and the Company issued 468,200 shares of common stock for proceeds of $4,682. During the year ended December 31, 2005, Steve Racoosin, the Company’s current Chief Executive Officer forfeited 2,000,000 shares of common stock back to the Company to assist with a private placement and to minimize dilution to shareholders in connection with a prior offering. During the year ended December 31, 2005, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 150,000 shares of Series A Convertible Redeemable Participating Preferred Stock as detailed in Note 6 of these footnotes at $1.00 per share. During the year ended December 31, 2006, the Company entered into subscription agreements through a private placement of unregistered securities to sell and issue 2,730,423 shares of Series A Convertible Redeemable Participating Preferred Stock as detailed in Note 6 of these footnotes. The proceeds of $2,530,423 from this issuance was received in the year ended December 31, 2006. The remaining $200,000 was recorded as a subscription receivable and received in 2007. During the year ended December 31, 2006, the Company repurchased and retired 100,000 shares of common stock at $0.50 and 500,000 shares of common stock at $1.00 per share. During the year ended December 31, 2006, the Company issued 500,000 shares of common stock to two consultants as compensation for services and recognized $500,000 in compensation expenses. In addition, the Company issued 120,000 shares of preferred stock to a consultant for services and recognized $120,000 in compensation expense. During the year ended December 31, 2006, the Company reissued 1,500,000 shares back to Mr. Racoosin. On February 12, 2007, Hudson & Co., LLC forfeited 1,000,000 shares of common stock back to the Company. During the year ended December 31, 2007, the Company entered into a subscription agreement through a private placement of unregistered securities to sell and issue 160,000 shares of Common Stock at $0.50 per share for net proceeds of $79,950. During the year ended December 31, 2007, in connection with the Cab-tive Merger, the Company repurchased 30,000 shares of common stock from three shareholders who dissented to the Cab-tive Merger under Nevada law. The Company repurchased these shares for $158. During the year ended December 31, 2007, the Company issued a total of 29,442,546 shares of common stock, of which 3,000,423 were shares of preferred stock that were converted to common stock pursuant to the BioGold Merger discussed in Note 2 and issued 21,908,987 shares of common stock pursuant to the Cab-tive Merger discussed in Note 3.


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F-17

Common stock options and warrants During the year ended December 31, 2004, the Company issued warrants to purchase 1,415,000 shares of its common stock to consultants in consideration for management, research, development, financial and legal services. Related party consultants received 700,000 common stock warrants for services. These warrants were issued at an exercise price of $0.01 per share. During that same year, the Company issued warrants to purchase 100,000 shares of its common stock to directors in the Company in consideration for their service on the board of directors. These warrants were issued at an exercise price of $0.25 per share. The fair value of all warrants was $535,370. The value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. During the year ended December 31, 2005, the Company issued warrants to purchase 1,183,000 shares of its common stock to consultants in consideration for management, research, development, and financial services. The exercise price per share for 525,000 shares represented by the warrants was $0.25, and $1.00 for 658,000 shares represented by the warrants. The fair value of these warrants was $522,382. The value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant which range from 3.27% to 3.84%, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. During the year ended December 31, 2005, the Company issued warrants to purchase 1,000,000 shares of its common stock at an exercise price of $0.25 per share to its chief executive officer in consideration for his prior services. During this same year, the Company also issued warrants to purchase 108,200 shares of its common stock to consultants in consideration for research, development, and financial services. The exercise price for these warrants was $0.01 per share. The value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant which was 3.86%, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. The estimated value of these warrants was recorded at $948,808. During the year ended December 31, 2005, the Company issued warrants to purchase 30,000 shares of its common stock to consultants in consideration for research, development, and financial services. The exercise price for these warrants was $0.85 per share. The value of the warrants was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant which was 4.74%, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. The estimated value of these warrants was $6,491. During the year ended December 31, 2006, the Company issued an employee stock option to purchase 950,000 shares of the Company’s common stock at an exercise price of $0.35 per share to 2 executives. The value of the options was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant which range from 5.15% to 5.59%, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. The estimated value of these options was $268,705. During the year ended December 31, 2007, the Company vested the remaining 500,000 shares of a prior 750,000 share grant to an executive of the Company. The value of the additional option was estimated using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate based upon the LIBOR rate at the time of the grant which was 5.591%, dividend yield of 0%, average volatility factor of the expected market price of the Company’s common stock of 70%, and a term of 10 years. The estimated value of the additional vested option was $555,836.


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F-18

As of December 31, 2007, 1,700,000 warrants have been issued to related parties. Note 8. 2008 EQUITY INCENTIVE PLAN In October, 2007, the board of directors and majority shareholders of BioGold voted to adopt a stock incentive plan for consultants and employees of the Company. The plan was named the “2008 Equity Incentive Plan” (the “Plan”). The Company reserved up to 10,000,000 shares of BioGold Common Stock for issuance under the Plan. These shares may be issued from time to time by action of the Company’s board of directors in exchange for services provided to the Company. At December 31, 2007, no grants or awards have been made under the Plan and the Company continues to reserve 10,000,000 shares for issuance under the Plan. Note 9. COMMITMENT AND CONTINGENCIES On September 25, 2006, the Company entered into a commercial office lease at 2029 Century Park East in Los Angeles, CA. The lease was for a 5 year term and had minimum lease obligations of $9,769 per month with yearly increases of 3.5%. The Company was required to obtain a secured letter of credit for the lease in the amount of $165,500. On August 21, 2007, the office lease was voluntarily terminated by both parties. The Company was required to pay a negotiated $43,418 to the landlord as an early termination fee and one month of lease obligations. As a result of the lease termination, the $165,500 securing the letter of credit, plus capitalized interest of $9,346, was released to the Company. Note 10. RELATED PARTY TRANSACTIONS Chris Walton is a major shareholder, director, officer, or former director or officer of the following companies: Full Circle Industries, Inc., Gemini Environmental, and Hudson & Co., LLC. Phil Pesin is a major shareholder, director, officer, or former director or officer of the following companies: Auriga Laboratories, Inc., Aquoral Finance Corp, LLC, Full Circle Industries, Inc. and Sorrento Financial Group. BioGold Fuels Corporation is a renewable energy company incorporated in the state of Nevada and is publicly traded. Aquoral Finance Corp, LLC is a private finance firm in which Phil Pesin is a manager or member. Auriga Laboratories is a pharmaceutical company incorporated in the state of Delaware and is publicly traded. Gemini Environmental is an environmental solutions company that is privately owned, Sorrento Financial Group a consulting service provider which is beneficially owned by Phil Pesin, and Hudson & Co. is a consulting service provider owned by Chris Walton. Transactions:


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1. On December 20, 2006 the Company entered into a 24 month secured convertible promissory note with Gemini Environment for $110,000. On August 31, 2007, pursuant to the terms of the note, the Company converted the balance due on the note into 335,500 shares of preferred stock in Gemini. On December 10, 2007, the Company entered into an agreement with Gemini to return the 335,500 shares of Gemini stock to Gemini for cancellation in exchange for Gemini waiving four years of annual maintenance payments under the Gemini License.

F-19

The Company treated the Auriga stock as trading securities in accordance with SFAS 115, “Accounting for Certain Investments in Debt and Equity Securities.” In the year ending December 31, 2007, the Company recorded an $106,803 realized loss and $5,069 realized gain from the sale of Auriga stock. The Company received approximately $370,000 from the sale of Auriga stock and recorded an $68,600 unrealized loss on investment for the decline in fair market value of the remaining 134,076 shares of Auriga stock held by the Company at December 31, 2007. The technology transfers have no readily ascertainable value and were not valued as part of these transactions. The patent application transferred to Gemini had no book value and a fair market value for the license agreement with Gemini could not be determined. The above described transactions were measured at the fair market value of the Auriga stock. Other transactions On September 1, 2006, The Company entered into a consulting agreement with Hudson & Co. for financial services to be provided at $15,000 per month. On February 12, 2007 Hudson & Co. terminated its agreement and the Company has no further liability for this agreement. On March 15, 2005, the Company entered into an advisory agreement with Sorrento Financial Group for $15,000 per month. In addition, the Company was obligated to pay $500,000 for achievement of certain financial milestones. In lieu of the $500,000 payment, the Company repurchased $500,000 of BioGold’s common stock held by Phil Pesin. The fair value of the stock was determined by the Company’s most recent private placement of $1 per share. On February 12, 2007, all service agreements with Sorrento were cancelled and the Company has no further liability. Note 11. INCOME TAXES The Company has incurred significant operating losses since its inception and, therefore, has not generally incurred income tax expense. The following are the components of the income tax provision for the fiscal years ended December 31, 2007 and 2006:


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2. On December 24, 2006 the Company invested $93,750 in Aquoral Finance Corp for a ¾ membership interest and a warrant to purchase 93,750 shares of common stock of Auriga Laboratories. On February 12, 2007, Phil Pesin and another shareholder of the Company exchanged 325,000 shares of Auriga common stock in consideration for the Company’s transferring a municipal solid waste technology patent application and prototype to Gemini, which Gemini then licensed back to the Company. In addition, the Company transferred its ¾ membership interest in Aquoral and the warrant to purchase 93,750 shares of common stock of Auriga to Gemini.

3. On June 20, 2007, BioGold purchased 80,000 share of Auriga common stock for $100,000.

4. During the year ended December 31, 2007, the Company entered into a promissory note receivable for $125,000 with Auriga and entered into a promissory note receivable for $123,959 with Gemini. During the year ended December 31, 2007, Gemini repaid the note and the Company received 150,000 shares of Auriga common stock as payment for the other note balances.

2007 2006Income tax provision

Current $ 2,704 $ 800Deferred - -Total $ 2,704 $ 800

F-20

The Company has determined that its deferred tax assets do not satisfy the more likely than not criteria set forth in Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS No. 109). Accordingly, a valuation allowance has been recorded against the applicable deferred tax assets and therefore no tax benefit has been recorded in the accompanying statement of operations. The Company’s deferred tax assets (liabilities) were as follows for the fiscal years ended December 31, 2007 and 2006:

The Company has deferred tax assets, comprised primarily of net operating loss carry-forwards. Due to operating losses, the uncertainty of future profits and limitations on the utilization of net operating loss carry-forwards under IRC Section 382, a valuation allowance has been recorded to fully offset the Company’s deferred tax assets. Of the Company’s $3,211,785 net operating loss carry-forwards, $1,120,006 is subject to the limitation under Section 382 and the remaining $2,091,779 is not subject to the limitation. The net operating loss carry-forwards of $3,211,785 begin expiring in 2019. A more than 50% change in ownership will greatly restrict the use of these losses in the future. The valuation allowance increased $451,820 during the year ended December 31, 2007. The reconciliation of the statutory and effective income tax rates is as follows:


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2007 2006Deferred tax assets Net operating loss carryforward $ 1,336,656 $ 1,100,763Stock-based compensation 1,928,726 1,739,742 Depreciation, amortization and other 182,515 114,494 State tax - Deferred (244,951) (203,871)Research & Development credit - - 3,202,946 2,751,126 Valuation allowance (3,202,946) (2,751,126)Net deferred tax assets $ - $ -

2007 2006Federal income tax rate 34.0% 34.0%State income tax rate, net of federal benefit 8.84% 8.84%Change in valuation allowance -42.84% -42.84%Other -% -%Effective income tax rate 0.0% 0.0%

F-21

Note 12. STOCK PURCHASE WARRANTS The following is a summary of outstanding warrants as of December 31, 2006 and December 31, 2007:

(1) These amounts are adjusted for the conversion pursuant to the Cab-tive Merger in 2007. Note 13. EMPLOYMENT ARBITRATION SETTLEMENT On February 5, 2007, a former employee, Irwin Frank filed a claim with the American Arbitration Association (the “Claim”). The Claim alleged that Full Circle terminated his employment in violation of an alleged employment contract. In August, 2007, the Company settled the Claim for $30,000 which was paid to Mr. Frank and recorded as other expense. Note 14. SHAREHOLDER DISSENT In connection with the Cab-tive Merger on October 25, 2007, the Company, pursuant to Nevada law, provided notice of the Cab-tive Merger to all shareholders and the opportunity to dissent from the corporate action and return all of their stock in the Company for payment of fair value. Four shareholders provided the Company with notice of dissent to the Cab-tive Merger and requested payment of fair value for their shares of stock in the Company. Pursuant to Nevada law, the Company offered to pay fair value of the shares of Company’s stock held by the dissenting shareholders. Three of the shareholders accepted this payment for which the Company paid $158 to repurchase and retire 30,000 shares of Company common stock. The remaining dissenting shareholder holding 1,030,000 shares of common stock has refused the Company’s calculation of fair value and provided demand for payment of his calculation of fair value. On March 7, 2008, pursuant to Nevada law, since the Company and the shareholder do not agree on the fair value to be paid to the dissenter for its shares, the Company filed an action in the District Court in Clark County Nevada to determine fair value. Unless the Company and the dissenting shareholder agree upon the fair value of the shares or otherwise settle the dispute, the court shall determine the fair value for the shares to be paid by the Company to the shareholder. The Company does not feel that the amount it may pay for fair value is material and has not recognized any contingent liability. Note 15. PAYROLL LIABILITIES On February 12, 2007, the Company employed Steve Racoosin as the Company’s Chief Executive Officer. Mr. Racoosin was to receive a salary of $275,000 per year. The Company paid Mr. Racoosin a total of $109,545 and payroll tax of $17,286 pursuant to his employment. The remaining $134,258 owed for the year ended December 31, 2007 was recorded as an accrued payroll liability.


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Number of Warrants

Exercise Price per Share

Weighted Average Exercise

Price per Share

Warrants outstanding at December 31, 2006 (1) 2,678,341 $ 0.01 to $0.65 $ 0.40 Warrants outstanding at December 31, 2007 2,678,341 $ 0.01 to $0.65 $ 0.40

F-22

On October 1, 2007, the Company hired Chris Barsness as the Company’s Chief Financial Officer. Mr. Barsness was to receive a salary of $160,000 per year. The Company paid Mr. Barsness a total of $26,213. The remaining $16,847 owed for the year ended December 31, 2007 was recorded as an accrued payroll liability. Note 16. SUBSEQUENT EVENTS In January 2008, the Company entered into a one year commercial lease agreement for approximately 500 square feet of office space at 1800 Century Park East, Suite 600, Los Angeles, CA 90067. The Company is obligated to pay approximately $1,800 per month for this office space. On January 30, 2008, the Company entered into an agreement with AudioStocks, Inc. to provide the Company investor relations services for a four month period. The Company issued 112,000 shares of its common stock at a fair value of $106,400 to AudioStocks as compensation for these services. On February 8, 2008, the Company registered 10,000,000 shares of common stock reserved for issuance under the Company’s 2008 Equity Incentive Plan by filing US Securities & Exchange Commission Form S-8. On March 3, 2008, the Company issued to Heritage Holding Group, LLC, a Delaware limited liability company (“Lender”) a Senior Secured Promissory Note (the “Note”) in the principal amount of up to $550,000. The Note is due and payable on December 31, 2008. The Note bears interest at the rate of 15% per annum and the Lender receives a 10% origination fee on the Note, which is deducted from the payment of principal at the time the funds are disbursed. The Note was issued pursuant to a Senior Secured Note Purchase Agreement. To secure the Note, the Lender has been granted a first priority interest in all of the assets of the Company pursuant to the terms and conditions of a Security Agreement dated March 3, 2008. The Note allows prepayment at any time to remove the security interest.


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F-23

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

FULL CIRCLE INDUSTRIES, INC.,

BIOGOLD FUELS CORPORATION,

AND

BIOGOLD ACQUISITION, INC.

DATED AS OF APRIL 13, 2007

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 70 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB Doc Type: EX-2.1 File Name: v110188_ex2-1.htm Pg: 1

AGREEMENT AND PLAN OF MERGER

BETWEEN:

Biogold Fuels Corporation, a body corporate incorporated under the State laws of Nevada (hereinafter referred to as “Parent”);

OF THE FIRST PART

-and- Biogold Acquisition, Inc., a body corporate incorporated under the laws of the State of Nevada and a wholly-owned subsidiary of Parent, (hereinafter referred to as “Merger Sub”);

OF THE SECOND PART

-and- Full Circle industries, Inc. (“Company”), a body corporate incorporated under the laws of the State of Nevada, (hereinafter referred to as “Company”);

RECITALS WHEREAS Company is a technology company whose business goal is to commercialize their licensed and proprietary processing system for biodiesel production on an industrial scale and to become a leading provider of biodiesel in the United States and elsewhere as described in the Executive Summary delivered to Parent; AND WHEREAS upon the terms and subject to the conditions of this Agreement (as defined in Section 1.2) and in accordance with the Revised Statues of the State of Nevada (the “RSN”), Parent and Company intend to enter into a business combination transaction by means of a merger between Merger Sub and the Company in which the Company will merge with Merger Sub and be the surviving entity, through an exchange of all the issued and outstanding shares of capital stock of the Company for shares of common stock of the Parent. AND WHEREAS the Board of Directors of the Company, Parent and Merger Sub have determined that the Merger (as defined in Section 1.1) is fair to, and in the best interests of, their respective companies and their respective stockholders. AND WHEREAS The parties intend, by executing this Agreement, to adopt a plan of reorganization within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the “Code”). THIS AGREEMENT WITNESSES that, in consideration of the premises and of the covenants, agreements, warranties and representations herein set forth and provided for, the parties hereto respectively covenant and agree as follows:


ARTICLE I

THE MERGER

1.1 The Merger. At the Effective Time (as defined in Section 1.2) and subject to and upon the terms and conditions of this Agreement and the

applicable provisions of the RSN, Merger Sub shall be merged with and into the Company (the “Merger”), the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation. The Company as the surviving corporation after the Merger is hereinafter sometimes referred to as the “Surviving Corporation.” The Merger is hereinafter sometimes referred to as the “Transaction.”

1.2 Effective Time; Closing. Subject to the conditions of this Agreement, the parties hereto shall cause the Merger to be consummated by filing with the Secretary of State of the State of Nevada in accordance with the relevant provisions of the RSN a Articles of Merger (the “Articles of Merger”) (the time of such filing with the Secretary of State of the State of Nevada, or such later time as may be agreed in writing by the Company and Parent and specified in the Articles of Merger, being the “Effective Time”) as soon as practicable on or after the Closing Date (as herein defined). The term “Agreement” as used herein refers to this Agreement and Plan of Merger, as the same may be amended from time to time, and all schedules hereto (including the Company Schedules and Parent Schedules). Unless this Agreement shall have been terminated hereunder, the closing of the Merger (the “Closing”) shall take place on April 25, 2007 at the offices of the Company, 1800 Century Park East, Suite 600, Los Angeles, CA 90067, Fax: (310) 556-0026, or at such other time, date and location as the parties hereto agree in writing (the “Closing Date”).

1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the RSN. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation.

1.4 Articles of Incorporation; Bylaws.

(a) At the Effective Time, the Articles of Incorporation of the Parent shall be the Articles of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Articles of Incorporation of the Surviving Corporation.

(b) The Bylaws of the Parent shall be the Bylaws of the Surviving Corporation.

1.5 Directors and Officers. The initial directors of the Surviving Corporation shall be the directors of the Parent immediately prior to the Effective Time, until their respective successors are duly elected or appointed and qualified. The initial officers of the Surviving Corporation shall be the officers of the Parent immediately prior to the Effective Time; provided, however, Steve Racoosin, chief executive officer of the Company prior to the Effective Time, shall be appointed to the position of Chief Executive Officer of the Surviving Corporation at the Effective Time.


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1.6 Effect on Capital Stock. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger and this

Agreement and without any action on the part of Merger Sub, the Company or the holders of any of the following securities, the following shall occur:

(a) Conversion of Company Capital Stock. Each share of preferred stock of the Company, par value $0.0001 per share (“Company Preferred Stock) and each share of common stock, par value $0.0001 per share (“Company Common Stock), of the Company (collectively, the Company Preferred Stock and the Company Common Stock shall be referred to herein as the “Company Capital Stock”) issued and outstanding immediately prior to the Effective Time as listed on Schedule 2.1 attached hereto, will be automatically converted into the right to receive on the Closing Date one share of Common Stock, par value $0.0001 per share, of Parent (“Parent Common Stock”) (the “Common Exchange Ratio”) upon surrender of the certificate representing such share of Company Capital Stock in the manner provided in Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond, if required) in the manner provided in Section 1.9). If any shares of Company Capital Stock outstanding immediately prior to the Effective Time are unvested or are subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with the Company, then the shares of Parent Common Stock issued in exchange for such shares of Company Capital Stock will also be unvested or subject to the same repurchase option, risk of forfeiture or other condition, and the certificates representing such shares of Parent Common Stock may accordingly be marked with appropriate legends. The Company shall take all action that may be necessary to ensure that, from and after the Effective Time, Parent is entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or other agreement.

(b) Assumption of Company Stock Options. At the Closing, each outstanding option to purchase shares of Company Common Stock (each, a “Company Stock Option”), whether or not vested, shall be assumed by Parent. Each Company Stock Option so assumed by Parent under this Agreement will continue to have, and be subject to, the same terms and conditions of such Company Stock Option immediately prior to the Closing (including, without limitation, any repurchase rights or vesting provisions and provisions regarding the acceleration of vesting on certain transactions, other than the transactions contemplated by this Agreement), except that (i) each Company Stock Option will be exercisable (or will become exercisable in accordance with its terms) for that number of whole shares of common stock, no par value per share, of Parent (“Parent Common Stock”) equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Stock Option immediately prior to the Closing multiplied by one (“Option Exchange Ratio”), rounded up to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Stock Option will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Stock Option was exercisable immediately prior to the Closing by the Option Exchange Ratio, rounded down to the nearest whole cent.


4

(c) Assumption of Company Common Stock Warrants. At the Closing, each outstanding warrant to purchase shares of

Company Common Stock (each, a “Company Common Stock Warrant”) shall be assumed by Parent and will continue to have, and be subject to, the same terms and conditions of such Company Common Stock Warrants immediately prior to the Closing, except that (i) such Company Common Stock Warrant will be exercisable (or will become exercisable in accordance with its terms) for that number of shares of Parent Common Stock equal to the product of the number of shares of Company Common Stock that were issuable upon exercise of such Company Common Stock Warrant immediately prior to the Closing multiplied by the Option Exchange Ratio, rounded up to the nearest whole number of shares of Parent Common Stock, and (ii) the per share exercise price for the shares of Parent Common Stock issuable upon exercise of such assumed Company Common Stock Warrant will be equal to the quotient determined by dividing the exercise price per share of Company Common Stock at which such Company Common Stock Warrant was exercisable immediately prior to the Closing by the Option Exchange Ratio, rounded down to the nearest whole cent.

(d) Capital Stock of Merger Sub. Each share of common stock, par value $0.001 per share, of Merger Sub (the “Merger Sub Common Stock”) issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock, no par value, of the Surviving Corporation. Each certificate evidencing ownership of shares of Merger Sub Common Stock shall evidence ownership of such shares of capital stock of the Surviving Corporation.

(e) Adjustments to Exchange Ratios. The Exchange Ratios (as defined below) shall be adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Parent Common Stock or Company Common Stock), extraordinary cash dividends, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent Common Stock, Company Common Stock, Company Preferred Stock (or any options or warrants with respect to the foregoing) occurring on or after the date hereof and prior to the Effective Time.

(f) Fractional Shares. Fractional shares of Parent Common Stock will be issued by virtue of the Merger (rounded to the second decimal point).

1.7 Surrender of Certificates.

(a) Exchange Agent. Company or such other agent or agents as Company may appoint shall be designated by the parties hereto to act as the exchange agent (the “Exchange Agent”) in the Merger.

(b) Parent to Provide Parent Common Stock. Promptly after the Effective Time, and in no event more than three (3) business days thereafter, Parent shall make available for exchange in accordance with this Article I, the shares of Parent Common Stock issuable pursuant to Section 1.6 in exchange for outstanding shares of Company Common Stock and any dividends or distributions to which holders of such shares may be entitled pursuant to Section 1.7(d).


5

(c) Exchange Procedures. Promptly after the Effective Time, and in no event more than three (3) business days thereafter,

Parent shall mail to each holder of record (as of the Effective Time) of a certificate or certificates (the “Certificates”), which immediately prior to the Effective Time represented outstanding shares of Company Capital Stock whose shares were converted into the right to receive shares of Parent Common Stock pursuant to Section 1.6: (i) a letter of transmittal in customary form (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to Parent and shall contain such other customary provisions as Parent may reasonably specify), and (ii) instructions for use in effecting the surrender of the Certificates in exchange for certificates representing shares of Parent Common Stock and any dividends or other distributions pursuant to Section 1.7(d). Upon surrender of Certificates for cancellation to Parent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates shall be entitled to receive in exchange therefor certificates representing the number of shares of Parent Common Stock into which their shares of Company Capital Stock were converted into the right to receive at the Effective Time and any dividends or distributions payable pursuant to Section 1.7(d), and the Certificates so surrendered shall forthwith be canceled. Until so surrendered, outstanding Certificates will be deemed from and after the Effective Time, to evidence only the right to receive the applicable number of shares of Parent Common Stock (or Common Stock issuable upon conversion of Common Stock) issuable pursuant to Section 1.6.

(d) Distributions With Respect to Unexchanged Shares. No dividends or other distributions declared or made after the date of this Agreement with respect to Parent Common Stock with a record date after the Effective Time will be paid to the holders of any unsurrendered Certificates with respect to the shares of Parent Common Stock to be issued upon surrender thereof until the holders of record of such Certificates shall surrender such Certificates. Subject to applicable law, following surrender of any such Certificates with a properly completed letter of transmittal letter, Parent shall promptly deliver to the record holders thereof, without interest, certificates representing shares of Parent Common Stock issued in exchange therefor and the amount of any such dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such shares.

(e) Transfers of Ownership. If certificates representing shares of Parent Common Stock are to be issued in a name other than that in which the Certificates surrendered in exchange therefor are registered, it will be a condition of the issuance thereof that the Certificates so surrendered will be properly endorsed and otherwise in proper form for transfer and that the persons requesting such exchange will have paid to Parent or any agent designated by it any transfer or other taxes required by reason of the issuance of certificates representing shares of Parent Common Stock in any name other than that of the registered holder of the Certificates surrendered, or established to the satisfaction of Parent or any agent designated by it that such tax has been paid or is not payable.

(f) Required Withholding. Each of Parent, any agents appointed by Parent and the Surviving Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of Company Capital Stock such amounts as are required to be deducted or withheld therefrom under the Code or under any provision of state, local or foreign tax law or under any other applicable legal requirement. To the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the person to whom such amounts would otherwise have been paid.


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(g) Termination of Exchange Agent Funding. Parent Common Stock held by the Exchange Agent (other than Parent) which

have not been delivered to holders of Certificates within six months after the Effective Time shall promptly be paid or delivered, as appropriate, to Parent, and thereafter holders of Certificates who have not theretofore complied with the exchange procedures outlined in and contemplated by this Section 1.7 shall thereafter look only to Parent (subject to abandoned property, escheat and similar laws) only as general creditors thereof for their claim for shares of Parent Common Stock and any dividends or distributions pursuant to Section 1.7(d) with respect to such shares to which they are entitled.

(h) No Liability. Notwithstanding anything to the contrary in this Section 1.7, neither the Exchange Agent, Parent, the Surviving Corporation, the Company nor any party hereto shall be liable to a holder of shares of Parent Common Stock or Company Capital Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

1.8 No Further Ownership Rights in Company Capital Stock. All shares of Parent Common Stock issued in accordance with the terms hereof shall be deemed to have been issued in full satisfaction of all rights pertaining to such shares of Company Capital Stock, and there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Capital Stock which were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article I.

1.9 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, certificates representing the shares of Parent Common Stock which the shares of Company Capital Stock formerly represented by such Certificates were converted into the right to receive pursuant to Section 1.6.

1.10 Tax Consequences. It is intended by the parties hereto that the Merger shall constitute a reorganization within the meaning of Section 368 of the Code. The parties hereto adopt this Agreement as a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax Regulations.

1.11 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of Company and Merger Sub, the officers and directors of Company and Merger Sub will take all such lawful and necessary action.


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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF COMPANY

Except as disclosed on the schedules prepared by the Company (the "Company Schedules"), the Company hereby represents and warrants to,

and covenants with, Parent and Merger Sub, as follows:

2.1 Company has been duly formed, organized and is a duly existing corporation and in good standing under the laws of Nevada and to the Company’s knowledge, (i) the issued and outstanding capital stock of the Company is issued in the amounts and to the individuals/entities as set forth on Schedule 2.1 attached heretoCompany and (ii) Schedule 2.1 sets forth all of the issued and outstanding capital stock of the Company;

2.2 the unaudited financial statements of the Company delivered to the Parent (collectively the “Financial Statements”) are the complete and correct copies of the Company Financial Statements. The Company Financial Statements present fairly the financial position and results of operations and changes in cash flows of Company as of the respective dates or for the respective periods reflected therein;

2.3 no person, firm or corporation now has, or at Closing will have, any agreement or option or any right capable of becoming an agreement for the purchase, subscription or issuance of any of the unissued shares in the capital of Company other than as noted on any schedule hereto;

2.4 no dividend on any shares in the capital of Company has been declared, paid or authorized, or will be declared, paid or authorized after the date hereof and up to Closing other than as noted on any schedule hereto;

2.5 no payments have been made or authorized, or will be made or authorized after the date hereof and prior to Closing by Company to officers, directors, shareholders or employees of Company except in the ordinary course of business and at the regular rate of salary or other remuneration other than as noted on any schedule hereto;

2.6 no bonuses have been paid or authorized, or will be paid or authorized after the date hereof and prior to Closing by Company to officers, directors, shareholders or employees of Company except in the ordinary course of business and at regular rate of salary or other remuneration other than as noted on any schedule hereto;

2.7 no capital expenditures in excess of $10,000 have been authorized, or will be authorized after the date hereof and up to Closing by Company with the exception of the necessary expenditures to be incurred in the normal course of business other than as noted on any schedule hereto;

2.8 Company will not have at Closing any outstanding contracts other than contracts in the ordinary course of business, and previously disclosed to Parent, other than as listed on any schedule hereto;


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2.9 except as indicated on any schedule attached hereto, to the best of the Company’s knowledge and belief, there are not now and at Closing

there will be no actions, suits or proceedings (whether or not purportedly on behalf of Company) pending or to the knowledge of Company threatened against or affecting Company at law or in equity or before or by any federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, and which involve the possibility of any judgment or liability not fully covered by insurance;

2.10 to the best of the Company’s knowledge and belief, Company is not in material default or material breach of any material contracts, agreements, written or oral, indentures or other instruments to which it is a party or by which it is bound and there exists no state of facts which after notice or lapse of time or both would constitute such a default or breach and all such contracts, agreements, indentures or other instruments are now in good standing and Company is entitled to all benefits thereunder, provided that this provision shall not apply to any default or breach adversely affecting the financial position of Company to the extent of less than $10,000.00 in the aggregate other than as noted on any schedule hereto;

2.11 to the best of the Company’s knowledge and belief, Company is conducting its business in material compliance with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on. Company is not in breach of any such laws, rules or regulations, except for breaches which in the aggregate are immaterial, and is duly licensed, registered or qualified in each jurisdiction in which it owns or leases property or carries on business, to enable its business to be carried on as now conducted by it and its property and assets to be owned, licensed and operated, and all such licences, registrations and qualifications are valid and subsisting and in good standing other than as noted on any schedule hereto;

2.12 Company has filed or will be filing, all tax returns required to be filed by it and has paid all taxes which are due and payable, and has paid all assessments and reassessments, and all other taxes, governmental charges, penalties, interest and fines due and payable by it on or before the date hereof. Adequate provision has been made for taxes payable for the current period for which tax returns are not yet required to be filed; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of any tax, governmental charge or deficiency against Company. There are no actions, suits, proceedings, investigations or claims now threatened or pending against Company in respect of taxes, governmental charges or assessments, asserted by any such authority, Company has withheld from each payment made to any of its past and present creditors, shareholders, officers, directors and employees the amount of all taxes, including but not limited to income tax, and other deductions required to be withheld therefrom and has paid the same to proper tax or other receiving officers within the time required under any applicable tax legislation; and

2.13 Company has no loans or indebtedness outstanding which have been made to directors, former directors, officers, shareholders and/or employees of Company or to any person or corporation not dealing at arm’s length with any of the foregoing except those to be discharged as part of this transaction other than as noted on any schedule hereto.


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The Company hereby acknowledges that Parent is relying upon the above covenants, representations and warranties in connection with the completion by Parent of the transaction contemplated hereby.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

Except as disclosed on the schedules prepared by the Parent (the "Parent Schedules"), the Parent hereby represents and warrants to, and covenants with Company, as follows:

3.1 Parent has been duly incorporated and organized and is validly subsisting under the laws of Nevada and that it has the corporate power to hold its property and to carry on the business of Parent as now being conducted by it;

3.2 Except for Merger Sub which is a wholly-owned subsidiary of Parent, Parent has no subsidiaries and does not own, directly or indirectly, any ownership, equity, profits or voting interest in any person or have any agreement or commitment to purchase any such i8terest;

3.4 the authorized capital of Parent, as of the date hereof consists of an 125,000,000 number of common shares without par value, of which 26,442,123 shares are issued and outstanding at the date hereof. No person, firm or corporation now has, or at Closing will have, any agreement or option or any right capable of becoming an agreement for the purchase, subscription or issuance of any of the unissued shares in the capital of Parent other than as noted herein;

3.5 all shares issued to the Company Shareholders pursuant to this agreement will be duly issued, validly authorized, fully paid and non-assessable common shares of the capital stock of Parent;

3.6 no dividends on any shares in the capital of Parent have been declared, paid or authorized since its incorporation or will be declared, paid or authorized after the date hereof and up to Closing;

3.7 Parent has not guaranteed, or agreed to guarantee any debt, liability or other obligation of any person, firm or corporation;

3.8 Parent is in good standing with all regulatory authorities;

3.9 there are no orders, suits, fines, or injunctions, issued or threatened against Parent and Parent is in compliance with all laws, regulations and rules of any federal or provincial jurisdiction to which it is subject, and their no claims (including environmental claims) which have been made against Parent; nor are there any circumstances existing, to the knowledge of Parent, which 5ould result in such claims arising in the future;

3.10 Parent is, and has always been, in compliance with all environmental laws, including the applicable common law relating to the protection of the environment and public health and safety. Parent is not required to perform any work, repairs, construction, change in business practices or operations or comply with any written demand or notice with respect to any breach or liability under any environmental laws;

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 79 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB Doc Type: EX-2.1 File Name: v110188_ex2-1.htm Pg:

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3.11 there are no material changes in the business or affairs of Parent which have not been properly and publicly disclosed;

3.12 Parent has not made nor agreed to make any loans to anyone;

3.13 Parent has no legal obligations of any kind or nature whatsoever except as disclosed herein with the exception of the obligation

to issue shares as set out herein and with the exception of its normal obligations as a reporting issuer in the normal and ordinary course of business;

3.14 Parent has no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to any financial statements of the Parent;

3.15 there are no restrictions on the business that may be carried on by Parent;

3.16 Board of Directors of Parent (including any required committee or subgroup of the Board of Directors of Parent) has, as of the date of this Agreement, approved this Agreement and the transactions contemplated hereby and Parent’s shareholders has, as of the date of this Agreement, unanimously approved this Agreement and the transactions contemplated hereby; and

3.17 Parent has filed or will be filing, all tax returns required to be filed by it and has paid all taxes which are due and payable, and has paid all assessments and reassessments, and all other taxes, governmental charges, penalties, interest and fines due and payable by it on or before the date hereof. Adequate provision has been made for taxes payable for the current period for which tax returns are not yet required to be filed; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any tax return by, or payment of any tax, governmental charge or deficiency against Parent; there are no actions, suits, proceedings, investigations or claims now threatened or pending against Parent in respect of taxes, governmental charges or assessments, asserted by any such authority, Parent has withheld from each payment made to any of its past and present creditors, shareholders, officers, directors and employees the amount of all taxes, including but not limited to income tax, and other deductions required to be withheld therefrom and has paid the same to proper tax or other receiving officers within the time required under any applicable tax legislation. Parent hereby acknowledges that the Company is relying upon the aforesaid representations and warranties in connection with the completion by the Company of the transaction contemplated hereby.


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ARTICLE IV

PRE-CLOSING COVENANTS

Pre-Closing Covenants of the Company

4.1 The Company covenants as follows:

Pre-Closing Covenants of Parent

4.2 Parent covenants as follows:

a. Parent shall make available to the counsel and/or representatives of the Company, all books, accounts, records and other data of Parent including all minute books, share certificate books, share registers and other corporate documents including the constating documents of Parent, and all other data which in the opinion of the representatives of the Company, in their sole discretion, are required to make an examination of Parent; and

b. the business of Parent will be carried on in the ordinary course after the date hereof and up to Closing.

ARTICLE V

CLOSING CONDITIONS

5.1 The obligations of Parent and Merger Sub to consummate and effect the Transaction shall be subject to the satisfaction at or prior to the

Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Parent:

(a) The Company will deliver to Parent at Closing, a legal opinion, in form satisfactory to counsel and/or representatives of for Parent that: (i) based solely on certificates issued by Nevada, Company has been duly incorporated and organized and is validly subsisting under the laws of the Nevada; and (ii) this Agreement has been duly authorized by Company;

(b) The president of Company will furnish a certificate that certifies the following:


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b. the Company shall make available to the counsel and/or representatives of Parent, all books, accounts, records and other data of Company, including all minute books, share certificate books, share registers and other corporate documents including the constating (organizational) documents of Company, and all other data which in the opinion of the representatives of Parent, in its sole discretion, are required to make an examination of Company; and

c. the business of Company will be carried on in the ordinary course after the date hereof and up to Closing.

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(i). all necessary steps and corporate proceedings of Company shall be taken to permit the Company to effect the Merger

and the transactions contemplated thereby;

(ii) The representations and warranties of Company in this Agreement shall be true and correct in all material respects on and as of the date of this Agreement and at and as of the Closing as though such representations and warranties were made on and as of such time (except for such representations and warranties that speak specifically as of the date hereof or as of another date, which shall be true and correct as of such date).

(iii) The Company shall have performed or complied in all material respects with all agreements and covenants required by

this Agreement to be performed or complied with by them at or prior to the Closing Date except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of the Company) does not, or will not, constitute a material adverse effect on the Company.

(e) That Parent shall be furnished with evidence satisfactory to it at Closing (which may be in the form of officers’ certificates or accounting or tax filings) that there are no arrears of or liabilities for taxes (including taxes on income), rates, assessments or other charges adversely affecting the assets of Company except taxes, rates, assessments of other charges accruing in the ordinary course of operations; and

(f) In case any of the foregoing conditions shall not be fulfilled at or before Closing, Parent may, by notice to the Company,

terminate this agreement at which time all obligations of both Parent and the Company shall be terminated and the parties shall bear their own costs, including all legal fees. In such event, the parties will be mutually released from all claims, demands, actions, and obligations under this Agreement.

5.2 The obligations of Company to consummate and effect the Transaction shall be subject to the satisfaction at or prior to the Closing Date of

each of the following conditions, any of which may be waived, in writing, exclusively by Company:

(a) Parent will deliver to the Company at Closing a legal opinion in form satisfactory to (or counsel for) the Company that:

(i). Parent has been duly incorporated and organized and is validly subsisting under the state laws of Nevada, it has the corporate power to own and lease its property and to carry on the business of Parent as now being conducted by it, and there are no restrictions on the business which may be carried on by Parent;

(ii). the authorized and issued capital of Parent consists of 125,000,000 number of common shares without par value, of which 26,442,123 shares are issued and outstanding as of the Closing Date.. No person, firm or corporation now has, or at Closing will have, any agreement or option or any right capable of becoming an agreement for the purchase, subscription or issuance of any of the unissued shares in the capital of Parent other than as noted herein.


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(iii). all necessary corporate action and proceedings have been taken by Parent and Parent’s shareholders to authorize the

Transaction and various agreements and covenants contemplated hereby, including, without limitation, the due and valid issuance of the Parent Shares at Closing to the Company Shareholders;

(iv). this Agreement has been duly authorized executed and delivered by Parent and constitutes legal, valid and binding obligations of Parent, enforceable in accordance with its terms except as may be limited by bankruptcy, insolvency and other similar laws relating to creditors’ rights generally and except that specific performance, injunction and other equitable remedies may only be granted in the discretion of a Court of competent jurisdiction;

(v). as to such other matters incidental to the matters herein contemplated as the Company and or its counsel may reasonably request.

(b) the president of Parent will furnish a certificate certifying:

(i) that each of the covenants, representations and warranties of Parent set out in this agreement are true and correct as at Closing and that Parent has performed its covenants contained herein, provided however that the receipt of such certificates and the closing of the transaction contemplated by this Agreement shall not be a waiver of the covenants, representations and warranties contained in this Agreement, which covenants, representations and warranties shall survive Closing and, notwithstanding the closing of the exchange of shares contemplated by this Agreement, shall continue in full force and effect, subject to Article V. Post Closing Conditions herein;

(ii) that all necessary steps and corporate proceedings, including the approval of the Board of Directors and the shareholders of Parent, as approved by the Company (or its counsel), shall be taken to permit the Parent Shares to be duly and regularly issued to the Company’s shareholders or its nominee(s);

(iii) that the Company Shareholders shall be furnished with evidence satisfactory to it at Closing that there are no arrears of or liabilities for taxes (including taxes on income), rates, assessments or other charges;

(iv) that at or before Closing, there shall have been obtained from the appropriate federal, provincial, state, municipal or other governmental or administrative bodies all such approvals or consents as may be required- if applicable- to permit the exchange of the Company Shares and the issuance of the Parent Shares herein provided for to be completed; and

(v) Parent shall have obtained a lease for the necessary acreage (not to exceed 50 acres), on a ninety-nine year lease, at the Port of Helena, Arkansas location, for permitting and construction of a 10,000 sq ft Biomass facility;

(vi) that at Closing, Parent shall hold all such licences and permits as may be requisite for the carrying on of its intended business contemplated by this Agreement.


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In case any of the foregoing conditions shall not be fulfilled at or before Closing, the Company may, by notice to Parent, terminate this agreement at which time all obligations of Parent and the Company Shareholders shall be terminated and the parties shall bear their own costs, including all legal fees. In such event, the parties will deliver mutual releases from all claims, demands, actions, and obligations under this Agreement.

5.2 The respective obligations of each party to this Agreement to effect the Transaction shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

(a) Required Approvals. This Agreement and the Transaction have been duly approved and adopted, by the requisite vote, if any, of the Company’s stockholders and by the requisite actions of the Board of Directors of the Company under the laws of the State of Nevada and the Company Charter Documents, and by the requisite actions of the Board of Directors of Parent and the stockholders of Parent under the laws of the State of Nevada and the Parent Charter Documents;

(b) Assumption of Options and Warrants. The Company shall have taken all necessary steps to effectuate the provisions of Sections 1.6(b) and (c), including obtaining all necessary consents and releases, if any, from the holders of Company Stock Options and Company Common Stock Warrants. The Company shall have obtained agreements terminating all pre-emptive rights; and

(c) Blue Sky Laws. The issuance of Parent Common Stock to be issued under this Agreement shall be exempt from, or have been qualified under, the Blue Sky Laws of each appropriate jurisdiction to the satisfaction of Parent and the Company and their respective counsels;

(d) Both Parent and Company shall have completed its due diligence of the other to the reasonable satisfaction of each;

(e) Both Parent and Company shall have performed and complied with all covenants, agreements, covenants and conditions required by this Agreement to be performed or complied with by it at or prior to Closing.

(f) neither any event shall have occurred, nor any action, act or proceedings or litigation of any kind whatsoever shall have been commenced which, in the opinion of the Company, is directly related to the transactions contemplated hereunder and is, or may be, materially adverse to the Company;

(g) there shall have been no material adverse change in the business, condition, assets, liabilities, operations, or financial performance of Parent since the date of the Agreement. In case any of the foregoing conditions shall not be fulfilled at or before Closing, both Parent and Company may, by notice to to the other, terminate this agreement at which time all obligations of Parent and the Company shall be terminated and the parties shall bear their own costs, including all legal fees. In such event, the parties will be mutually released from all claims, demands, actions, and obligations under this Agreement.


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ARTICLE VI

POST-CLOSING COVENANTS

6.1 Post-Closing Covenants. The parties hereto acknowledge and agree that the agreements contained in this Section 9.1 are an integral part of

the transactions contemplated by this Agreement and that, without these agreements, neither party would enter into this Agreement. The parties hereto acknowledge and agree that the failure by Parent or the Company to satisfy, perform and comply with the covenants set forth in this Section 9.1 ("Post-Closing Covenants") following the Closing will have a material adverse effect on Surviving Corporation. During the period beginning upon the Closing and, unless for a longer period indicated below, ending on the second anniversary of the Closing, Parent agrees to, and the Company agrees to cause Parent to, satisfy the following agreements and covenants:

(a) Equity Financing. On or before (i) May 30, 2007, on terms and conditions acceptable to all members of Parent’s Board of Directors, Parent shall have completed, closed and received the proceeds from a private placement offering of its common stock, exempt from registration under the Securities Act pursuant to Regulation D promulgated thereunder, with net proceeds of a minimum of $7,500,000, and (ii) April 30, 2008, on terms and conditions acceptable to all members of Parent’s Board of Directors, Parent shall have completed, closed and received the proceeds from a private placement offering of its common stock, exempt from registration under the Securities Act pursuant to Regulation D promulgated thereunder, with net proceeds sufficient for the construction and implementation of the desired facility and technologies.

(b) Reporting Company. On or before September 1, 2007, merge with a Section 12(g) reporting company in compliance with and current in its reporting requirements under the Exchange Act, and to remain quoted on, at a minimum, a nationally-recognized stock in the United States. The parties hereto agree and acknowledge that the monetary cost of the publicly traded shell and any dilution caused by the acquisition of the Parent shall be borne exclusively by the stockholders of the Parent immediately prior to the Effective Date.

(c) Upon completion of the merger with a Reporting Company under Section 9.1(b) of this Agreement, Parent shall file within the statutory time limits any required filings or notifications with the SEC, NASDAQ and any other federal, state or regulatory agency including any agency or organization with jurisdiction over any exchange on which the Parent’s securities are listed or traded, and responds in a timely manner, and to the satisfaction of the SEC, to any review or inquiry by the SEC to the Transaction Form 8-K and the U.S. GAAP Financial Statements contained therein.

(d) (i) Certify in writing to any person holding restricted shares of Parent Common Stock as of the date of this Agreement that Parent has filed all of the reports required to be filed by it under the Exchange Act to enable such person to sell such person's restricted stock under Rule 144 or 145, as may be applicable in the circumstances, or will inform such person in writing that it has not filed any such report or reports, upon being informed in writing by such person of its intent to sell any shares under Rule 144 or Rule 145 promulgated under the Securities Act (including any rule adopted in substitution or replacement thereof), (ii) if any certificate representing any restricted shares of Parent Common Stock is presented to Parent’s Transfer Agent for registration of transfer in connection with any sale theretofore made or to be made under Rule 144 or 145, provided such certificate is duly endorsed for transfer by the appropriate person(s) or accompanied by a separate stock power duly executed by the appropriate person(s) in each case with reasonable assurances that such endorsements are genuine and effective, and is accompanied by an opinion of counsel satisfactory to Parent and its counsel that such transfer has complied with the requirements of Rule 144 or 145 (“Opinion”), as the case may be, promptly instruct the Transfer Agent to register such transfer and to issue one or more new certificates representing such shares to the transferee and, if appropriate under the provisions of Rule 144 or 145, as the case may be, free of any stop transfer order or restrictive legend.


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(e) The Parent shall invite Sorrento Financial Partners, LLC to attend all meetings of the board or directors of Parent in a nonvoting

observer capacity and, in this respect, shall give Sorrento Financial Partners, LLC copies of all notices, minutes, consents and other materials that it provides to members of the board of directors.

(f) Post-Closing Indemnification. Parent hereby agrees to hold harmless and indemnify the former officers and directors of Parent and Company to the full extent authorized or permitted by the provisions of the Nevada Revised Statues, as such may be amended from time to time, and the Company’s Bylaws, as such may be amended, for a period of five (5) years from the Effective Date pursuant to the form of Indemnification Agreement in substantially the form as attached hereto as Exhibit 5.1(e)..

(g) Directors and Officers Liability Insurance Extended Reporting Endorsement. Parent shall purchase at Parent’s expense an extended reporting endorsement, or a "tail," for each claims-made insurance policy now in effect at the Company to provide continued coverage for any event or omission which may have occurred during the policy period which could give rise to coverage under such policy for a period of five (5) years. Parent shall name Company and each of its current and former officers and directors as additional insureds with respect to each such extended reporting endorsement.

(h) Disposition of Securities Held by Company. Parent agrees that it will not sell or otherwise dispose, or cause to be sold or otherwise cause to be disposed, more than five thousand (5,000) shares of any securities or “cash equivalents,” held in the name of the Company on the Effective Date, in any five day period.


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ARTICLE VII

MISCELLANEOUS

7.1 Unless herein otherwise expressly provided, any notice, request, direction, consent, waiver, extension, agreement or other communication

(a “Communication”) that is or may be given or made hereunder shall be in writing addressed as follows:

To be valid for the purposes of this Agreement, any Communication is to be written and either personally delivered to the addressee or sent by facsimile transmission to the addressee, and a notice or communication which is:

a. personally delivered, if delivered before 4:00 p.m. (local time at place of delivery) on a day other than a Saturday, Sunday or statutory holiday (a “Business Day”), deemed to have been given and received on that day and, in any other case deemed to have been given and received on the first Business Day after the day on which it is delivered; or

b. sent by facsimile transmission is, if sent before 4:00 p.m. (local time at place of transmission) on a Business Day, deemed to have been given and received on that day and, in any other case, deemed to have been given and received on the first Business Day after the day on which it is sent.

7.2 This agreement supersedes all other prior discussions or agreements with respect to this transaction and any such discussions or

agreements are hereby declared to be rescinded and are null and void.

7.3 This Agreement shall be governed by the laws of the STATE OF NEVADA and the federal laws of the U.S., applicable therein.

7.4 No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the first sentence of this Section, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.


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If to Parent, at 1755 CENTRAL “I” DENVER CO. 80211 Attention: FRITZ C. VOELKER Telephone: (303) 377-0029 Fax: (303) 455-1490 If to Company, at 1800 Century Park East Suite 600, Los Angeles, CA 90067 Attention: Steve Racoosin Telephone: (310) 556-0025 Fax: (303) 556-0026

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7.5 This Agreement may be signed in as many counterparts as may be necessary, each of which so signed shall be deemed to be an original,

and such counterparts together shall constitute one and the same instrument and notwithstanding the date of execution shall be deemed to bear the date as set forth above and execution and delivery by facsimile (fax) transmission shall be deemed to be good and sufficient execution and delivery.

7.6 Each of the parties represents and warrants that they have not authorized any broker, finder or agent to represent them in connection with the negotiation of this transaction. Each agrees to indemnify and save the others harmless from any other claim, commission, finder’s or broker’s fee because of any act, omission, or statement of such party which causes the incurring of any other claim, commission, finder’s or broker’s fee.

7.7 All parties agree to use their reasonable best efforts to cooperate, provide, or enter into any agreements required to give effect to this transaction and to satisfy the conditions of closing contained in this agreement.

7.8 Each party has been advised to seek its own independent legal, tax, financial or other professional advice and acknowledges that it has had the opportunity to do so. No party to this agreement is making any representation or warranty as to the tax consequences of the transfer contemplated hereby. Each party agrees to obtain and be guided by its own legal, tax and securities advisor. The Company Shareholders has satisfied itself that the transactions contemplated herein do not contravene U.S securities laws and there is an appropriate securities exemption to enable it to complete the transactions contemplated herein.

7.9. Any disputes or claims arising under or in connection with this Agreement or the transactions contemplated hereunder shall be resolved by binding arbitration. Notice of a demand to arbitrate a dispute by either party shall be given in writing to the other at their last known address. Arbitration shall be commenced by the filing by a party of an arbitration demand with the American Arbitration Association (“AAA”) in its office in Las Vegas, Nevada USA. The arbitration and resolution of the dispute shall be resolved by a single arbitrator appointed by the AAA pursuant to AAA rules. The arbitration shall in all respects be governed and conducted by applicable AAA rules, and any award and/or decision shall be conclusive and binding on the parties. The arbitration shall be conducted in Las Vegas, Nevada. The arbitrator shall supply a written opinion supporting any award, and judgment may be entered on the award in any court of competent jurisdiction. Each party shall pay its own fees and expenses for the arbitration, except that any costs and charges imposed by the AAA and any fees of the arbitrator for his services shall be assessed against the losing party by the arbitrator. In the event that preliminary or permanent injunctive relief is necessary or desirable in order to prevent a party from acting contrary to this Agreement or to prevent irreparable harm prior to a confirmation of an arbitration award, then either party is authorized and entitled to commence a lawsuit solely to obtain equitable relief against the other pending the completion of the arbitration in a court having jurisdiction over the parties. All rights and remedies of the parties shall be cumulative and in addition to any other rights and remedies obtainable from arbitration.


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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above.


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BIOGOLD FUELS CORPORATION By: WALTER WENDLAND, CHAIRMAN BIO-GOLD ACQUISITION, INC. By: WALTER WENDLAND, CHAIRMAN FULL CIRCLE INDUSTRIES, INC. By: STEVE RACOOSIN, CEO

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FULL CIRCLE INDUSTRIES, INC.

2004 STOCK OPTION PLAN

1. Purposes of this Plan. The purposes of this 2004 Stock Option Plan are to attract and retain the best available personnel, to provide additional incentive to the Employees of Full Circle Industries, Inc. (the “Company”) and any of its Subsidiaries, to promote the success of the Company’s business and to enable the Employees to share in the growth and prosperity of the Company by providing them with an opportunity to purchase stock in the Company.

Options granted hereunder may be either Incentive Stock Options or Nonstatutory Stock Options, at the discretion of the Board and as reflected in the terms of the written stock option agreement.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Board” shall mean the Board of Directors of the Company.

(b) “Code” shall mean the Internal Revenue Code of the 1986, as amended.

(c) “Common Stock” shall mean the Common Stock of the Company.

(d) “Company” shall mean Full Circle Industries, Inc., a corporation duly organized under the laws of the State of Nevada.

(e) “Committee” shall mean the Committee appointed by the Board in accordance with Section 4 of this Plan, if one is appointed.

(t) “Continuous Employment” or “Continuous Status as an Employee” shall mean the absence of any interruption or termination of employment or service as an Employee, Director or Consultant by or to the Company or any Parent or Subsidiary of the Company which now exists or is hereafter organized or acquired by or acquires the Company. Continuous Employment shall not be considered interrupted in the case of sick leave, military leave or any other leave of absence approved by the Board or in the event of transfers between locations of the Company or between the Company, its Parent, any of its Subsidiaries or its successors.

(g) “Corporate Change’ shall mean one of the following events: (i) the merger, consolidation or other reorganization of the Company in which the outstanding Common Stock is converted into or exchanged for a different class of securities of the Company, a class of securities of any other issuer (except a Parent or Subsidiary of the Company), cash or other property (ii) the sale, lease or exchange of all or substantially all of the assets of the Company to any other corporation or entity (except a Parent or Subsidiary of the Company); or (iii) the adoption by shareholders of the Company of a plan of liquidation or dissolution. The following events are not defined as a “Corporate Change”: (i) a merger, consolidation or reorganization of the Company which would result in the voting stock of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company, at least sixty percent (60%) of the combined voting power of the voting stock of the Company or such surviving entity outstanding immediately after such merger, consolidation or reorganization of the Company, or (ii) merger, consolidation or reorganization of the Company effected to implement a recapitalization of the Company (or similar transaction) in which no person acquires more than forty-nine percent (49%) of the combined voting power of the Company’s then outstanding stock;


(h) “Employee” shall mean any person, including officers and directors, employed by the Company, its Parent, any of its

Subsidiaries or its successors; or, for purposes of eligibility for Nonstatutory Stock Options, any person employed by the Company, including officers and directors, or any consultant to, or director of, the Company, or any Parent or Subsidiary of the Company, whether or not such consultant or director is an employee of such entities.

(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any successor legislation.

(j) “Incentive Stock Option” shall mean an Option intended to quali~ as an incentive stock option within the meaning of Section 422 of the Code.

(k) “Non-Employee Director” shall mean a director who is a “Non-Employee Director,” as such term is defined under Rule 16b-3(b)(3)(i) promulgated pursuant to the Exchange Act and any applicable releases and opinions or the Securities and Exchange Commission.

(1) “Nonstatutory Stock Option” shall mean an Option which is not an Incentive Stock Option.

(m) “Option” shall mean a stock option granted pursuant to this Plan.

(n) “Option Agreement” shall mean a written agreement in such form or forms as the Board (subject to the terms and conditions of this Plan) may from time to time approve, evidencing an Option.

(o) “Optioned Stock” shall mean the Common Stock subject to an Option.


(p) “Optionee” shall mean an Employee who is granted an Option.

(q) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Sections 424(e) and (g) of the

Code.

.

(r) “Plan” shall mean this 2004 Stock Option Plan.

(s) “Registration Date” shall mean the effective date of the first registration statement which is filed by the Company and declared effective pursuant to Section 12(g) of the Exchange Act, with respect to any class of the Company’s securities.

(t) “Securities Act” shall mean the Securities Act of 1933, as amended, or any successor legislation.

(u) “Share’ or “Shares” shall mean the Common Stock, as adjusted in accordance with Section 11 of this Plan.

(v) “Stock Purchase Agreement” shall mean an agreement in such form or forms as the Board (subject to the terms and conditions of this Plan) may from time to time approve, which is to be executed as a condition of purchasing Optioned Stock upon exercise of an Option.

(w) “Subsidiary” or “Subsidiaries” shall mean one or more subsidiary corporations, whether now or hereafter existing, as defined in Sections 424(0 and (g) of the Code.

3. Stock Subject to this Plan. Subject to the provisions of Section 11 of this Plan,

If (a) an Option should expire or become unexercisable for any reason without having been exercised in fill or (b) if the Company

repurchases Shares from the Optionee pursuant to the terms of a Stock Purchase Agreement (provided that the Optionee did not receive benefits of ownership, such as dividends, which would destroy the exemption from the provisions of Section 16(b) of the Exchange Act provided by Rule 16b-3 promulgated pursuant to the Exchange Act), the unpurchased Shares or repurchased Shares, respectively, which were subject thereto shall, unless this Plan shall have been terminated, return to this Plan and become available for other Options under this Plan.


• the maximum number of Shares which may be optioned and sold under this Plan is Ten Million Shares. The Shares may be authorized, but unissued or reacquired Shares other than reacquired Shares delivered pursuant to Section 7(c)(iv) hereof as payment of consideration in the exercise of an option.

The Company intends that as long as it is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and is not an

investment company registered or required to be registered under the Investment Company Act of 1940, as amended, all offers and sales of Options and Common Stock issuable upon exercise of any Option shall be exempt from registration under the provisions of Section 5 of the Securities Act, and this Plan shall be administered in such a manner so as to preserve such exemption.

The Company intends for this Plan to constitute a written compensatory benefit plan within the meaning of Rule 701(b) of 17 CFR Section 230.701 (“Rule 701”) promulgated by the Securities and Exchange Commission pursuant to the Securities Act. Unless otherwise designated by the Committee at the time an Option is granted, all options granted under this Plan by the Company, and the issuance of any Shares upon exercise thereof, are intended to be granted in reliance on Rule 701.

4. Administration of this Plan.

(a) Procedure. This Plan shall be administered by the Board. The Board may appoint a Committee consisting of two (2) or more members of the Board (or such greater number as is required to qualify for the exemption from the provisions of Section 16(b) of the Exchange Act provided by Rule lób-3 promulgated pursuant to the Exchange Act) to administer this Plan on behalf of the Board, subject to such terms and conditions as the Board may prescribe. Once appointed, the Committee shall continue to serve until otherwise directed by the Board. From time to time, the Board may increase the size of the Committee and appoint additional members of the Board thereto, remove members (with or without cause) and appoint new members of the Board in substitution therefor, fill vacancies, however caused, and remove all members of the Committee and, thereafter, directly administer this Plan. Members of the Board or Committee who are either eligible for Options or have been granted Options may vote on any matters affecting the administration of this Plan or the grant of Options pursuant to this Plan, except that no such member shall act upon the granting of an Option to such person nor shall any such member’s presence at a meeting of the Board of Directors establish the existence of a quorum at any meeting of the Board or the Committee during which action is taken with respect to the granting of an Option to him.

(b) Procedure After ReStration Date. Notwithstanding the provisions of Section 4(a) above, after the Registration Date this Plan shall be administered either by: (i) the full Board, provided that at all times each member of the Board is a Non-Employee Director; or (ii) a Committee which at all times consists solely of Board members who are Non-Employee Directors. After the Registration Date, the Board shall take all action necessary to administer this Plan in accordance with the then-effective provisions of Rule 1 6b-3 promulgated under the Exchange Act, provided that any amendment to this Plan required for compliance with such provisions shall be made in accordance with Section 13 of this Plan.


(c) Powers of the Board and/or Committee. Subject to the provisions of this Plan, the Committee or the Board, as appropriate, shall

have the authority, in its discretion: (i) to grant Incentive Stock Options and Nonstatutory Stock Options; (ii) to determine, upon review of relevant information and in accordance with Section 7 of this Plan, the fair market value per Share; (iii) to determine the exercise price of the Options, which exercise price and type of consideration shall be determined in accordance with Section 7 of this Plan; (iv) to determine the Employees to whom, and the time or times at which, Options shall be granted, and the number of Shares to be subject to each Option; (v) to prescribe, amend and rescind rules and regulations relating to this Plan; (vi) to determine the terms and provisions of each Option Agreement and each Stock Purchase Agreement (each of which need not be identical with the terms of other Option Agreements and Stock Purchase Agreements) and, with the consent of the holder thereof, to modify or amend each Option Agreement and Stock Purchase Agreement; (vii) to determine whether a stock repurchase agreement or other agreement will be required to be executed by any Employee as a condition to the exercise of an Option, and to determine the terms and provisions of any such agreement (which need not be identical with the terms of any other such agreement) and, with the consent of the Optionee, to amend any such agreement; (viii) to interpret this Plan, the Option Agreements, the Stock Purchase Agreements or any agreement entered into with respect to the grant or exercise of Options; (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted by the Board or to take such other actions as may be necessary or appropriate with respect to the Company’s rights pursuant to Options or agreements relating to the grant or exercise thereof; and (x) to make such other determinations and establish such other procedures as it deems necessary or advisable for the administration of this Plan.

(d) Effect of the Board’s or Committee’s Decision. All decisions, determinations and interpretations of the Board or the Committee shall be final and binding on all Optionees and any other holders of Options.

5. Eligibility. Options may be granted only to Employees, which, as defined herein, includes consultants. An Employee who has been granted an Option may, if such Employee is otherwise eligible, be granted additional Options.

6. Term of Plan. This Plan shall become effective upon the earlier to occur of its adoption by the Board or its approval by vote of a majority of the outstanding shares of the • Company’s capital stock entitled to vote on the adoption of this Plan. This Plan shall continue in effect for a term of ten (10) years unless sooner

terminated in accordance with the terms and provisions of this Plan.

7. Oi,tion Price and Consideration.


(a) Exercise Price. The exercise price per Share for the Shares to be issued pursuant to the exercise of an Option shall be such price as is determined by the Board; nrovided, however, that such price shall in no event be less than eighty-five percent (85%) with respect to Nonstatutory Stock Options, and one hundred percent (100%) with respect to Incentive Stock Options, of the fair market value per Share on the date of grant. In the case of an Option granted to an Employee who, at the time the Option is granted, owns stock (as determined under Section 424(d) of the Code) constituting more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Parent or Subsidiaries, the exercise price per Share shall be no less than one hundred ten percent (110%) of the fair market value per Share on the date of grant.

(b) Fair Market Value. The fair market value per Share on the date of grant shall be determined by the Board in its sole discretion, exercised in good faith and consistent with the laws of The State of Delaware; provided, however, that where there is a public market for the Common Stock, the fair market value per Share shall be the average of the closing bid and asked prices of the Common Stock on the date of grant, as reported in The Wall Street Journal (or, if not so reported, as otherwise reported by the National Association of Securities Dealers Automated Quotations (“NASDAQ”) System), or, in the event the Common Stock is listed on a stock exchange or on the NASDAQ System, the fair market value per Share shall be the closing price on the exchange or on the NASDAQ System as of the date of grant of the Option, as reported in The Wall Street Journal.

(c) Payment of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Board and may consist entirely of cash, check, promissory notes, Shares held by the Optionee for the requisite period necessary to avoid a charge to the Company’s earnings for financial reporting purposes which have a fair market value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, or any combination of such methods of payment. Subject to subparagraphs (i) through (iv) hereto, utilization of Shares as the method of payment may be completed by either (a) the tender of Shares then held by the Optionee, or (b) the withholding of Shares which would otherwise be issued pursuant to an Option pursuant to a broker-dealer sale and remittance procedure described in subparagraph (iii) hereto. In making its determination as to the type of consideration to accept, the Board shall consider if acceptance of such consideration is deemed to be such as may be reasonably expected to benefit the Company.

(i) If the consideration for the exercise of an Option is a promissory note, it shall be a full recourse promissory note

executed by the Optionee, bearing interest at a rate which shall be sufficient to preclude the imputation of interest under the applicable


• provisions of the Code. Until such time as the promissory note has been paid in full, the Company may retain the Shares purchased upon exercise of the Option in escrow as security for payment of the promissory note.

(ii) If the consideration for the exercise of an Option is the surrender of previously acquired and owned Shares, the Optionee

will be required to make representations and warranties satisfactory to the Company regarding his or her title to the Shares used to effect the purchase, including, without limitation, representations and warranties that the Optionee has good and marketable title to such Shares free and clear of any and all liens, encumbrances, charges, equities, claims, security interests, options or restrictions and has full power to deliver such Shares without obtaining the consent or approval of any person or governmental authority other than those which have already given consent or approval in a form satisfactory to the Company. The value of the Shares used to effect the purchase shall be the fair market value of those Shares as determined by the Board in its sole discretion, exercised in good faith.

(iii) If the consideration for the exercise of an Option is to be paid through a broker-dealer sale and remittance procedure,

the Optionee shall provide (1) irrevocable written instructions to a designated brokerage firm to effect the immediate sale of the purchased shares and to remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate option price payable for the purchased Shares plus all applicable Federal and State income and employment taxes required to be withheld by the Company in connection with such purchase and (2) written instructions to the Company to

.

deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction.

(iv) If an Optionee is permitted to exercise an Option by delivering shares of the Company’s Common Stock, the option agreement covering such Option may include provisions authorizing the Optionce to exercise the Option, in whole or in part, by: (1) delivering whole shares of the Company’s Common Stock previously owned by such Optionee (whether or not acquired through the prior exercise of a stock option) having a fair market value equal to the option price; and/or (2) directing the Company to withhold from the Shares that would otherwise be issued upon exercise of the Option that number of whole Shares having a fair market value equal to the option price. Shares of the Company’s Common Stock so delivered or withheld shall be valued at their fair market value on the date of exercise of the Option, as determined by the Committee and/or the Board, as appropriate. Any balance of the exercise price shall be paid in cash or by check or a promissory note, each in accordance with the terms of this Section 7. Any Shares delivered or withheld in accordance with this provision shall again become available for purposes of this Plan and for Options subsequently granted thereunder to the extent permissible pursuant to Section 3 of this Plan.


8. Options.

(a) Terms and Provisions of Options. As provided in Section 4 of this Plan and subject to any limitations specified herein, the

Board and/or Committee shall have the

(b) Term of Option. The term of each Option may be up to ten (10) years from the date of grant thereof as determined by the Board

upon the grant of the Option and specified in the Option Agreement, except that the term of an Option granted to an Employee who, at the time the Option is granted, owns stock comprising more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or its Parent or

(c) Exercise of Option.

(i) Procedure for Exercise: Rights as a Shareholder. Any Option shall be exercisable at such times, in such installments

and under such conditions as may be determined by the Board and specified in the Option Agreement, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of this Plan.

.

An Option may be exercised in accordance with the provisions of this Plan as to all or any portion of the Shares then exercisable under an Option, from time to time during the term of the Option. An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company at its principal business office in accordance with the terms of the Option Agreement by the person entitled to exercise the Option and, except when the broker-dealer sale and remittance procedure described in Section 7(c)(iii) hereto is used, full payment for the Shares with respect to which the Option is exercised has been received by the Company, accompanied by an executed Stock Purchase Agreement and any other agreements required by the terms of this Plan and/or the Option Agreement. Full payment may consist of such consideration and method of payment allowable under Section 7 of this Plan. Until the Option is properly exercised in accordance with the terms of this paragraph, no right to vote or receive dividends or any other rights as a stockholder exist with respect to the Optioned Stock. No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Option is exercised, except as provided in Section 11 of this Plan.


• authority to determine the terms and provisions of any Option granted under this Plan or any agreement required to be executed in connection with the grant or exercise of an Option. Each Option granted pursuant to this Plan shall be evidenced by an Option Agreement. Options granted pursuant to this Plan are conditioned upon the Company obtaining any required permit or order from appropriate governmental agencies authorizing the Company to issue such Options and Shares issuable upon exercise thereof.

• Subsidiaries, shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

As soon as practicable after any proper exercise of an Option in accordance with the provisions of this Plan, the Company shall,

without transfer or issue tax to the Optionee, deliver to the Optionee at the principal executive office of the Company or such other place as shall be mutually agreed upon between the Company and the Optionee, a certificate or certificates representing the Shares for which the Option shall have been exercised. The time of issuance and delivery of the certificate(s) representing the Shares for which the Option shall have been exercised may be postponed by the Company for such period as may be required by the Company, with reasonable diligence, to comply with any applicable listing requirements of any national or regional securities exchange or any law or regulation applicable to the issuance or delivery of such Shares. No Option may be exercised unless this Plan has been duly approved by the shareholders of the Company in accordance with applicable law. Notwithstanding anything to the contrary herein, the terms of.a Stock Purchase Agreement required to be executed and delivered in connection with the exercise of an Option may require the certificate or certificates representing the Shares purchased upon exercise of an Option to be delivered and deposited with the Company as security for the Optionee’s faithful performance of the terms of his Stock Purchase Agreement.

Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of this Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(ii) Termination of Status as an Employee. If an Optionee ceases to serve as an Employee for any reason other than death or disability and thereby terminates his or her Continuous Status as an Employee, such Optionee shall have the right to exercise the Option at any time within thirty (30) days (or such other period of time not exceeding three (3) months as is determined by the Board at the time of granting the Option), following the date such Optionee ceases his or her Continuous Status as an Employee of the Company to the extent that such Optionee was entitled to exercise the Option at the date of such termination; provided,

.

however, that no Option shall be exercisable after the expiration of the term set forth in the Option Agreement. To the extent that such Optionee was not entitled to exercise the Option at the date of such termination, or if such Optionee does not exercise such Option (which such Optionee was entitled to exercise) within the time specified herein, the Option shall terminate.


(iii) Death or Disability of Optionee. If an Optionee ceases to serve as an Employee due to death or disability and thereby

terminates his or her Continuous Status as an Employee, the Option may be exercised at any time within six (6) months following the date of death or termination of employment due to disability, in the case of death, by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, or, in the case of disability, by the Optionee, but in any case only to the extent the Optionee was entitled to exercise the Option at the date of his or her termination of employment by death or disability; provided, however, that no Option shall be exercisable after the expiration of the Option term set forth in the Option Agreement. To the extent that such Optionee was not entitled to exercise such Option at the date of his or her termination of employment by death or disability or if such Option is not exercised (to the extent it could be exercised) within the time specified herein, the Option shall terminate.

(iv) Extension of Time to Exercise. Notwithstanding anything to the contrary in this Section 8, the Board may at any time and from time to time prior to the termination of a Nonstatutory Stock Option, with the consent of the Optionee, extend the period of time during which the Optionee may exercise his or her Nonstatutory Stock Option following the date the Optionee ceases such Optionee’s Continuous Status as an Employee; provided, however, that (1) the maximum period of time during which a Nonstatutory Stock Option shall be exercisable following such termination date shall not exceed an aggregate of six (6) months, (2) the Nonstatutory Stock Option shall not become exercisable after the expiration of the term of such Option as set forth in the Option Agreement as a result of such extension, and (3) notwithstanding any extension of time during which the Nonstatutory Stock Option may be exercised, such Option, unless otherwise amended by the Board, shall only be exercisable to the extent to which the Optionee was entitled to exercise it on the date Optionee ceased Continuous Status as an Employee. To the extent that such Optionee was not entitled to exercise the Option at the date of such termination, or if such Optionee does not exercise an Option which Optionee was entitled to exercise within the time specified herein, the Option shall terminate.

9. Limit on Incentive Stock Options. The aggregate fair market value (determined at the time an Incentive Stock Option is granted) of the Shares which may be acquired upon exercise of Incentive Stock Options for the first time by an Optionee during any calendar year under all incentive stock option plans of the Company, its Parents or its Subsidiaries, if any, cannot exceed One Hundred Thousand Dollars ($100,000). Incentive Stock Options which exceed this limit must be treated as Nonstatutory Stock Options. The Board shall determine, in accordance with the Code, which of an Optionee’s Incentive Stock Options will not be treated as Incentive Stock Options as a result of such limitation and will so notify the Optionee as soon as practicable following such determination.


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11. Adjustments Upon Chances in Capitalization or Corporate Change.

(a) Subject to any required action by the shareholders of the Company, the number of Shares covered by each outstanding Option, and the number of Shares which have been authorized for issuance under this Plan but as to which no Options have yet been granted or which have been returned to this Plan upon cancellation or expiration of an Option or repurchase of shares from an Optionee upon termination of employment or service, as well as the exercise or purchase price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, combination or reclassification of the Common Stock, or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company (other than stock bonuses to Employees, including, without limitation, officers and directors); provided, however, that the conversion of any convertible securities of the Company shall not be deemed to have been effected without the receipt of consideration. Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or • securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or

price of Shares subject to this Plan or an Option.

(b) In the event of a Corporate Change effected by a transaction in which the consideration therefor consists only of stock of another issuer, then the Plan, all Options and Option Agreements in force at the date of the Corporate Change shall continue to be in full force and effect and shall be assumed by the merging or acquiring entity.

(c) In the event of a Corporate Change effected by a transaction in which the consideration therefor does not consist solely of the stock of another issuer (e.g., an all cash or part cash and part stock transaction), then all Options which are not vested and exercisable at that date shall tenninate immediately.

(d) No fractional shares of Common Stock shall be issuable on account of any action described in this Section, and the aggregate number of shares into which Shares then covered by the Option, when changed as the result of such action, shall be reduced to the largest number of whole shares resulting from such action, unless the Board, in its sole discretion, shall determine to issue scrip certificates in respect to any fractional shares, which scrip certificates, in such event, shall be in a form and have such terms and conditions as the Board in its discretion shall prescribe.


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• 10.Nontransferabilitv of Options. Options granted under this Plan may not be sold,• pledged, assigned, hypothecated, gifted, transferred or disposed of in any manner, either voluntarily or involuntarily by operation of

law, other than by will or by the laws of descent or distribution, and may be exercised during the lifetime of the Optionee only by such Optionee.

.

13. Amendment and Termination of this Plan.

(a) Amendment and Termination. The Board may amend or terminate this Plan from time to time in such respects as the Board may

deem advisable and shall make any amendments which may be required so that Options intended to be Incentive Stock Options shall at all times continue to be Incentive Stock Options for the purpose of the Code, except that, without approval of the holders of a majority of the outstanding shares of the Company’s capital stock, no such revision or amendment shall:

(i) Increase the number of Shares subject to this Plan, other than in connection with an adjustment under Section 11 of this Plan;

(ii) Materially change the designation of the class of Employees eligible to be granted Options;

(iii) Remove the administration of this Plan from the Board (other than to the Committee);

(iv) Materially increase the benefits accruing to participants under this Plan; or

(v) Extend the term of this Plan.

(b) Effect of Amendment or Termination. Except as otherwise provided in Section 11, any amendment or termination of this Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Company, which agreement must be in writing and signed by the Optionee and the Company.


12

• 12. Time of Granting Options. The date of grant of an Option shall be the date on which the Board makes the determination granting such Option; provided, however, that if the Board determines that such grant shall be as of some future date, the date of grant shall be such future date. Notice of the determination shall be given to each Employee to whom an Option is so granted within a reasonable time after the date of such grant.

14. Conditions Upon Issuance of Shares.

(a) Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery

of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the Exchange Act, applicable state securities laws, the rules and regulations promulgated thereunder, and the requirement of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

.

(b) As a condition to the exercise of an Option, the Board may require the person exercising such Option to execute an agreement with, and/or may require the person exercising such Option to make any representation and warranty to, the Company as may in the judgment of counsel to the Company be required under applicable law or regulation, including but not limited to a representation and warranty that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is appropriate under any of the aforementioned relevant provisions of law.

15. Reservation of Shares. The Company, during the term of this Plan, at all times shall reserve and keep available such number of Shares as shall be sufficient to satis& the requirements of this Plan.

The Company, during the term of this Plan, shall use diligent efforts to seek to obtain


13

• from appropriate regulatory agencies any requisite authorization in order to issue and sell such number of Shares as shall be sufficient to satis& the requirements of this Plan. The inability of the Company to obtain the requisite authorization(s) deemed by the Company’s counsel to be necessary for the lawful issuance and sale of any Shares hereunder, or the inability of the Company to confirm to its satisfaction that any issuance and sale of any Shares hereunder will meet applicable legal requirements, shall relieve the Company of any liability in respect to the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

16. Stock Option and Stock Purchase Agreements. Options shall be evidenced by written stock option agreements in such form or forms as the Board shall approve from time to time. Upon the exercise of an Option, the Optionee shall sign and deliver to the Company a

17. Shareholder Approval. Continuance of this Plan shall be subject to approval by the shareholders of the Company within twelve (12)

months before or after the date this Plan is adopted by the Board. If such shareholder approval is obtained at a duly held shareholders’ meeting, it may be obtained by the affirmative vote of the holders of a majority of the outstanding shares of the Company entitled to vote thereon. All Options granted prior to shareholder approval of this Plan are subject to such approval, and if such approval is not obtained within twelve (12) months before or after the date this Plan is adopted by the Board all such Options shall expire and shall be of no further force or effect.

18. Taxes, Fees. Expenses and Withholding of Taxes.

(a) The Company shall pay all original issue and transfer taxes (but not income taxes, if any) with respect to the grant of Options and/or the issue and transfer of Shares pursuant to the exercise thereof, and all other fees and expenses necessarily incurred by the Company in connection therewith, and will from time to time use diligent efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

(b) The grant of Options hereunder and the issuance of Shares pursuant to the exercise thercof is conditioned upon the Company’s reservation of the right to withhold, in accordance with any applicable law, from any compensation payable to the Optionee any taxes required to be withheld by federal, state or local law as a result of the grant or exercise of such Option or the sale of the Shares issued upon exercise thereof. To the extent that compensation or other amounts, if any, payable to the Optionee are insufficient to pay any taxes required to be so withheld, the Company may, in its sole discretion, require the Optionee, as a condition of the exercise of an Option, to pay in cash to the Company an amount sufficient to cover such tax liability or otherwise to make adequate provision for the Company’s satisfaction of its withholding obligations under federal and state law.

(c) The Board or the Committee may, in its discretion and upon such terms and conditions as it may deem appropriate (including the applicable safe-harbor provisions of SEC Rule 16b-3 and interpretations thereof by the staff of the Securities and Exchange Commission) provide any or all holders of outstanding option grants under this Plan with the election to have the Company withhold, from the shares of Common Stock otherwise issuable upon the exercise of such options, one or more of such shares with an aggregate fair market value equal to the designated percentage (any multiple of 5% specified by the optionee) of the Federal and State income taxes (“Taxes”) incurred in connection with the acquisition of such


14

• Stock Purchase Agreement (if required to be executed and delivered to the Company by an Optionee as a condition to the exercise of an Option) in such form or forms as the Board shall approve from time to time.

• Shares. In lieu of such direct withholding, one or more optionees may also be granted the right to deliver shares of Common Stock to the Company in satisfaction of such Taxes. The withheld or delivered shares shall be valued at the Fair Market Value on the applicable determination date for such Taxes or such other date required by the applicable safe-harbor provisions of SEC Rule 1 6b-3.

19. Liability of Company. The Company, its Parent or any Subsidiary which is in existence or hereafter comes into existence shall not be

liable to an Optionee or other person if it is determined for any reason by the Internal Revenue Service or any court having jurisdiction that any Options intended to be Incentive Stock Options granted hereunder do not qualify as incentive stock options within the meaning of Section 422 of the Code.

20. Information to Optionee. The Company shall provide without charge at least annually to each Optionee during the period his or her Option is outstanding a balance sheet and income statement of the Company. In the event that the Company provides annual reports or periodic reports to its shareholders during the period in which an Optionee’s Option is outstanding, the Company shall provide to each Optionee a copy of each such report.

21. Notices. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail, as first class, registered or certified mail, with postage and fees prepaid and addressed (i) if to the Company, at its principal place of business, attention: Secretary, or (ii) if to the Optionee at his or her address as set forth on the signature page of his or her Option Agreement, or at such other address as either party may from time to time designate in writing to other. It shall be the obligation of each Optionee and each transferee holding Shares purchased upon exercise of an Option to provide the Secretary of the Company, by letter mailed as provided hereinabove, with written notice of his or her direct mailing address.

22. No Enlargement of Employee Rights. This Plan is purely voluntary on the part of the Company, and the continuance of this Plan shall not be deemed to constitute a contract between the Company and any Employee, or to be consideration for or a condition of the employment or service of any Employee. Nothing contained in this Plan shall be deemed to give any Employee the right to be retained in the employ or service of the Company, its Parent, Subsidiary or a successor corporation, or to interfere with the right of the Company or any such corporations to discharge or retire any Employee at any time with or without cause and with or without notice. No Employee shall have any right to or interest in Options authorized hereunder prior to the grant thereof to such Employee, and upon such grant such Employee shall have only such rights and interests as are expressly provided herein, subject, however, to all applicable provisions of the Company’s Articles of Incorporation, as the same may be amended from time to time.


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23. Legends on Certificates.

(a) Federal Law. Unless an appropriate registration statement is filed pursuant to the Securities Act of 1933 with respect to the

Options and Shares issuable under this • Plan, each document or certificate representing such Options or Shares shall be endorsed thereon with a legend substantially as follows:

“THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SALE, TRANSFER, OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

(b) California Legend. If required by the California Commissioner of Corporations, each document or certificate representing the

Options or Shares issuable under this Plan shall be endorsed thereon with a legend substantially as follows:

S “IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITtED IN THE COMMISSIONER’S RULES.”


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(c) Additional Legends. Each document or certificate representing the Options or Shares issuable under this Plan shall also contain

the legends as may be required under California law or other applicable state or federal securities laws or by any Stock Purchase Agreement or other agreement the execution of which is a condition to the exercise of an Option under this Plan including a legend substantially as follows:

‘THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION, OR ANY INTEREST THEREIN, ARE SUBJECT TO CERTAIN RESTRICTIONS, INCLUDING A RIGHT OF FIRST REFUSAL OF THE COMPANY, AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”

24. Availability of Plan. A copy of this Plan shall be delivered to the Secretary of the Company and shall be shown by him to any eligible

person making reasonable inquiry concerning it.

25. Compliance with Exchange Act Rule 16b-3. With respect to persons subject to Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3, promulgated pursuant to the Exchange Act, or its successors. To the extent any provision of this Plan or action by the Board or any Committee fails so to comply, it shall be deemed null and void to the extent permitted by law and deemed advisable by the Board or any Committee.

26. Invalid Provisions. In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.

27. Applicable Law. This Plan shall be governed by and construed in accordance with the laws of The State of Nevada.


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As adopted by the Board of Directors on September 1, 2004.


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Signed: /s/Philip Pesin Name: Philip S. Pesin Title: Chairman of the Board

FULL CIRCLE INDUSTRIES INC.

STOCK OPTION GRANT NOTICE

FULL CIRCLE INDUSTRIES INC., (the “Company’), pursuant to its 2004 Stock Option Plan (the “Plan’) hereby grants to the Optionee named below a stock option to purchase the number of shares of the Company’s common stock set forth below. As designated below; this stock option either is or is not intended to qualify for the federal income tax benefits available to an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. This option is subject to all of the terms and conditions as set forth herein and in Attachment I and the Plan which are incorporated herein in their entirety.

TYPE OF OPTION: I I Incentive Stock Option I I Nonstatutory Stock Option

VESTING SCHEDULE

ADDITIONAL TERMS/ACKNOWLEDGMENTS: The undersigned Optionee acknowledges receipt of, and understands and agrees to the terms of the following: this Giant Notice, the Stock Option Agreement and the Plan. Optionee further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between Optionee and the Company regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements pertaining to this particular option.


Optionee/Employee: Employee I.D. #: Grant No.: Date of Grant: Shares Subject to Option: Exercise Price Per Share: $ Expiration Date:

FULL CIRCLE INDUSTRIES INC. OPTIONEE: By: Signature Dated: Date:

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Attachment I: Stock Option Agreement

FULL CIRCLE INDUSTRIES INC.

STOCK OPTION AGREEMENT

Pursuant to the Grant Notice and this Stock Option Agreement, the Company has granted you an option to purchase the number of shares of

the Company’s common stock (“Common Stock”) indicated in the Grant Notice at the exercise pike indicated in the Grant Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in die Plan shall have the same definitions as in the Plan.

The details of this option are as follows:

1. VESTING. Subject to the limitations contained herein, this option will vest as provided in the Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

2. METHOD OF PAYMENT. Payment of the exercise price by cash (or check) is due upon exercise of all or any pail of this option which has become exercisable by you. Notwithstanding the foregoing, this option may be exercised pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board which, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by die Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company. Payment of the exercise price may also be made by a combination of the above methods.

3. EXERCISE FOR MINIMUM NUMBER OF SHARES. The minimum number of shares with respect to which this option may he exercised at any one time is one hundred (100), except (a) as to an installment subject to exercise, as set forth in paragraph 1, which amounts to fewer than one hundred (100) shares, in which case, as to the exercise of that installment, the number of such shares in such installment shall be the minimum number of shares, and (b) with respect to the final exercise of this option, this minimum shall not apply. This option may only be exercised for whole shares.

4. SECURITIES LAW COMPUANCE. Notwithstanding anything to the contrary contained herein, this option may not be exercised unless the shares issuable upon exercise of this option are then registered under the Securities Act or, if such shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act.

5. TERM.

(a) The term of this option commences on die Date of Grant (as specified in the Grant Notice) and expires upon the earliest of:


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(i) the Expiration Date indicated in die Grant Notice; or

(ii) the tenth (10th) anniversary of the Date of Grant.

(b) Notwithstanding die foregoing:

(i) If your Continuous Service terminates due to your Disability, then this option will continue to die extent of vested by

unexercised options for a period of one (1) year after the date such service was terminated, but no later than the Expiration Date.

(ii) If your Continuous Service terminates due to (xl your death, or (y) your Disability and you subsequently die prior to the Expiration Date, (hen this option shall immediately become fully vested and exercisable for all of the option shares as of the date of your death. This option will then expire on the earlier occurring of either the Expiration Date or one (1) year alter die date of your death.

(c) If tins option is designated an incentive stock option, then to obtain the federal income tax advantages associated with an “incentive stock option,” the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of exercise, you must be an employee of the Company or a “parent corporation” or a “subsidiary corporation” (as those terms are defined in Section 424 of the Code), except in the event of your death or your Disability. The Company has provided for extended exercisability of this option under certain circumstances for your benefit, but does not represent or guarantee that this option will necessarily be treated as an “incentive stock option.”

6. EXERCISE.

(a) You may exercise die vested portion of this option during its term by delivering a notice of exercise (in a form designated by die Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as die Company may then require pursuant to the Plan.

(b) By exercising this option you agree that as a condition to any exercise of this option, the Company may require you to enter an arrangement providing for die payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of this option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject at the time of exercise; or (3) die disposition of shares acquired upon such exercise.

(c) If this option is an incentive stock option, then by exercising tins option you agree to notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of this option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of this option.


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(d) If this option is a non-statutory stock option, it may be subject to certain terms or restrictions such that shares issued upon exercise of die

option are nontransferable or subject to a substantial risk of forfeiture (i.e., the stock is not vested). In that event, you may be eligible for an election under Section 83W) of die Internal Revenue Code, which would allow’ you to report compensation income when you receive the stock rather than when it becomes vested. If you make an election pursuant to Section 83W), the value of the stock is determined when you receive it, and you will have noting to report at the time the stock vests. Because failure to file a Section 83(b) election may result in adverse tax consequences, you are advised to consult your personal tax advisor with respect to the advisability of such an election.

AN ELECTION UNDER SECTION 83W) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE OPTIONE

PURCHASES SHARES. THIS TIME PERIOI) CANNOT BE EXTENDED. THE OPTIONEE ACKNOWLEDGES THATTIMELY FILING OF A SECTION 83W) ELEGI’ION IS THE OPTIONEE’S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

7. TRANSFERABILITY. This option is not transferable, except by will or by the laws of descent and distribution or pursuant to a domestic relations order as defined by die Code or Title I of die Employee Retirement Income Securities Act of 1974, as amended (a ‘DRO’), or the rules (hereunder, and is exercisable during your life only by you or any transferee pursuant to a DRO.

8. OPTION NOT A SERVICE CONTRACT. This option is not an employment or service contract and noting in this option shall be deemed to create in any way whatsoever any obligation on your part to continue in the service of die Company or an Affiliate, or of the Company or an Affiliate to continue your service with the Company or the Affiliate. In addition, nothing in this option shall obligate the Company or any Affiliates, their stockholders, Board of Directors, Officers or Employees to continue any relationship as a Director or Consultant for the Company or any Affiliate.

9. NOTICES. Any notices provided for in this option or die Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by die Company to you, five (5) days after deposit in die United States mail, postage prepaid, addressed to you at die last address you provided to the Company.

10. GOVERNING PLAN DOCUMENT. This option is subject to all die provisions of the Plan, the provisions of which are hereby made a pail of tins option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time he promulgated and adopted pursuant to the Plan. In die event of any conflict between the provisions of this option and those of the Plan, die provisions of the Plan shall control.


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SUBSCRIPTION AGREEMENT

Dear Biogold Fuels Corporation:

1. _____________________ hereby subscribes for ____________________ Shares of Common Stock (the “Shares”) of Biogold Fuels Corporation (the “Company”) at a purchase price of $0.50 per Share for a total purchase price of $ ______ (the “Subscription Purchase Price”). The Subscription Purchase Price is deemed paid in cash at time of issuance of the Shares.

2. I understand that the Company reserves the right to reject, in whole or in part, any offer to subscribe, for any reason whatsoever, and that no subscription may be withdrawn once made.

3. I understand that once accepted by the Company, the proceeds will be used by the Company for general working capital, overhead and operating purposes. I further understand that no assurance can be given as to the Company’s ability to access capital as and when required.

4. I represent that: (a) my commitment to all investments is reasonable in relation to my net worth; (b) I have the requisite knowledge or have relied upon the advice of my own counsel, accountants or others, each of whom qualifies as an Investor Representative with regard to all of the considerations involved in making this subscription; (c) I will be acquiring the Shares of the Company for investment and not with a view for resale or distribution of the Shares; (d) I am aware that the right to transfer the Shares is restricted in accordance with state and federal securities laws; (e) I have the financial ability to bear the economic risk of the investment in the Company (including the complete loss of the entire investment), adequate means of providing for my current and anticipated needs and personal contingencies, and no need for liquidity with respect to my investment in the Company; (f) my overall commitment to investments which are not readily marketable is not disproportionate to my net worth and my investment in Shares of the Company will not cause such overall commitment to become excessive; (g) I am an “accredited investor” as defined in Regulation D promulgated under the Securities Act; (h) I acknowledge that the Company will require additional capital and financing and that it does not currently have a binding commitment for the required capital or financing; (i) the per-share purchase price of the shares of Shares was arbitrarily established by the Company without the benefit of independent appraisal and I may experience substantial dilution to my investment; (j) I understand that the Company may offer instruments to strategic investors which may be granted preferences and rights senior and superior to the shares of Shares; (k) I acknowledge that the Company’s shares of Common Stock are not trading over any recognized exchange or at all, and accordingly, the Shares being purchased hereunder are considered by me to be non-tradeable and illiquid and no assurance can be given as to when, if at all, its Shares will be traded; (l) additional capital will be required by the Company to implement its business objectives. The Company may be unable to raise such required capital on favorable or timely terms or at all; (m) if the Company can raise additional capital it will result in the sale of additional common or preferred stock of the Company, and will result in dilution to the interests of the subscriber hereunder.

5. I have relied upon my own independent investigation in connection with this subscription. I have had access to all the following information:

Date: 4/10/2008 19:30:10 User: ksun Vintage Filings Pg: 119 Project: v110188 Form Type: 10KSBClient: v110188_Biogold Fuels Corporation_10KSB Doc Type: EX-10.2 File Name: v110188_ex10-2.htm

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(a) All books and financial records of the Company and its subsidiary;

(b) All material contracts and documents relating to the Company and its subsidiary;

(c) All financial statements of the Company and its subsidiaries; and

(d) An opportunity to question each of the officers, directors, consultants and others affiliated with the Company and its subsidiaries.

6. I do not require a prospectus or full disclosure offering or private placement memorandum concerning the Company or its subsidiaries and I

am relying upon my right of access to information and documents and right to ask questions in connection with the subscription hereunder.

7. By reason of my prior business and financial experience, I have the capacity to protect my own interest in connection with this subscription. The information set forth in this Subscription Agreement is accurate and complete in all respects. Furthermore, I am purchasing the Shares described in this Subscription Agreement with a view not to resale or otherwise distribute same, except in accordance with federal and state securities laws. I expressly represent that I am an “accredited investor” as defined by the rules and regulations under the Securities Act of 1933 and am a sophisticated and suitable investor for a development and early stage company, which is subject to a high degree of risk.

8. In the event that this subscription is accepted, in whole or in part, I request that the Certificates be registered in the name(s) printed below. Delivery will be made to the address printed below:


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Subscriber Name: As it should appear on certificate

Subscriber Address:

ACCEPTANCE OF SUBSCRIPTION Subscriber Signature Biogold Fuels Corporation . Printed Name: By: Title: Dated Dated

EXHIBIT 10.4

LICENSE AGREEMENT

BETWEEN

MSW PATENTS, INC.

AND

FULL CIRCLE INDUSTRIES, INC.


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LICENSE AGREEMENT

This Agreement (“Agreement”) is made as of the 15th day of May, 2006 (“Effective Date”), between MSW Patents, Inc., a company duly

incorporated under the Jaws of the State of Alabama, U.S.A., and having its principal place of business at 4502 Pine Lake Drive, terry, Mississippi (“Licensor”), and Full Circle Industries, Inc., a company duly incorporated under the laws of the State of Nevada, U.S.A., and having its principal place of business at 27368 Via Industria, Suite 113, Temecula, California, and its Affiliates (hereinafter, collectively referred to as “Licensee”)

WHEREAS, Licensor is the owner of U.S. Patent No. 6,397,492 for an apparatus and method for processing municipal solid waste; and WHEREAS, Licensee wishes to license U.S. Patent No. 6,397,492 for the processing of municipal solid waste. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:

1. DEFINITONS - For purposes of this Agreement, the following definitions shall apply:

1.1 Affiliates. The tern “Affiliates” means any corporation, partnership, joint venture or other entity directly controlling, controlled by or

under common control with Licensee; as used herein, the term “control” means possession of the power to direct, or cause the direction of the management and policies of a corporation or other entity whether through the ownership of voting securities, by contract or otherwise.

1.2 License Date. “License Date” shall mean the date on which Licensor grants to Licensee an exclusive License to the Patent, as defined below, in a county pursuant to Section 2.3 or pursuant to Section 3.3. Upon the License Date, such county would thenceforth be included in the Territory, as defined below.

1.3 Patent.“Patent” shall mean U.S. Patent No. 6,397,492 issued June 4,2002 for an apparatus and method for processing municipal solid waste, described in further detail in Exhibit A. together with all applications for patent or 111cc protection on said invention and all patents or like protection that may in the future be granted on said invention in the United States of America and all substitutions for and divisions, continuations, continuations in part, renewals, reissues, extensions and the like on said applications and patents. Patent shall include any confidential information and/or know how relating to the invention of the patent, including, but not limited to, Vessel drawings, as defined below, technical schematics of Vessel operations, and any improvements thereof for which Licenser gains a proprietary interests by any means.

1.4 Sublicensing Revenue. “Sublicensing Revenue” shall mean all cash, sublicensing fees, royalties and all other payments and the cash equivalent thereof paid to Licensee by any sublicensee of Licensee of its rights hereunder.

1.5 Territory. “Territory” shall mean each county, as defined by the state in which the county is located, in the United States of America to which Licensee has the exclusive right to use the Patent pursuant to this Agreement.

1.6 Vessel. “Vessel” shall mean the apparatus used for processing municipal solid waste as identified in the Patent.


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2. GRANT OF EXCLUSIVE LICENSE

2.1 Grant of Exclusive License. Subject to the limitations, terms and conditions of this Agreement, Licenser hereby grants to Licensee during the term of this Agreement an exclusive license to use the Patent in the Territory. During the term of this Agreement, Licensor agrees not to use the Patent in any Territory in any way.

2.2 Vessel(s). The license shall include the right of Licensee to build and operate as many Vessels as Licensee deems necessary for each county in the territory.

2.3 Right of First Refusal. In the event that Licensor receives a bona fide offer from a third party (“Bona Fide Offer”) to license the Patent in any county not already included in the Territory, Licensor shall provide Licensee written notice of the Bona Fide Offer within ten (10) days of receipt of such offer (“Notice of Offer”) and Licensor shall provide Licensee the right to license on the same terms as the Bona Fide Offer (“Right of First Refusal”). The Notice of Offer shall specify the terms of the Bona Fide Offer, including but not limited to, territory, licensing fees, and term. Licensee shall have thirty (30) days from the date Licensee receives the Notice of Offer to exercise the Right of First Refusal to license the Patent on the same terms as the Bona Fide Offer. In the event that Licensee exercises the Right of First Refusal, Licensee shall provide written notice to Licenser stating that it chooses to exercise the Right of First Refusal no later than thirty (30) days from the date Licensee receives the Notice of Offer. In the event that Licensee does not exercise the Right of First Refusal within thirty (30) days from the date Licensee receives the Notice of Offer, Licensor may license the Patent to a third party on the same terms as the Bona Fide Offer within thirty (30) days of the expiry of the Right of First Refusal. If Licenser does not sign an agreement with a third party on the same terms as the Bona Fide Offer within thirty (30) days of the expiry of the Right of First Refusal, then any offer from a third party shall be subject to this Section 2.3.

2.3.1 Licensor agrees not to enter any direct license with any one of the following: (1) World Waste International and all affiliates, (2) Dr. Michael Eley, Don Malley and Die-Products International and all affiliates, unless pursuant to Section 13.1 of this agreement.

2.4 Sublicense. Licensee shall have the right to sublicense the Patent with the written approval of the Licensor, which approval shall not be

unreasonably withheld. 3, NOTICE OF SITE SELECTION

3.1 Licensee shall provide Licensor with written notice of a county which Licensee desires to include in the Territory and the number of Vessels Licensee would license for that county, Licensee shall have the right to provide such notice for any county in the United States not already subject to a license for the Patent.

3.2 Upon receipt of notice from Licensee pursuant to Section 3.1, Licenser shall not enter an agreement to license the patent to a third party

for a period of ninety (90) days. 3.3 Licensee shall have ninety (90) days from the receipt of notice pursuant to Section 3.1 by Licensor to purchase a license for the noticed

county (ies) under the terms of this Agreement. In the event that Licensee does not purchase a license for the noticed county(ies) within ninety (90) days from receipt of the notice pursuant to Section 3.1 by Licenser, Licenser may grant a license for the Patent in the noticed county(ies) to a third party. Any such license to a third party shall not be subject to Section 2.3 if the license with a third party is entered less than one hundred and eighty (180) days after Licensor receives notice provided in Section 3.1. On or after one hundred and eighty (180) days after Licensor receives notice as provided in Section 3.1, any such license shall be subject to Section 2.3.


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4. FEES, ROYALTY, and PAYMENTS

4.1 Base Fee. Licensee shall pay Licensor Twenty Five Thousand Dollars ($25,000) as consideration for entering this Agreement. Such payment shall be due at closing.

4.2 Vessel Fee. Licensee agrees to pay to Licensor a fee of Twenty Five Thousand Dollars ($25,000) for each Vessel built by Licensee pursuant to this Agreement. Such payment shall be paid to Licensor as follows:

(a) Twelve Thousand Five Hundred Dollars ($12,500) shall be paid upon the License Date for such Vessel(s); and

(b) Twelve Thousand Five Hundred Dollars ($12,500) shall be paid upon the later of (i) completion of construction of the Vessel(s) or (ii) eighteen (18) months after the License Date.

4.3 Royalty. Licensee agrees to pay to Licensor a royalty of Twenty Five Cents ($0.25) per ton of municipal solid waste processed using the Vessel(s). Royalties shall be computed no later than thirty (30) days from the last day of each month in which the Vessel(s) is/are operated. Such royalties shall be paid to Licensor no later than forty (40) days from the last day of each month in which the Vessel(s) is/are operated. Such royalties shall be paid on a monthly basis.

4.4 Sublicensing Revenue. In the event that Licensee sublicenses its rights hereunder pursuant to Section 2.4, Licensee shall continue to pay Licensor the royalties that Licenser would be entitled to pursuant to Section 43 if Licensee operated the sublicensed Vessel(s). Such portion of the Sublicensing Revenue shall be computed no later than thirty (30) days from the last day of each month in which the sublicensed Vessel(s) is/are operated. Such share of the Sublicensing Revenue shall be paid to Licensor no later than forty (40) days from the last day of each month in which the sublicensed Vessel(s) is/are operated. Such share of the Sublicensing Revenue shall be paid on a monthly basis.

4.5 Payment. All royalty and any other payments shall be made in United States currency. The symbol $ shall mean United States dollars. All royalty payments shall be made to Licenser by the Licensee at such place as may be directed by Licensor.

4.6 Penalty for Late Payment. In the event that Licensee’s payment is not postmarked within ten (10) days of the date such payment is due pursuant to Section 4.2 and/or 4.3, Licensee shall pay Licensor a penalty of Thirty Five Dollars ($35) for each day the first time that payment is late. The penalty for Late payment shall increase by Five Dollars ($5) each time Licensee’s payment is late thereafter.

4.7 Credit. In the event Licensee purchases the Patent from Licensor, all payments to Licensor pursuant to Sections 4.1 and 4.2 shall be credited to the purchase price of the Patent.


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5. REPORTS/ AUDITS

5.1 Books, Records. Licensee, during the term of this Agreement and for two (2) years thereafter, shall keep at its usual place of business

true and particular accounts and records of the processing of municipal solid waste and of all royalties paid or payable hereunder and shall maintain its records in accordance with generally accepted accounting principles.

5.2 Audit. Licensor and its duly authorized representatives shall have the right, at Licensor’s expense, to audit the books and records maintained by Licensee pursuant to Section 5.1 semi-annually during business hours and upon reasonable notice to Licensee. Such audit shall include the right to inspect and audit the accounts and records of Licensee relating to the processing of municipal solid waste using the Vessel(s) and all other matters, directly or indirectly, relevant to the calculation of the amount of royalty due, and such representatives shall be entitled to take copies of or extracts from any such records. Should the results of the audit discover an underpayment of royalties, Licensee shall pay the amount of underpayment to Licensor within ten (10) days. Should the results of the audit discover an underpayment of royalties of three percent (3%) or more, Licensee shall promptly pay all the costs of such audit to Licensor provided, however, that Licensee’s liability for such costs shall not exceed Five Thousand Dollars ($5,000.00) for any audit.

5.3 Right to Accounting. In the event that there is a dispute as to the royalty amount due pursuant to Section 4.3, Licensee shall provide a written explanation and accounting of the amount due. In the event that the accounting reveals that the amount due is more than the amount paid, then Licensee shall pay Licensor the difference between the amount paid and the amount due within ten (10) days following the determination of the correct amount. In the event that the accounting reveals that the amount due is less than the amount paid, then Licensor shall credit against the following month’s royalty payment at the election of the Licensee.

5.4 Right to Copies. Licensor shall have the right to make reasonable requests for copies of reports and records relating to the calculation of the amount of royalty due and Licensee shall have a reasonable amount of time to comply with such request. 6. NON-DISCLOSURE!/PATENT

6.1 Definition. Licensee acknowledges that all information of any kind, and which has commercial or economic value in the business in

which Licensor is engaged including, but not limited to, all know-how, patterns, designs, sizing, specifications, production methods and techniques, and directions and standards for manufacturing and packaging and marketing information, if any, furnished by Licensor to Licensee during the term of this Agreement is proprietary to Licensor and is a trade secret of a highly confidential and secret nature (“Licenser Confidential Information”). The term Licenser Confidential Information does not include any of the items identified in the preceding sentence which (i) were known to Licensee at the time of their disclosure to Licensee by Licensor, (ii) were or become publicly known or generally available through no wrongful act of Licensee, its agents or employees, (iii) Licensee can reasonably demonstrate was independently developed by Licensee without use of the Patent, or (iv) Licensee shall be compelled to disclose by law or legal process. Licensor shall from time to time give Licensee written notice of any information which Licensor considers to be Licensor Confidential Information.


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6.2 Non-Disclosure, All such Licensor Confidential Information is given and received in strict confidence and is to be used by Licensee

solely for the purpose of carrying out this Agreement. With the exception of communication with a sublicense pursuant to Section 2.4 or any other communication with third parties or employees of Licensee in furtherance of the Licensee’s rights under this Agreement, Licensee shall keep in strict confidence such information and shall not reveal, disclose, sell, or transfer any part of such information, directly or indirectly, to any third party.

6.3 Protection, In the performance of its obligations under this Section 6, Licensee shall at its own cost take all reasonable precautions and steps to protect such Licensor Confidential Information.

6.4 Survival. Licensee’s obligations set forth in the section 6 shall survive and remain in effect after the expatriation of termination of this

agreement. 6.5 Patent Ownership. All right, title, and interest in the Patent shall remain the property of Licensor. 6.6 Maintenance of Patent. Licensor shall have the obligation to maintain the Patent with the United States Patent and Trademark Office.

7, INFRINGEMENT

7.1 Notification. Licensor shall notify Licensee and Licensee shall notify Licensor of any suspected infringement of the Patent, including,

but not limited to, any claims in the Patent or misuse, misappropriation, or theft or of any infringement suits that may be brought against any party to this Agreement within ten (10) days after learning of the existence thereof.

7.2 Enforcement of Patent. Licensor shall have the right, but not the obligation, to enforce the Patent. Licensee shall have the priority right over Licenser to enforce the Patent within the Territory. Li the event that Licensee brings an action to enforce the Patent, Licensor shall not have the right to participate in such action unless such participation is requested by Licensee or Licenser is legally required to participate. Licensee will have the exclusive right to settle any action Within a Territory licensed to Licensee on terms satisfactory to Licensee. Should either party commence an action under this Section 7.2 and thereafter elect to abandon the same, it shall give timely notice to the other party who may, if it so desires, continue prosecution of such action or proceeding to enforce the Patent.

7.3 Licensor Attorneys’ Fees. In the event that Licensor is required to participate in an enforcement action brought by Licensee, Licensee shall reimburse Licensor for any reasonable attorneys’ fees incurred by Licenser pursuant to Section 7.2. In the event that Licensee is required to participate in an enforcement action brought by Licensor, Licenser shall reimburse Licensee for any reasonable attorneys’ fees incurred by Licensee pursuant to Section 7.2. In the event that Licenser or Licensee receives any monetary proceeds from the enforcement of the Patent, whether such proceeds are in the form of a settlement, an arbitration award, or a judgment, such proceeds shall first go to Licenser for reimbursement of reasonable attorneys’ fees. Licensee shall reimburse Licensor for any reasonable attorneys’ fees not covered by any monetary proceeds from the enforcement of the Patent.

7.4 Proceeds of Patent Enforcement. In an enforcement action brought by Licensee, after reimbursement to Licensor of reasonable attorneys’ fees pursuant to Section 7.3, any remaining monetary proceeds from the enforcement of the Patent, whether such proceeds are in the form of a settlement, an arbitration award, or a judgment, shall first go to Licensor for royalties pursuant to Section 4.3 or 4.4 based upon the economic loss in the form of lost tonnage identified in the settlement, arbitration award, or judgment due to the Patent infringement. Any proceeds in excess of the royalties owed to Licensor pursuant to Section 4.3 or 4.4, as described above, shall be the sole property of Licensee. If lost tonnage is not readily determinable in any settlement, then the lost tonnage based upon the three (3) months prior to the infringement shall be used to determine the post infringement loss.


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8. REPRESENTATIONS AND WARRANTIES

8.1 By Licensee. Licensee represents and warrants to Licensor, as follows:

(a) Licensee is a corporation duly organized, validly existing and in good standing under the laws of Nevada;

(b) Licensee possesses all necessary corporate power and authority to enter into and perform its obligations under this Agreement; Licensee has taken all necessary action, corporate or otherwise to authorize the execution, delivery and performance of this Agreement; and

(c) this Agreement is the valid and binding obligation of Licensee in accordance with its terms.

Licensee agrees promptly to inform Licensor of any material changes which affect any such representation and warranty.

8.2 By Licensor. Licenser represents and warrants to Licensee as follows:

(a) Licensor is a corporation duly organized, validly existing and in good standing under the laws of Alabama;

(b) Licensor has all necessary corporate power and authority to enter into and perform its obligations under this Agreement and, Licensor has taken all necessary action, corporate or otherwise, to authorize the execution, delivery, and performance of this Agreement;

(c) this Agreement is the valid and binding obligation of Licensor in accordance with its terms;

(d) Licensor is the sole owner of all right, title and interest in the Patent and has not licensed or assigned any of the Patent for Use

by any third party;

(e) The Patent is free and clear of all liens, mortgages, security interests or other encumbrances and restrictions;

(f) To the best of Licensor’s knowledge, use of the Patent, including use of the Vessels, will not infringe on the intellectual property rights of others;

(g) To the best of Licenser’s knowledge, the Patent is valid and enforceable;

(h) To the best of Licenser’s knowledge, Licensor has not engaged in any conduct, or omitted to perform any necessary act, the

result of which would invalidate the Patent or hinder its enforcement;

(i) To the best of Licensor’s knowledge, there are no claims of infringement and Licensor has not put anyone on notice for infringement of the Patent by any third parties;

(j) To the best of Licensor’s knowledge, there are no known claims, judgments or settlements relating to the Patent to be paid by

the Licensor;


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(k) To the best of Licensor’s knowledge, the Patent has not been, is not currently the subject of, and is not threatened with, any

reexamination, reissue procedure, interference proceeding or similar proceeding; and

(1) Licensor does not make any claims, warranties or representations beyond those stated in the Patent and Licensor will not be involved in the use of the Patent beyond assisting in Licensee’s understanding thereof.

Licensor agrees promptly to inform Licensee of any material changes which affect any such representation and warranty. 9. THIRD PARTY INDEMNIFICATION

9.1 Licensee Indemnification. Licensee agrees to indemnify’, defend and hold harmless Licensor and its officers, directors, shareholders, employees, representatives and agents from arid against any and all actions, claims, damages and liabilities made by or of third parties resulting directly or indirectly from or arising out of or in connection with the exercise by Licensee of its rights under this Agreement, with the exception of any allegation of patent infringement related to Licensee’s use of the Patent, or the full or partial failure by Licensee to comply with the terms of this Agreement, including, without limitation, all reasonable attorneys’ fees, expert witness fees and other fees, costs and expenses incurred in defending such claims. As used in this Section 9, “Licensee” shall include Licensee or any of its agents, representatives, employees, subcontractors or sub-licensees whether or not authorized under this Agreement. Licensee should rely upon its legal counsel to determine this liability.

9.2 Licensor indemnification, Licensor agrees to indemnify, defend and hold harmless Licensee and its officers, directors, shareholders, employees, representatives and agents from and against any and all actions, claims, damages and liabilities by or of third parties resulting directly or indirectly from or arising out of or in connection with Licensee’s (or its agents, representatives, employees, contractors, subcontractors or sub-licensees) right to use or right to enforce the Patent or for any failure by Licensor (or its agents, representatives, employees, subcontractors or sublicensees, whether or not authorized under this Agreement) to comply with the terms of this Agreement, including, without limitation, all reasonable attorneys’ tees, expert witness fees and other fees, costs and expenses incurred in defending such claims.

9.3 Survival. The obligations set forth in this Section 9 shall survive the termination of this Agreement. 10. TERMINATION; EXPIRATION

10.1 Term. Unless otherwise terminated as provided in this Section 10, the term of this Agreement shall be the lifetime of the Patent.

10.2 Termination by Licensee. At any time, Licensee may terminate its license for any county in the Territory upon thirty (30) days’ written notice to Licenser.

10.3 Termination by Licensor.

10.3.1 Licensor may terminate the license to Licensee for any county in the Territory if (1) Licensee fails to build and operate a Vessel in that county within eighteen (18) months of the License Date for that county, or (ii) after a Vessel has been put into commercial operation in a county, License ceases to operate any Vessel in that county for a period of three (3) consecutive months, unless despite the occurrence of 10.3.1 (i) or 10.3.1 (ii), after the time allotted in (i) or (ii) above, Licensee adheres to payments under Section 4.3 for the operation of each vessel at a 150 ton per day processing capacity.


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10.3.2 Licensor may terminate the license to Licensee for a particular county in the Territory if (i) Licensor provided written notice

to Licensee that Licensee is more than thirty (30) days past due in the payment of royalties related to the processing of solid waste in that particular county pursuant to Section 4.3 or Sublicense fee under 4.4 and (ii) Licensee has failed to pay such past due royalties within thirty (30) days of receipt of such notice from Licensor.

10.4 Effect of Early Termination,

10.4.1 In the event of the early termination of a license for a county in the Territory, Licensee shall (i) cease its use of the Patent in that county as of the date of such termination, (ii) shall either return all material of a technical nature to Licensor or transfer such material to another county in the Territory, and (iii) shall either destroy any Vessel in that county or transfer any such Vessel to another county in the Territory.

10.4.2 In the event of early termination of this Agreement, Licensee shall (i) cease all use of the Patent, (ii) return all material of a technical nature to Licensor, and (iii) destroy any Vessels.

10.4.3 In the event of early termination of a license for a county in the Territory or of this Agreement, no license fees shall be refunded and all royalties shall be paid through the last day of operation of each Vessel. 11. SALE OF THE PATENT

11.1 Right of First Refusal, In the event that Licensor receives a bona fide offer from a third party (“Bona Fide Offer”) to purchase the Patent, Licensor shall provide Licensee written notice of the Bonn Fide Offer within ten (10) days of receipt of such offer (“Notice of Offer”) and Licensor shall provide Licensee the right to purchase the Patent on the same terms as the Bona Fide Offer (“Right of First Refusal”). The Notice of Offer shall specify the terms of the Bonn Fide Offer, including but not limited to the purchase price. Licensee shall have thirty (30) days from the date Licensee receives the Notice of Offer to exercise the Right of First Refusal to purchase the Patent on the same terms as the Bona Fide Offer. In the event that Licensee exercises the Right of First Refusal, Licensee shall provide written notice to Licensor stating that it chooses to exercise the Right of First Refusal no later than thirty (30) days from the date Licensee receives the Notice of Offer. In the event that Licensee does not exercise the Right of First Refusal within thirty (30) days from the date Licensee receives the Notice of Offer, Licensor may sell the Patent to a third party on the same terms as the Bonn Fide Offer within thirty (30) days of the expiry of the Right of First Refusal. If’ Licensor does not sign an agreement for the sale of the Patent with a third party on the same terms as the Bona Fide Offer within sixty (60) days of the expiry of the Right of First Refusal, then any offer from a third party shall be subject to this Section 11.1.

11.1.1 Licensor agrees not to sell the Patent to any one of the following: (1) World Waste International and all affiliates, (2) Dr. Michael Eley, Don Mafley and Bio-Products International and alt affiliates.


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11.2 Continuation of License. In the event that Licensor sells the Patent to a third party (“Purchaser”), in connection with the sale the

Purchaser shall execute a written document acknowledging that its purchase of the Patent is subject to Licensee’s exclusive license to use the Patent in the Territory. With the exception of Section 2.3, Purchaser shall assume all rights and obligations under this Agreement. 12. CLOSING

12.1 Date and Method of Closing. The Parties to this agreement shall each execute the agreement and transmit same via facsimile. The Parties shall then countersign said facsimile and return to the other Party via facsimile,

12.2 Licensee shall transmit, via Company check, the following within 3 business days following the effective date stated on the top of page 1 of this Agreement: a.) $25,000 as consideration for entering this Agreement pursuant to section 4.1. b.) $12,500 License fee for Orange County, California pursuant to section 4.2.

12.3 Licensor shall deliver all patent information and/or know how relating to the invention of the patent, including, but not limited to, Vessel drawings, technical schematics etc. are to be transmitted to Licensee in a form to enable Licensee to filly assemble a Vessel under the licensed patent available to Licensor via express mail within 5 business days of Licensor’s receipt of payment reflected in 12.2 above. 13. ADDITIONAL PROVISIONS

13.1 Successors: Assignment. This Agreement shall be binning upon the parties hereto and their respective successors in interest. Licensee may neither assign this Agreement nor any of the respective rights or obligations Licensee hereto may be assigned, except upon the express written consent of the Licensor, which consent shall not be unreasonably withheld.

13.2 Non-Waiver of Breach. The failure of either party to enforce at any time or for any period of time the provision hereof in accordance with their terms will not be construed to be a waiver of such provision or of the right of such party thereafter to enforce each and every such provision.

13.3 Governing Law/Venue. This Agreement shall be construed in accordance with the laws of the United States of America and the State of Mississippi. The parties hereby consent to venue and personal jurisdiction the courts of Madison County, Mississippi.

13.4 Entire Agreement. This Agreement, including the Exhibits hereto, supersedes all prior agreements, oral or written, between the parties hereto relating to the subject matter covered herein and sets forth the entire agreement between the parties as to the subject matter hereof. Neither party shall be bound by any conditions, definitions, warranties, or representations with respect to the subject matter hereof, other than as expressly provided in this Agreement or as duly set forth on or subsequent to the date hereof in writing and signed by a proper and duly authorized representative of the party to be bound.

13.5 Notice, All notices, requests, demands and other communications shall be validly given if delivered in person, faxed, or forwarded by registered or certified mail addressed to the party’s address or facsimile number appearing hereinafter unless such party has notified the other party of a substitute address or facsimile number in writing to:


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Notices delivered in person or sent via facsimile during normal business hours shall be deemed to be received on the same date. Notices forwarded by registered or certified mail shall be deemed to be delivered three (3) days after such notice was mailed.

13.6 Relationship. Licensee shall act in all respects as an independent licensee and shall do business at its own risk and for its own profit. Nothing in this Agreement shall constitute a partnership or agency relationship between Licensee and Licensor or authorize either party to make any representation on behalf of or in any way to bind the other party to any obligation of any kind, express or implied, to any third party, or to incur any liability on behalf of the other party, unless specifically authorized to do so in writing by the other party and in accordance with the conditions specified by the other party.

13.7 Titles. The titles of the Sections and Paragraphs of this Agreement are for convenience only and shall not be considered as being part of this Agreement nor used in interpretation thereof.

13.8 Government Regulations. The Licensee shall at its own expense comply with all laws, ordinances, rules, regulations and other requirements of the government of the Territory or any other country, state, municipality or other governmental authority, bureau, department, or agency thereof having jurisdiction pertaining to or in relation to any matter connected with or arising out of this Agreement.


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To Licensor:

Harold Crawford

MSW Patents, Inc 4502 Pine Lake Drive Terry, Mississippi 39170 Facsimile: (509) 272-7900 With required copy to: Lawrence B. Austin, Sr. Attorney at Law 153 North Maple Street Ridgeland, Mississippi 39157 Facsimile: (601) 853-9244 To Licensee: Kenneth Frisbie Full Circle Industries, Inc. 27368 Via Industria, Suite 113 Temecula, California 92590 Facsimile: (951) 719-1139 With required copy to: Scott Menghini Fitch, Even, Tabin & Flannery 9276 Scranton Road, Suite 250 San Diego, California 92121 Facsimile: (858) 552-0095

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13.9 Severability. If any of the provisions of this Agreement shall be held by a court or other tribunal of competent jurisdiction to be

unenforceable, the other portions of this Agreement shall remain in full force and effect. 13.10 Acknowledgment Licensee acknowledges that it is not entering into this Agreement On the basis of any representations not expressly

contained herein.

13.11 Force Majeure, No liability hereunder shall result to a Party by reason of delay in performance caused by force majeure, that is, circumstances beyond the reasonable control of the Party, including, without limitation, acts of God, fire, flood, war, civil unrest, labor unrest, or shortage of or inability to obtain material as equipment.

13.12 Attorneys’ Fees. In the event of any action at law or in equity to enforce the provisions of this Agreement, the unsuccessful party shall pay to the other all costs and expenses incurred by the prevailing party, including reasonable attorney’s fees.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date and year first written above.


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MSW PATENTS, INC. FULL CIRCLE INDUSTRIES, INC. Signed: /s/ H.L. Crawford Signed: /s/ Ken Frisbie By: Harold L. Crawford By: Ken Frisbie Its: President Its: CEO

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EXHIBIT 10.14 TECHNOLOGY LICENSE AGREEMENT

This Technology License Agreement (the “Agreement”) is made and entered into December15, 2004, between Bio-Products International,

Inc. (“Bio-Products”), a company incorporated under the laws of the State of Alabama (the “Licensor”), and International Waste Processors, Inc. (“IWP”), a company incorporated under the laws of the State of Nevada (the “Licensee”) (the Licensor and Licensee may hereinafter be either individually referred to as the “Party” or collectively referred to as the “Parties”).

PREMISES:

Whereas, Dr. Michael II. Eley (“Eley”), in his continuous capacity as an employee of the University of Alabama in Huntsville (“UAH”), developed certain proprietary intellectual property, patented processes, and patent pending processes for the volume reduction, separation, recovery, and recycling of various components of waste materials, including without limitation, Municipal Solid Waste (“MSW”), which technology has been reduced to U.S. Patent No. 6,306,248 (the “U.S. Patent”) and Patent Cooperation Treaty, International Application No. PCT/US01/50049 (the “PCT”) (collectively, the “UAH Technology”). The UAH Technology constitutes the first of the two parts of the “Technology” (as defined herein). Eley is also a major stockholder, President and CEO of Bio-Products;

Whereas, pursuant to that certain Amended and Restated License Agreement, effective August 18, 2003, which supersedes and replaces the original license agreement date November 13, 1992, and all amendments thereto, between UAH and Bio-Products (the “Amended and Restated UAH License”) (a complete copy of which is attached as Exhibit A), UAH granted an exclusive worldwide license to Bio-Products covering the UAH Technology, including the rights to make, have made, use, lease and sell certain products, and to practice certain processes, and to license some or all of the rights granted to others, such products and processes being more specifically defined in the UAH License;

Whereas, Donald E. Malley (“Malley”) developed certain proprietary intellectual property, equipment designs, and process operating procedures related to the UAFI Technology, including the expertise and know-how for fabrication and continuous operation of a small waste reduction process plant at a commercial sanitary landfill for a period of eighteen months (collectively, the “M & M Technology”). Malley, the developer, and M & M Consulting, Inc. (“M & M”), a company incorporated under the laws of the State of Mississippi and owner of the M & M Technology, have assigned all rights to the M & M Technology to Bio-Products (a complete copy of the Amended and Restated Stock Purchase and Assignment Agreement is attached as Exhibit B). The M & M Technology constitutes the second of the two parts of the “Technology” (as defined herein). M & M is also a minority stockholder in Bio-Products, and Malley is a Vice President of ho-Products;

Whereas, Bio-Products desires to enter into a license agreement with the Licensee to provide the Technology and future improvements for the construction and operation of commercial scale municipal solid waste processing and recycling facilities subject to the terms and conditions set forth herein;


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Whereas, the Licensee either has the financial resources, or has agreed to use their best efforts to secure the financial resources, for the design,

engineering, fabrication and purchase of processing equipment, construction and operation of processing facilities, and marketing and promotion of commercial facilities that are compatible with the Technology;

Whereas, the Licensee desires to enter into a license agreement with Bio-Products to use the Technology for commercial purposes upon the terms and conditions hereinafter set forth;

Now, therefore, in consideration of the premises and the mutual covenants contained herein, the Parties hereto agree as follows:

ARTICLE I - DEFINITIONS

For purposes of the Agreement, the following words and phrases shall have the following meaning:

1.1 “Technology” shall mean the inventions, technology, and proprietary intellectual property and information developed by Bio-Products, Eley, Malley, M & M, and UAFI created or discovered prior to or after the effective date of this Agreement, including, but not limited to, inventions, processes, process operating procedures and discoveries, patents, patent applications, trade secrets, developments, facility designs, equipment designs, works of authorship, formulas, software programs, techniques, information, expertise, know-how, data research, mask works, all intellectual and industrial property rights of any sort, all rights of integrity, disclosure and withdrawal, copyrights, trade names and trademarks, which are related to the recycling, processing, collection, storage, disposal, treatment, utilization or reduction of waste or waste components or the conversion of cellulosic materials to fuels or other materials or other use of cellulosic materials for the production of energy or otherwise. Technology includes without limitation, the UAH Technology, the M & M Technology, United States Patent Number 6,306,248 and Patent Cooperation Treaty International Application Number PCTIUSOI/50049.

1.2 “Third Party” shall mean any person or entity other than Bio-Products, Eley, Malley, M & M, UAH, the Licensee and Sub-Licensees of the Licensee.

1.3 “Operating Day” shall mean a day in which the facility (i) processes waste equal to or in excess of the facility’s daily design capacity; or (ii) processes all of the waste brought to the facility for processing on such day; or (iii) processes as much waste as allowed by any downstream, limitation, such as but not limited to, any limitations on the downstream processing or disposal of the cellulosic product.


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ARTICLE II - GRANT OF LICENSE

2.1 Subject to the terms and conditions of the Agreement, Bio-Products hereby grants a license to the Licensee to utilize the Technology to

construct and operate commercial scale municipal solid waste processing and recycling facilities in the following countries: China, Japan, Korea, France Iraq, Afghanistan, United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, Yemen, Jordan, Egypt, and Israel.

2.2 The term of this license shall extend from the effective date of the this Agreement, for a period of twenty (20) years, unless extended,

terminated or replaced by agreement of the Parties hereto, or unless otherwise extended or terminated, as elsewhere provided in this agreement. This Agreement shall be extended automatically in any of the countries named in Paragraph 2.1 until the expiration date of the last patent issued to Bio-Products and/or UAH covering the Technology in any of the said countries.

2.3 Anything to the contrary contained elsewhere in this Agreement notwithstanding, Bio-Products shall retain all of the exclusive rights granted under the UAI-I License and all of the exclusive rights obtained by assignment from Malley and M & M, including the worldwide exclusive right to license some or all of its rights not granted to the Licensee under this Agreement to Third Parties to utilize the Technology.

ARTICLE III - FEES, ROYALTIES. AND OTHER CONSIDERATION

3.1 Licensee shall pay a one-time licensing fee of one hundred thousand dollars ($100,000 USD) per country upon obtaining a contract to construct a facility in any of the countries in Paragraph 2.1. All amounts of money in this Agreement shall be in United States Dollars (“USD”).

3.2 The Licensee or its Sub-Licensee shall pay to Bio-Products a one-time royalty of ten thousand dollars ($10,000.00 USD) per ton of capacity for each facility to be constructed in the countries named in Paragraph 2.1 until this Agreement or any extension thereof expires or is terminated. The one-time royalty shall be paid in five (5) installments as follows: (i) Twenty percent (20%) within thirty (30) days after the effective date of the sub-license agreement for the facility, (ii) twenty percent (20%) within thirty (30) days after completion of plant design and equipment specifications for the facility, (iii) twenty percent (20%) within thirty (30) days after completion of equipment vendor selection and issuance of equipment purchase orders for the facility, (iv) twenty percent (20%) within thirty (30) days after final equipment shipment from the USA to the facility site, and (v) twenty percent (20%) within thirty (30) days after completion of employee training. All of the above shall be performed either in the USA or a mutually satisfactory foreign location. Design engineering, equipment specifications, equipment vendor selection shall be completed in cooperation with a qualified engineering firm that is acceptable to Bio-Products and that will supervise the on-site construction and equipment installation. Payment of said royalties shall be by wire transfer of funds to a Bio-Products bank account.


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(a) The license granted by Bio-Products to the Licensee under this Agreement shall be exclusive in all of the above named countries.

(b) For each facility to be constructed and operated under this Agreement by the Licensee, a proposal on the economic feasibility of the facility shall be prepared and submitted to Bio-Products for review and comment. Bio-Products shall submit its comments in writing to the Licensee in a timely manner, not to exceed sixty (60) days. If the Licensee, at its discretion, decides to proceed with said facility, then the Licensee shall grant a site-specific sub-license to a USA entity (the “Sub-Licensee”) that shall own and/or operate the facility. Such sub-license agreement shall be subject to the approval of Bio-Products, which approval shall not be unreasonably withheld.

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3.3 As additional consideration and for their experience and know-how regarding the Technology, the Licensee or its Sub-Licensees shall pay

Bio-Products a monthly fee for technical services. Such technical services shall initially be provided by Eley and Malley who are employees of Bio-Products, and who agree to provide whatever technical services are reasonably requested of them by Licensee or its Sub-Licensees. Payments to Bio-Products for the technical services shall be ten thousand dollars ($10,000 USD) per month payable on or before the first (1st) business day of the month following the Licensee’s or its Sub-Licensees’ initial down payment for the process vessels for construction of the licensee’s plant and continuing each month thereafter until the facility has been in operation for thirty (30) Operating Days, as defined in Paragraph 1 .3 (the “Operational Date”). During any above period Bio-Products shall provide whatever services are reasonably requested of it by Licensee or its Sub-Licensees. Bio-Products and Licensee agree that all phases of the design and construction of a facility in the countries named in Paragraph 2.1, including employee training shall occur in the United States or a mutually agreeable foreign location.

If at any time Bio-Products fails to undertake technical services requested, then Licensee or its Sub-Licensees may cease all payments as set forth in this Paragraph 3.3, until such time as the failure to undertake the technical services request is remedied.

3.4 All facilities to be constructed and operated under this Agreement shall be connected to Bio-Products via the Internet and video

communications for monitoring the operation of key pieces of equipment and videoconferences with facility management and maintenance personnel. For technical services to be provided by Bio-Products during periods not included in Paragraph 3.3, Licensee or its Sub-Licensees shall pay five hundred dollars ($500 USD) per day, based on eight (8) hours per day, per person payable in ten (10) days after receipt of an invoice from Bio-Products. Bio-Products shall invoice Licensee or its Sub-Licensees for such technical services no more than once each month. The daily rate for technical services provided by Bio-Products of five hundred dollars ($500 USD) shall be adjusted January 1 of each year based on the United States Department of Labor’s Bureau of Labor Statistics’ Consumer Price Index, using the date of this Agreement for determining the base for computing the adjustment. For example, assuming the base for the date of this Agreement is 100 and the index figure on the date for adjustment is 105, the adjustment would be 105/100=105%. The existing daily rate of five hundred dollars ($500 USD) would then be increased by five percent (5%) or twenty-five dollars ($25 USD) to five hundred twenty-five dollars ($525 USD).


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3.5 Additionally, with respect to the technical services provided by Bio-Products, the Licensee or its Sub-Licensees shall either provide

pre-paid expense accounts or reimburse Bio-Products and/or its employees for the reasonable transportation, lodging, food, and other expenses incurred by Bio-Products and/or its employees in the performance of such technical services for the Licensee or its Sub--Licensees. In either case, itemized expense reports and receipts shall be submitted to the Licensee or its Sub-Licensees by Bio-Products and/or its employees within ten (10) business days of completion of travel or a specific project in which expenses arc incurred. The Licensee shall establish a travel expense policy and procedure, which policy and procedure its Sub-Licensees and Bio-Products and/or its employees shall adhere to unless the Parties agree, in writing, otherwise. Any reimbursement for expenses shall be paid by the Licensee or its Sub-Licensees within ten (10) business day of receipt of such expense reports submitted by Bio-Products and/or its employees.

3.6 For all facilities to be sub-licensed under this Agreement, the Licensee agrees that the facility design, equipment designs and specifications, on-site engineering firm, and all facility management and maintenance personnel must be approved by Bio-Products, which approval shall not be unreasonably withheld.

3.7 Due to the proprietary nature of the process vessel design, the Licensee agrees that Bio-Products shall maintain the exclusive right of vessel manufacture, and the Licensee and its Sub-licensees shall purchase all required vessels exclusively from Bio-Products. The purchase price shall be cost plus fifteen percent (15%), not including shipping costs or taxes. All other equipment required for construction and operation of waste processing and recycling facilities utilizing the Technology may be purchased from other vendors with mutual agreement between the Licensee, its Sub-Licensees, Bio-Products, and the on-site engineering firm. All vessels to be constructed under this Agreement are to be built to Bio-Products’specifications by or under the supervision of Mississippi Tank Company (“MTC”) and shipped to the requested locations. Shipping costs and applicable taxes shall be itemized and included in the cost of vessels and shall be invoiced to and paid by the Licensee or its Sub-Licensees. Bio-Products shall from time to time seek the qualifications of and obtain cost quotations from alternative vessel manufacturers to manufacture future process vessels as needed such that the same may be provided to Licensee or its Sub-Licensees having equal or higher quality than that established by Bio-Products from MTC and may be transported to the required facility at a cost equal to or less than that established by Bio-Products from MTC, including the cost of shipping and taxes. If future vessels arc purchased at a cost, excluding shipping costs and taxes, below the most recent purchase price, Licensee and its Sub-Licensees agrees to pay Bio-Products an amount equal to twenty-five percent (25%) of the cost savings.

3.8 The Licensee shall maintain all such books and records as are necessary to accurately determine all amounts due and payable to Bio-Products, Eley, Malley, or its other employees under Article III of this Agreement, which books and records the Licensee and/or its Sub-Licensees shall make reasonably available, upon the submission of a written request from Bio-Products for inspection by Bio-Products and/or its designated representative at a time mutually convenient to Bio-Products and the Licensee. Bio-Products agrees to treat all such information respecting Licensee’s books and records as confidential.


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3.9 All payments shall be paid by wire transfer of funds to a bank account to be designated by Bio-Products.

ARTICLE IV - INVENTIONS AND DISCOVERIES

4.1 All rights, title, and interest in and to the Technology and all patent applications and patents thereon or relating thereto as presently

exist, both foreign and domestic, shall remain the sole and exclusive property of Bio-Products and/or UAH. In addition, patents and patent applications, both foreign and domestic, with respect to the existing Technology shall be applied for and prosecuted, and if received, shall issue solely in Bio-Products’ or UAH’s name.

4.2 All rights, title, and interest in and to all future inventions, processes, enhancements, improvements and other discoveries made by Bio-Products, or any person acting for and under the direction of Bio-Products or the Licensee, or any other employee or agent of Bio-Products, or the Licensee, relating to the Technology shall be owned by Bio-Products and/or UAH. All patent applications and patents thereon, foreign and domestic, whether made by any of the Parties or UAH, or jointly by the Parties and UAH or jointly by at least one employee of each Party, shall be owned exclusively by Bio-Products and/or UAH. Bio-Products shall provide the Licensee with detailed information concerning all such related, future inventions, processes, enhancements, improvements and other discoveries upon request. To the extent required to accomplish the foregoing, the Licensee shall execute any and all assignments of patents or other documents to Bio-Products and/or UAH, if required for any such patents to issue in Bio-Products’ or UAH’s name. For future patents to be applied for and prosecuted in any of the countries named in Paragraph 2.1, Licensee shall request such action and agree to reimburse Bio-Products for the costs of such application and prosecution, and if granted also reimburse Bio-Products for the issuance and maintenance fees. Bio-Products hereby grants to the Licensee an exclusive license in the countries named in Paragraph 2.1, subject to the same terms and conditions set forth in this Agreement, to utilize all such future inventions, processes, enhancements, improvements and other discoveries at no additional royalty or cost, except that the term of this Agreement shall be extended by agreement of the Parties or automatically to the expiration date of any subsequently issued patent in any of the countries named in Paragraph 2.1.

4.3 The Technology of Bio-Products and/or UAU shall be maintained by the Licensee free and clear of all liens and encumbrances or rights of any Third Party. Neither Bio-Products nor Licensee shall sub-license, encumber, transfer or assign the Technology of Bio-Products and/or UAH without the written consent of the other party, except as provided in this Agreement.

4.4 The provisions of this Article shall apply to both foreign and domestic inventions, processes, enhancements, improvements and other discoveries relating to the Technology and to all patent applications and patents related thereto.

4.5 The Parties shall cooperate in good faith to protect any such invention, process, enhancement, improvement or other discovery, and to make all necessary applications, assignments, as provided herein, and filings, including patents, industrial designs, copyright registrations, trademark registrations and other legal protections, necessary or helpful to protect their interests therein.


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ARTICLE V - REPRESENTATIONS AND WARANTIES

OF BIO-PRODUCTS

Bio-Products hereby represent and warrants, as of the date hereof, as follows:

5.1 Bio-Products is a corporation, duly organized, validly existing and in good standing under the laws of Alabama. Bio-Products has all requisite power and authority, corporate and otherwise, to execute, deliver, observe, and perform its obligations under, this Agreement. The execution, delivery and performance by ho-Products of this Agreement have been duly authorized by all necessary corporate action and does not and will not violate Bio-Products’ Articles of Incorporation or Bylaws or any provision of any agreement, law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award presently in effect to which Bio-Products is a party or is subject.

5.2 Bio-Products possesses all such franchises, licenses, patents, or other rights necessary to enter into, and satisfy its obligations under, this Agreement, without (to the best of Bio-Products knowledge) any conflict with, or infringement of, the franchises, licenses, patents or other rights of Third Parties.

5.3 Bio-Products has the exclusive rights to grant some or all of its rights or licenses to Third Parties to utilize the Technology not granted to the Licensee under this Agreement in various geographical locations worldwide.

5.4 There is no action, suit, proceeding or claim pending or, to the knowledge of Bio-Products, threatened against Bio-Products in any way relating to the Technology. There is no action, suit, proceeding or claim pending or, to the knowledge of Bio-Products, threatened against Bio-Products’ properties, assets or business which might have a materially adverse effect on Bio-Products’ rights or ability to perform this Agreement in accordance with its terms. No investigation by any governmental agency is pending or threatened against Bio-Products or the properties, business, or goodwill of Bio-Products, which has or might have a materially adverse effect on Bio-Products’ rights or ability to perform this Agreement in accordance with its terms. There is no outstanding order, writ, injunction, or decree of any court, government or governmental agency against Bio-Products or its assets, business or goodwill. Bio-Products is not in violation of any law or governmental regulation applicable to it, to the Technology, or to its properties or business, including but not limited to any applicable safety, environmental control, or similar law or regulation.

5.5 There is no claim or demand of any Third Party pertaining to, or any proceedings, which are pending or, to the knowledge of Bio-Products, threatened which challenge the rights of Bio-Products in respect of any of the Technology. No technology owned, licensed or used by Bio-Products is subject to any outstanding order, decree, judgment, or stipulation by or with any court, arbitrator or administrative agency, or, to the best of Bio-Products’ knowledge, infringes upon the rights of Third Parties.


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5.6 Bio-Products reserves the right to, but as of the effective date of this Agreement has not, put any Third Party on notice of, and is not a

party to any suit alleging, any infringement or alleged infringement of any of the Technology. Bio-Products is aware that there are currently bases for putting certain Third Parties on notice and/or filing claims, action, or litigation alleging infringement of the Technology.

ARTICLE VI- INDEMNITY AND INSURANCE

ARTICLE VII- PATENT INFRINGEMENT


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6.1 (a)

The Licensee and its Sub-Licensees shall indemnify defend and hold Bio-Products, M&M, and UAH and their respective directors, trustees, officers and employees harmless from and against any and all claims and expenses, including reasonable attorneys’ fees and other legal expenses, arising our of the death or injury of any person or persons, any damage to the property, or any other claim, proceeding, demand, expense, or liability of any kind whatsoever resulting from, or attributable to utilization of the Technology in any of the countries named in Paragraph 2.1 (see Paragraph 10.3 below and Exhibit A).

(b) At least ten (10) days prior to commencement of any activities on the site of each facility of the Licensee or its Sub-Licensees to be constructed and utilize the Technology pursuant to this Agreement, the Licensee or its Sub-licensee shall provide to Bio-Products copies of certificates evidencing the purchase of policies of insurance against the liabilities described in Paragraph 6.1 (a), naming UAH and all of the Parties hereto as additional insured, in amounts not less than one million dollars ($1,000,000 USD) per claim.

7.1 (a) Bio-Products shall notify the Licensee, and the Licensee shall notify Bio-Products, of any infringement suits that may be brought against any Party to this Agreement within three days after learning of the existence thereof. Bio-Products and/or UAFI shall defend at their own expense all infringement suits relating to the existing Technology, and any future discoveries, inventions, improvements, processes and enhancements described in Paragraphs 4.1 and 4.2 of the Agreement. In connection with the defense by Bio-Products and/or UAH of any Third Party claim, the Licensee shall take reasonable actions as are necessary or desirable to assist Bio-Products and/or UAH in any such action. If the Licensee is called upon to take action in a way, which requires it to makeavailable its own personnel or to retain counsel and/or experts, Bio-Products shall reimburse the Licensee for the direct costs of the Licensee’s personnel involved and for the fees and disbursements incurred on account of the Licensee’s counsel and experts. Such reimbursement of the Licensee shall be by deduction from amounts to be paid to Bio-Products by the Licensee for use of the Technology under this Agreement.

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7.2 Bio-Products shall have the sole right (but not the obligation) to take enforcement action against or settle infringement activity arising

under any of the patents covering the Technology. If Bio-Products is unable to take enforcement action or settle infringement activity for financial reasons, Bio-Products may request Licensee to provide financing to jointly with Bio-Products take such action. Licensee shall, at its sole discretion, determine whether to provide the financial resources for any such action. The Licensee shall take all reasonable actions as are necessary to assist Bio-Products in any such action. If the Licensee is called upon to take action in a way, which shall require it to make available its own personnel or to retain counsel and/or experts, Bio-Products shall reimburse the Licensee for the direct cost of the Licensee’s personnel involved and for the fees and disbursements incurred on account of the Licensee’s counsel and experts. Such reimbursement of the Licensee shall be by deduction from amounts to be paid to Bio-Products by the Licensee for use of the Technology under this Agreement.

7.3 In connection with the defense by Bio-Products of any Third Party claims not addressed in Paragraphs 7.1 or 7.2, the Licensee shall participate and cooperate, as Bio-Products shall, from time to time, reasonably request. If the Licensee is called upon to take action in a way which shall require it to make available its own personnel or to retain counsel and/or experts, the Licensee shall be entitled to a deduction from any amounts due Bio-Products under this Agreement. If there are no such amounts due Bio-Products under this Agreement, then Bio-Products agrees to pay Licensee all personnel, counsel, expert and courts costs thirty days after notification of such expenses by the Licensee in connection with Bio-Products’defense of such suits.

ARTICLE VIII - FABRICATION AND CONSTRUCTION

8.1 The Licensee and its Sub-Licensees shall use their best efforts to assure that all construction and any fabrication that takes place in any of the countries named in Paragraph 2.1 meets or exceeds all safety standards that would be required in the USA and in the countries wherein the Technology shall be utilized.

8.2 Bio-Products will use its best efforts to assure that all engineering designs, fabricated equipment, processes, formulas, recipes, and plans to be provided to the Licensee and its Sub-Licensees meet or exceed all applicable and material safety standards of the USA and any of the countries wherein the Technology shall be utilized.

8.3 The Licensee and its Sub-Licensees shall use their best efforts to obtain, or cause to be obtained, all material local, regional, and national permits necessary for the construction and operation of any facility in any of the countries that will utilize the Technology.


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(b) The Licensee shall at its own expense defend all infringement suits relating to any variations, modifications and alterations of the Technology that were made by the Licensee without the written acknowledgement and consent of Bio-Products to make any such variations, modifications, and alterations of the Technology. The Licensee shall not be entitled to any deduction from amounts due Bio-Products on account of such expenses.

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ARTICLE IX - CONFIDENTIALITY

9.1 The Parties hereto each possess confidential information of both a technical and a non--technical nature. It is understood that it has been

and may be necessary for one to disclose same to the other, and the Parties agree such disclosures have been and will be made under and subject to the Confidentiality, Non-Disclosure, and Non-Use Agreement previously executed by the Parties (attached hereto as Exhibit C)

ARTICLE X - AGREEMENT BETWEEN BIO-PRODUCTS AND UAH

10.1 Bio-Products shall comply with all of the terms and conditions of, and perform all of its obligations under, the UAH License. Bio-Products shall not agree to any amendment or modification of the UAH License that would materially affect the terms and conditions of this Agreement without the written consent of Licensee.

10.2 If at any time Bio-Products defaults in its duties in connection with, or by its conduct attempts to or actually terminates the UAII License which default and/or termination affects or terminates the ability of Bio-Products to grant the license contained in this Agreement, then the Licensee will be automatically entitled to and may at its sole discretion enter into contractual agreements with and pay directly to UAH the amounts necessary to obtain or maintain the UAH License. If Licensee does not enter into contractual agreements with UAH, but rather cures any financial default of Bio-Products only, then such sums paid to UAH on behalf of Bio-Products shall be deducted from any royalties owed to Bio-Products under this Agreement. If no such royalties are owed to Bio-Products under this Agreement then such sums will be treated as an interest free loan to Bio-Products.

10.3 Any provision of this Agreement to the contrary notwithstanding, this Agreement shall be construed and interpreted so that the terms and conditions hereof shall not be inconsistent with the terms and conditions of the UAH License, attached hereto as Exhibit A.

ARTICLE XI- PUBLICITY OF LICENSE

11.1 Upon the request of the Licensee, Bio-Products shall cooperate and provide assistance in the development of public statements, advertising, sales literature or promotional materials to describe or promote the Technology.

ARTICLE XII - VISITS TO PREMISES

12.1 The Licensee shall, from time to time, permit Bio-Products to bring visitors to tour any facility utilizing the Technology, provided, that Bio-Products shall notify the Licensee at least seventy--two (72) hours in advance of any proposed visit, that such visits shall be limited to reasonable times and intervals, and contingent upon each visitor signing an appropriate Confidentiality, Non-Disclosure and Non-Use Agreement, and such visitors shall also be subject to all relevant safety and other regulations that apply to any other visitors to the facility. No persons other than those designated by Bio-Products shall have the right to visit any facility utilizing the Technology without the Licensee’s express written consent.


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ARTICLE XIII - EVENTS OF DEFAULT AND REMEDIES

13.1 The Licensee shall be in breach of this Agreement in the event of:

13.2 Bio-Products shall be in default of this Agreement in the event of:


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(a)The Licensee’s failure to make payment hereunder on or before the date on which such payment becomes due and payable and the continuation of such failure unremedied for thirty (30) days after written notice thereof has been given to the Licensee by Bio-Products;

(b)The Licensee’s failure to observe or perform any covenant, condition or agreement contained in this Agreement and the continuationof such failure unremedied for thirty (30) days after written notice thereof has been given to the Licensee by Bio-Products, unless such breach can not be remedied within such thirty (30) days for reasons beyond the Licensee’s control, in which case the Licensee shall have a reasonable time within which to remedy such breach; or

(c)Any warranty or representation made herein by the Licensee and contained in this Agreement, shall prove to have been false, misleading or incorrect in any material respect as of the date made, or shall have failed to state a fact necessary in order to make the statements made not misleading.

(d)No termination of this Agreement shall relieve the Licensee of the obligation to pay Bio-Products all royalties, fees, and otherpayments accrued at the time of the termination, and to continue to pay all royalties, fees, and other payments from the continued operation of existing facilities.

(a)Bio-Products’ failure to observe or perform any covenant, condition or agreement contained in this Agreement or in the UAH License and the continuation of such failure unremedied for thirty (30) days after written notice thereof shall have been given to Bio-Products by the Licensee;

(b)Any warranty or representation made herein by or on behalf of Bio-Products, contained in this Agreement or in the UAH License, shall prove to have been false, misleading or incorrect in any material respect as of the date made, or shall have failed to state a fact necessary in order to make the statements made not misleading; or

(c)If at any time Bio-Products defaults in its duties in connection with, or by its conduct attempts to or actually terminates the UAH License which default and/or termination affects or terminates the ability of Bio-Products to grant the license contained in this Agreement, or affects or terminates the Licensee’s ability to continue operation of existing plants or build new plants.

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13.3 The Licensee shall have the following remedies for breach or default of this Agreement or the UAH License by Bio-Products:

13.4 Upon the Licensee’s breach of this Agreement and its failure to cure said breach as provided above in 13.1, Bio-Products may, at its

option, (i) terminate this Agreement, at which time Licensee shall cease utilizing the Technology and such termination shall relieve Licensee of its obligations to pay Bio-Products any further royalties or fees other than those fees and royalties already accrued through the date of termination and all sub-licenses granted by the Licensee shall be assigned to Bio-Products; or (ii) Bio-Products may seek to recover such damages to which it may be entitled by applicable law, including but not limited to, equitable and injunctive relief.


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(a)Upon Bio-Products’ breach or termination of the UAH License or this Agreement, such that the breach or termination has affected the ability of Licensee to continue operation of existing plants and preclusion of building new plants; the Licensee may at its option terminate this Agreement and contract directly with UAFI as provided in this Agreement. The Licensee and any sub-licensee shall utilize the Technology, free of any royalties, fees, and other amounts accrued through the date of such default or breach and thereafter.

(b)In addition to any other right or remedy available to the Licensee under this Agreement or in law or equity, upon Bio-Products’breach or default of this Agreement or the UAH License, the Licensee shall be entitled to withhold and/or offset any and all royalties or other fees due to Bio-Products under this Agreement.

(c)Notwithstanding anything to the contrary in this Agreement, the Licensee may terminate this Agreement at any time upon six (6) months prior written notice to Bio-Products, at which time the Licensee will cease utilizing the Technology, and pay to Bio-Products any royalties, fees and other amounts accrued though the date of such termination. Immediately upon termination of this Agreement all rights, privileges and licenses granted to the Licensee hereunder shall revert to Bio-Products, including all sub-licenses of facilities granted by the Licensee.

13.5(a)

Any claim or controversy arising out of or relating to this Agreement, or the breach thereof, including without limitation the right of any Party hereto to terminate this Agreement, shall be settled by binding arbitration administered by the American Arbitration Association in accordance with its then current Commercial Arbitration Rules, and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof The arbitration shall be before one neutral arbitrator to be selected in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association. The parties shall have all rights to pre-arbitration discovery pursuant to the Federal Code of Civil Procedure.

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13.6 In the event of the commencement of a voluntary case under the Bankruptcy Code by the Licensee, or Licensee’s acquiescence in any

involuntary petition under the Bankruptcy Code which voluntary or involuntary case remains undismissed for a period of ninety (90) days or more, the right and license conferred under this Agreement shall automatically become and shall thereafter be null and void. The commencement of a voluntary case under the Bankruptcy Code by Bio-Products, or Bio-Products’ acquiescence in an involuntary petition under the Bankruptcy Code, which voluntary or involuntary case remains undismissed for a period of ninety (90) days or more, shall be treated as a material breach of the Agreement.

ARTICLE XIV - GENERAL PROVISIONS

14.1 The titles of the various articles and sections of this Agreement are solely for convenience of reference and are not part of this Agreement for purposes of interpreting the provision hereof.

14.2 The Licensee may assign all of its rights and obligations under, and all of its interest in, this Agreement, including without limitation the license granted hereby, either (i) in a transaction accompanied by the sale or other transfer of the Licensee’s entire business, its stock, or substantially all of its assets, or (ii) to any other entity owned by the same shareholders of Licensee and this Agreement shall be binding upon, and inure to the benefit of, any such successor or assign of the Licensee, provided that Bio-Products consents in writing, such assignment shall not be unreasonably conditioned, withheld, or delayed.

14.3 Nothing in this Agreement shall be deemed or construed to constitute or to create a partnership, joint venture or agency between the Parties. Except as may be otherwise provided herein, neither Party shall have any authority to bind the other Party in any respect.

14.4 If any provision of this Agreement is or becomes unenforceable under any law of mandatory application, it is the intent of the Parties hereto that such provision will be deemed severed and omitted herefrom, the remaining portions hereof to remain in full force and effect as written.


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(b)Neither of the Parties nor the arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of the Parties except to counsel, accountants, and other need to know professionals.

(c)All fees and expenses of the arbitration shall be born by the Parties equally. However, each Party shall bear the expense of its own counsel, experts, witnesses, and preparation of proofs.

(d)In the event that a claim or controversy over the right of any Party to terminate this Agreement shall be submitted for arbitration, this Agreement shall continue in full force and effect, and the termination shall be of no effect, until the arbitrator renders a final decision.

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14.5 The waiver by any Party of any failure on the part of any other Party to perform any of its obligations under this Agreement shall not

be construed as a waiver of any failure or continuing failure or failures, whether similar or dissimilar thereto. 14.6 This Agreement, including the exhibits hereto, constitutes the entire Agreement between the Parties with respect to the subject matter

hereof and supersedes all prior and contemporaneous agreements between the Parties, whether oral or written, related to the subject matter hereof This Agreement may be amended or modified only by a written instrument executed by the authorized representatives of the Parties hereto.

14.7 This Agreement may be executed in one or more counterparts, each of which shall be deemed to be a duplicate original, but all of which, taken together, constitute a single document. This Agreement may be executed by each Party on separate copies, which copies, when combined so as to include the signatures of all Parties, shall constitute a single counterpart of this Agreement.

14.8 This Agreement shall be governed by and construed in accordance with the laws of the State of Alabama.

14.9 Each Party to this Agreement shall execute all instruments and documents and take all actions as may be reasonably required to effectuate this Agreement.

14.10 For purposes of venue and jurisdiction, this Agreement shall be deemed made and to be performed in the City of Huntsville, Alabama.

14.11 This Agreement and all exhibits contain the entire agreement between the Parties to this Agreement with respect to the subject matter of this Agreement, is intended as a final expression of such Parties’ agreement with respect to such terms as are included in this Agreement, is intended as a complete and exclusive statement of the terms of such agreement, and supersedes all negotiations, stipulations, understanding, agreements, representations and warranties, if any, with respect to such subject matter, which precede or accompany the execution of this Agreement.

14.12 Whenever the context so requires in this Agreement, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders.

14.13 Subject to any restriction on transferability contained in this Agreement, this Agreement shall be binding upon and shall inure to the benefit of the successors-in-interest and permitted assigns of each Party to this Agreement. Nothing in this Paragraph shall create any rights enforceable by any Third Party that is not a Party to this Agreement, except for the rights of the successors-in-interest and permitted assigns of each Party to this Agreement, unless such rights are expressly granted in this Agreement to other specifically identified Third Parties.


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14.14 Except as otherwise provided in this Agreement, in the event any litigation, arbitration, mediation, or other proceeding (“Proceeding”)

in initiated by any Party against any other Party to enforce, interpret or otherwise obtain judicial or quasi-judicial relief in connection with this Agreement, the prevailing Party in such Proceeding shall be entitled to recover from the unsuccessful Party all costs, expenses, and reasonable attorneys’ fees relating to or arising out of (a) such Proceeding (whether or not such Proceeding proceeds to judgment), and (b) any post-judgment or post-award proceeding including without limitation one to enforce any judgment or award resulting from any such Proceeding. Any such judgment or award shall contain a specific provision for the recovery of all such subsequently incurred costs, expenses, and actual attorneys’ fees.

14.15 Any notice or other communication pursuant to this Agreement shall be sufficiently made or given five days after the date sent, postage pre-paid, by certified mail, return receipt requested, if sent to the following addresses or to such other address as the Party may from time to time designate other Parties in writing: In the case of Bio-Products International, Inc.:

Dr. Michael H. Eley, President & CEO BlO-PRODUCTS INTERNATIONAL, INC. 3317 Clifford Road, NW Huntsville, Alabama 35810 USA

e1eym~email.uah.edu (e-mail) In the case of International Waste Processors, Inc.:

Philip S. Pesin, President INTERNATIONAL WASTE PROCESSORS, INC. 27368 Via Industria, Suite 113 Temecula, California 92590 USA

[email protected] (e-mail) Each Party shall make a reasonable, good faith effort to ensure that it will accept or receive notices to it that are given in accordance with this paragraph. A Party may change its address for purposes of this paragraph by giving the other Parties written notice of a new address in the manner set forth above.

14.16 In the event either Party hereto shall be rendered wholly or partly unable to perform its obligations under this Agreement by reason of causes beyond its control, including but not limited to acts of Nature, acts of terrorism, acts, omissions, or regulation of any government or agency thereof, judicial action, labor disputes, or transportation failure, except as specified herein, the performance of the obligations of such Party insofar as it is affected by such conditions shall be suspended for the duration of such condition, provided the Party affected advises the other Party of the basis of its inability within ten (10) days of the beginning of such known inability. After the cessation of the condition causing such inability, the Party suffering such inability shall have a period of thirty (30) days to restore its operation(s) and restore its obligations to the other Party.


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256-852-3139 (phone) 256-436-6992 (cellular) 256-824-6305 (fax)

951-719-1104 (phone) 951-551-7279 (cellular) 951-719-1139 (fax)

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14.17 No representations have been made regarding taxes, it being understood by each of the Parties that each such Party accepts full

responsibility for calculation of and payment of his or its taxes, levies, duties or other charges incurred or imposed as a consequence of this Agreement and the transactions described herein.

14.18 This Agreement shall become effective when it has been executed by all of the Parties to this Agreement.

IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to duly execute and deliver this Agreement effective as of the date written above. BIO-PRODUCTS INTERNATIONAL, INC.

INTERNATIONAL WASTE PROCESSORS, INC.


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By: /s/ Michael H. Eley Dr. Michael H. Eley, President & CEO

By: /s/ Philip Pesin Philip S. Pesin, President

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EXHIBIT 21.1

List of BioGold Fuels Subsidiaries BioGold Operations, Inc. (Nevada) Full Circle Industries, Inc. (Nevada) FCWS, LLC (Nevada)


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EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND RULE 13A-14(A) OR 15D-14(A) UNDER THE

SECURITIES EXCHANGE ACT OF 1934

I, Steve Racoosin, certify that: 1. I have reviewed this Annual Report on Form 10-KSB of BioGold Fuels Corporation for the year ended December 31, 2007; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to

make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the year covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the year presented in this report; 4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,

to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the year in which this report is being prepared;

b. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the year covered by this report based on such evaluation; and c. Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small

business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting;

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s

internal control over financial reporting.


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Date: April 9, 2008 /s/ Steve Racoosin Steve Racoosin Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND RULE 13A-14(A) OR 15D-14(A) UNDER THE

SECURITIES EXCHANGE ACT OF 1934

I, Chris Barsness, certify that: 1. I have reviewed this Annual Report on Form 10-KSB of BioGold Fuels Corporation for the year ended December 31, 2007; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to

make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the year covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the year presented in this report; 4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the year in which this report is being prepared;

b. Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions

about the effectiveness of the disclosure controls and procedures, as of the end of the year covered by this report based on such evaluation; and c. Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small

business issuer’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting;

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s

internal control over financial reporting.


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Date: April 8, 2008 /s/ Chris Barsness Chris Barsness Chief Financial Officer

EXHIBIT 32.1

CERTIFICATE OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Principal Executive Officer of BioGold Fuels Corporation (the “Company”), hereby certify that, to the best of my knowledge, the Annual Report on Form 10-KSB of the Company for the year ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


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/s/ Steve Racoosin Steve Racoosin Chief Executive Officer April 8, 2008

EXHIBIT 32.2

CERTIFICATE OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Solely for the purposes of complying with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, the undersigned Chief Financial Officer of BioGold Fuels Corporation (the “Company”), hereby certify that, to the best of my knowledge, the Annual Report on Form 10-KSB of the Company for the year ended December 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


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/s/ Chris Barsness Chris Barsness Chief Financial Officer April 8, 2008

This fax cover sheet is NOT part of the official filing and is meant as a courtesy only. Please disregard this page if you plan to submit changes via email. Email is the preferred method for submitting changes.

Fax Cover SheetTo: Radmila Chernickina From:

Fax: 646-349-9655 Phone:

Phone: (212) 201-7015 Pages:

Project: v110188 Form Type: 10KSB

Client: Biogold Fuels Corporation

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