<html>
  <head>
    <title>
</title>
</head>
  <body bgcolor="#ffffff">
    <div>
      <hr style="COLOR: black" align="left" noshade size="2" width="100%">
    </div>
    <div>
      <hr style="COLOR: black" align="left" noshade size="2" width="100%">
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WASHINGTON,
      DC 20549</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT PURSUANT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>TO
      SECTION&#160;13 OR 15(D) OF THE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      EXCHANGE ACT OF 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of
      report (Date of earliest event reported) </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
      29, 2006</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      FUEL &amp; ENERGY CORPORATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      Name of Registrant as Specified in Its Charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td colspan="3" valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Nevada</strong></font></div>
            </td>
          </tr>
          <tr>
            <td colspan="3" valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                or Other Jurisdiction of Incorporation)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="44%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>333-68008</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>91-2037688</strong></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
                Employer Identification No.)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="44%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>405
                N. Marienfeld, 3</strong></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><sup><strong>rd</strong></sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>
                Floor, Midland, Texas</strong></font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>79701</strong></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
                of Principal Executive Offices)</font></div>
            </td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
                Code)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="44%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">&#160;</td>
          </tr>
          <tr>
            <td colspan="3" valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(432)
                571-8049</strong></font></div>
            </td>
          </tr>
          <tr>
            <td colspan="3" valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant&#8217;s
                Telephone Number, Including Area Code)</font></div>
            </td>
          </tr>
          <tr>
            <td colspan="3" valign="top" width="90%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="44%">&#160;</td>
            <td align="left" valign="bottom" width="2%">&#160;</td>
            <td valign="top" width="44%">&#160;</td>
          </tr>
          <tr>
            <td colspan="3" valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
                Name or Former Address, if Changed Since Last
                Report)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
      Instruction A.2. below):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div>&#160;</div>
      <div>
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
        <hr style="COLOR: black" align="left" noshade size="2" width="100%">
      </div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
        <div>&#160;</div>
      </div>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                1.01</strong></font></div>
            </td>
            <td align="left" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ENTRY
                INTO A MATERIAL DEFINITIVE
                AGREEMENT.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      February 1, 2006, our wholly-owned subsidiary, Eddins-Walcher Company, a Texas
      corporation, entered into an Asset Purchase Agreement with Queen Oil and Gas
      Company, a New Mexico corporation, and its stockholders to acquire substantially
      all of the assets used in Queen&#8217;s gasoline, diesel, propane and lubricant
      distribution business. On March 10, 2006, we entered into an Addendum to the
      Asset Purchase Agreement, which, among other things, provided for an extension
      of the termination date to March 31, 2006 and an increase in the earnest money
      requirements to be paid to Queen from $100,000 to an aggregate of $1,000,000.
      We
      announced our entry into the Asset Purchase Agreement on a Current Report Form
      8-K, filed with the SEC on February 1, 2006 and the entry into the Addendum
      on a
      Current Report on Form 8-K, filed with the SEC on March 15, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      31, 2006, we entered into a Second Addendum to the Asset Purchase Agreement,
      which, provides for a change in our intended procedure for valuing the inventory
      of Queen and a method for releasing certain funds held by the title company
      until final title insurance policies have been prepared. The Second Addendum
      also provides that the effective date of the closing of our acquisition of
      the
      Queen assets be April 1, 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      also
      sold certain securities as described below, pursuant to which we have entered
      into other material agreements, as described in Item 3.02, which is incorporated
      herein by reference. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                2.01</strong></font></div>
            </td>
            <td align="left" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>COMPLETION
                OF ACQUISITION OF ASSETS.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      April 1, 2006 our wholly-owned subsidiary, Eddins-Walcher Company, a Texas
      corporation, completed the acquisition of substantially all of the assets used
      in Queen Oil and Gas Company&#8217;s gasoline, diesel, propane and lubricant business,
      pursuant to the terms of the Asset Purchase Agreement we entered into with
      Queen
      and its stockholders on February 1, 2006, as amended by Addendums on March
      10,
      2006 and March 31, 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      consideration for the acquisition of the assets, we paid $6,225,604 in cash
      (including $1,000,000 which had previously been delivered to Queen as earnest
      money). We are obligated to pay fifty percent (50%) of the estimated outstanding
      accounts receivable and fifty percent (50%) of the agreed upon value of the
      inventory by April 4, 2006. The estimated outstanding accounts receivable is
      $4,000,000. The amount due as payment for the inventory will be agreed upon
      between the parties prior to April 4, 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
      hundred and twenty (120) days after the closing, we will pay any additional
      amount to Queen equal to the total of (A) (i) the amount of accounts receivable
      outstanding at the closing date that are actually collected, less (ii) the
      payment of the 50% of the outstanding accounts receivable that we will have
      paid
      on April 4, 2006, and (B) the remaining value of the inventory that was not
      paid
      on April 4, 2006. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                3.02</strong></font></div>
            </td>
            <td align="left" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNREGISTERED
                SALES OF EQUITY SECURITIES.
</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Sale
      of Common Stock</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      29, 2006. we sold a total of 666,667 shares of our common stock in a private
      placement of our securities to an institutional investor in reliance upon the
      exemption provided by Section 4(2) of the Securities Act and/or Rule 506
      promulgated thereunder. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      sold
      the shares of common stock for $1.50 per share, resulting in gross proceeds
      of
      $1,000,000.50. We expect our net proceeds from the sale to be approximately
      $930,000 after payment of a commission of approximately $70,000 to our placement
      agent, Sanders Morris Harris. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      of
      the investors represented to us that they were an &#8220;accredited investor&#8221; within
      the meaning of Rule 501 of Regulation D under the Securities Act, and that
      the
      common stock was to be acquired for their own account for investment and not
      with a view to, or for resale in connection with any distribution of the
      securities within the meaning of the Securities Act and that they must bear
      the
      economic risk of their investment for an indefinite period of time because
      the
      common stock has not been registered under any securities laws and therefore
      cannot be sold without registration under applicable securities laws or an
      exemption from such registration is available.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      also
      entered into a registration rights agreement with the investors of the common
      stock pursuant to which we have agreed to use our reasonable best efforts to
      prepare and file a registration statement with the SEC to cover the common
      stock
      we sold within 90 days of the sale to the investors. The form of the
      registration rights agreement used was the same form we used in our sale of
      common stock on March 9, 2006, which is attached as an exhibit to our Current
      Report on Form 8-K, filed with the SEC on March 15, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Sale
      of Series A Preferred Stock</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      31, 2006. we sold a total of 6,750 shares of our Series A 8% Convertible
      Preferred Stock in a private placement of our securities to 14 investors in
      reliance upon the exemption provided by Section 4(2) of the Securities Act
      and/or Rule 506 promulgated thereunder.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      sold
      the shares of Series A Preferred Stock for $1,000 per share, resulting in gross
      proceeds of $6,750,000. Our net proceeds from the sale were $6,177,500 after
      payment of a commission and fees of approximately $572,500 to our placement
      agent, Sanders Morris Harris. We also issued a common stock warrant for the
      purchase of 291,667 shares of our common stock at an exercise price of $1.65
      to
      our placement agent pursuant to the terms of our engagement agreement with
      them
      and reimbursed them for $15,162.06 in expenses at the closing of the sale of
      Series A Preferred Stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      of
      the investors who purchased shares of the Series A Preferred Stock represented
      to us that they were an &#8220;accredited investor&#8221; within the meaning of Rule 501 of
      Regulation D under the Securities Act, and that the stock was to be acquired
      for
      their own account for investment and not with a view to, or for resale in
      connection with, any distribution and that they must bear the economic risk
      of
      their investment for an indefinite period of time because neither the preferred
      stock shares, nor the underlying common stock has been registered under any
      securities laws and therefore cannot be sold without registration under
      applicable securities laws or an exemption from such registration is
      available.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      part
      of the placement of the Series A Preferred Stock, we filed a Certificate of
      Designation with the Nevada Secretary of State for the Series A Preferred Stock,
      which provids for dividends of 8% dividends per annum, a liquidation preference,
      optional conversion into common stock at an initial conversion price of $1.50,
      anti-dilution protection, optional redemption after five years by the holder
      at
      125% of the initial purchase price and special voting rights, including the
      right to elect one member to our Board of Directors. The foregoing description
      of the rights and preferences of the Series A Preferred Stock is not complete
      and is qualified in its entirety by reference to the full text of the
      Certificate of Designation for the Series A Preferred Stock, a copy of which
      is
      filed herewith and is incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      also
      entered into a registration rights agreement with the investors in our Series
      A
      Preferred Stock pursuant to which we will use commercially reasonable efforts
      to
      file with the SEC, a registration statement covering the shares of common stock
      issuable upon conversion of the Series A Preferred Stock within sixty (60)
      days
      after the closing, and to cause such shares to be registered within one hundred
      and twenty (120) days (or in one hundred and eighty (180) days in the event
      of
      an SEC Review) following the date of the closing. If such a registration
      statement is not filed within such sixty (60) day period or declared effective
      within the appropriate period set forth above, or if thereafter the registration
      statement is not effective (subject to blackout dates not to exceed thirty
      (30)
      consecutive trading days in any three hundred sixty five (365) day period)
      then
      the conversion price of the Series A Preferred Stock will be reduced by $0.25
      and for each subsequent six-month period that the common stock is not
      registered, the conversion price will be reduced by an additional $0.25;
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>provided</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      that the
      conversion price not be reduced to lower than $0.75 from such adjustment. The
      form of the registration rights agreement is filed herewith and is incorporated
      herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                5.03</strong></font></div>
            </td>
            <td align="left" valign="top" width="80%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>AMENDMENTS
                TO ARTICLES OF
                INCORPORATION.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      March
      30, 2006, we filed a Certificate of Designation with the Nevada Secretary of
      State to create and establish the terms of the Series A Preferred Stock which
      we
      sold in a private placement as described in Item 3.02, which is incorporated
      by
      reference to this Item 5.03.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item&#160;9.01</strong></font></div>
            </td>
            <td align="left" valign="top" width="81%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FINANCIAL
                STATEMENTS AND EXHIBITS. </strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(a)</strong></font></div>
            </td>
            <td align="left" valign="top" width="86%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
                Statements of Businesses Acquired.
</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      be
      filed by amendment within 71 days of the date of this report.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(b)</strong></font></div>
            </td>
            <td align="left" valign="top" width="86%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Pro
                Forma Financial Information.
</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      be
      filed by amendment within 71 days of the date of this report.&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(d)</strong></font></div>
            </td>
            <td align="left" valign="top" width="86%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibits.
                </strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following exhibits are filed or furnished herewith:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">&#160;</div>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="middle" width="10%">&#160;</td>
            <td align="left" valign="bottom" width="5%">&#160;</td>
            <td align="left" valign="middle" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Exhibit&#160;No.</u>&#160;&#160;&#160;&#160;</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Description&#160;</u>&#160;&#160;</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></div>
            </td>
            <td align="left" valign="bottom" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
                of Designation for the Series A Preferred Stock. </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td align="left" valign="bottom" width="5%">&#160;</td>
            <td align="left" valign="bottom" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="bottom" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of Registration Rights Agreement by and between United Fuel &amp; Energy
                Corporation and the Purchasers of the United Fuel &amp; Energy&#8217;s Series A
                Preferred Stock. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div>
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
      <div>&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="48%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNITED
                FUEL &amp; ENERGY CORPORATION</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="48%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="48%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                April 4, 2006</font></div>
            </td>
            <td align="left" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
            </td>
            <td align="left" valign="top" width="26%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                Bobby W. Page</font></div>
            </td>
            <td align="left" valign="top" width="22%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="48%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Bobby
                W. Page</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="48%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Vice-President
                and Chief Financial
                Officer</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>EXHIBIT
      INDEX </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="middle" width="10%">&#160;</td>
            <td align="left" valign="bottom" width="6%">&#160;</td>
            <td align="left" valign="middle" width="74%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="bottom" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Exhibit&#160;No.</u>&#160;&#160;&#160;&#160;</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="top" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Description&#160;&#160;&#160;&#160;</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1</font></div>
            </td>
            <td align="left" valign="bottom" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certificate
                of Designation for the Series A Preferred Stock. </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">&#160;</td>
            <td align="left" valign="bottom" width="6%">&#160;</td>
            <td align="left" valign="bottom" width="74%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="bottom" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="left" valign="bottom" width="74%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
                of Registration Rights Agreement by and between United Fuel &amp; Energy
                Corporation and the Purchasers of the United Fuel &amp; Energy&#8217;s Series A
                Preferred Stock. </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
  </body>
</html>
{"company-data": {"conformed-name": "UNITED FUEL & ENERGY CORP", "cik": "0001137031", "assigned-sic": "5960", "irs-number": "912037688", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-32473", "film-number": "06735403"}, "business-address": {"street1": "405 N. MARIENFELD", "city": "MIDLAND", "state": "TX", "zip": "79701", "phone": "432-571-8049"}, "mail-address": {"street1": "405 N. MARIENFELD", "city": "MIDLAND", "state": "TX", "zip": "79701"}, "former-company": [{"former-conformed-name": "BRANDS SHOPPING NETWORK INC", "date-changed": "20020201"}, {"former-conformed-name": "BRANDS SHOPPING NETWORK  INC", "date-changed": "20020201"}, {"former-conformed-name": "USA DEALERS AUCTION COM INC", "date-changed": "20010321"}]}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
WASHINGTON,
      DC 20549
FORM
      8-K
CURRENT
      REPORT PURSUANT
TO
      SECTION 13 OR 15(D) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of
      report (Date of earliest event reported)
March
      29, 2006
UNITED
      FUEL & ENERGY CORPORATION
(Exact
      Name of Registrant as Specified in Its Charter)
Nevada
(State
                or Other Jurisdiction of Incorporation)
333-68008
91-2037688
(Commission
                File Number)
(IRS
                Employer Identification No.)
405
                N. Marienfeld, 3
rd
Floor, Midland, Texas
79701
(Address
                of Principal Executive Offices)
(Zip
                Code)
(432)
                571-8049
(Registrant's
                Telephone Number, Including Area Code)
(Former
                Name or Former Address, if Changed Since Last
                Report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (
see
General
      Instruction A.2. below):
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
o
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
ITEM
                1.01
ENTRY
                INTO A MATERIAL DEFINITIVE
                AGREEMENT.
On
      February 1, 2006, our wholly-owned subsidiary, Eddins-Walcher Company, a Texas
      corporation, entered into an Asset Purchase Agreement with Queen Oil and Gas
      Company, a New Mexico corporation, and its stockholders to acquire substantially
      all of the assets used in Queen's gasoline, diesel, propane and lubricant
      distribution business. On March 10, 2006, we entered into an Addendum to the
      Asset Purchase Agreement, which, among other things, provided for an extension
      of the termination date to March 31, 2006 and an increase in the earnest money
      requirements to be paid to Queen from $100,000 to an aggregate of $1,000,000.
      We
      announced our entry into the Asset Purchase Agreement on a Current Report Form
      8-K, filed with the SEC on February 1, 2006 and the entry into the Addendum
      on a
      Current Report on Form 8-K, filed with the SEC on March 15, 2006.
On
      March
      31, 2006, we entered into a Second Addendum to the Asset Purchase Agreement,
      which, provides for a change in our intended procedure for valuing the inventory
      of Queen and a method for releasing certain funds held by the title company
      until final title insurance policies have been prepared. The Second Addendum
      also provides that the effective date of the closing of our acquisition of
      the
      Queen assets be April 1, 2006.
We
      also
      sold certain securities as described below, pursuant to which we have entered
      into other material agreements, as described in Item 3.02, which is incorporated
      herein by reference.
ITEM
                2.01
COMPLETION
                OF ACQUISITION OF ASSETS.
Effective
      April 1, 2006 our wholly-owned subsidiary, Eddins-Walcher Company, a Texas
      corporation, completed the acquisition of substantially all of the assets used
      in Queen Oil and Gas Company's gasoline, diesel, propane and lubricant business,
      pursuant to the terms of the Asset Purchase Agreement we entered into with
      Queen
      and its stockholders on February 1, 2006, as amended by Addendums on March
      10,
      2006 and March 31, 2006.
As
      consideration for the acquisition of the assets, we paid $6,225,604 in cash
      (including $1,000,000 which had previously been delivered to Queen as earnest
      money). We are obligated to pay fifty percent (50%) of the estimated outstanding
      accounts receivable and fifty percent (50%) of the agreed upon value of the
      inventory by April 4, 2006. The estimated outstanding accounts receivable is
      $4,000,000. The amount due as payment for the inventory will be agreed upon
      between the parties prior to April 4, 2006.
One
      hundred and twenty (120) days after the closing, we will pay any additional
      amount to Queen equal to the total of (A) (i) the amount of accounts receivable
      outstanding at the closing date that are actually collected, less (ii) the
      payment of the 50% of the outstanding accounts receivable that we will have
      paid
      on April 4, 2006, and (B) the remaining value of the inventory that was not
      paid
      on April 4, 2006.
ITEM
                3.02
UNREGISTERED
                SALES OF EQUITY SECURITIES.
Sale
      of Common Stock
On
      March
      29, 2006. we sold a total of 666,667 shares of our common stock in a private
      placement of our securities to an institutional investor in reliance upon the
      exemption provided by Section 4(2) of the Securities Act and/or Rule 506
      promulgated thereunder.
We
      sold
      the shares of common stock for $1.50 per share, resulting in gross proceeds
      of
      $1,000,000.50. We expect our net proceeds from the sale to be approximately
      $930,000 after payment of a commission of approximately $70,000 to our placement
      agent, Sanders Morris Harris.
Each
      of
      the investors represented to us that they were an "accredited investor" within
      the meaning of Rule 501 of Regulation D under the Securities Act, and that
      the
      common stock was to be acquired for their own account for investment and not
      with a view to, or for resale in connection with any distribution of the
      securities within the meaning of the Securities Act and that they must bear
      the
      economic risk of their investment for an indefinite period of time because
      the
      common stock has not been registered under any securities laws and therefore
      cannot be sold without registration under applicable securities laws or an
      exemption from such registration is available.
We
      also
      entered into a registration rights agreement with the investors of the common
      stock pursuant to which we have agreed to use our reasonable best efforts to
      prepare and file a registration statement with the SEC to cover the common
      stock
      we sold within 90 days of the sale to the investors. The form of the
      registration rights agreement used was the same form we used in our sale of
      common stock on March 9, 2006, which is attached as an exhibit to our Current
      Report on Form 8-K, filed with the SEC on March 15, 2006.
Sale
      of Series A Preferred Stock
On
      March
      31, 2006. we sold a total of 6,750 shares of our Series A 8% Convertible
      Preferred Stock in a private placement of our securities to 14 investors in
      reliance upon the exemption provided by Section 4(2) of the Securities Act
      and/or Rule 506 promulgated thereunder.
We
      sold
      the shares of Series A Preferred Stock for $1,000 per share, resulting in gross
      proceeds of $6,750,000. Our net proceeds from the sale were $6,177,500 after
      payment of a commission and fees of approximately $572,500 to our placement
      agent, Sanders Morris Harris. We also issued a common stock warrant for the
      purchase of 291,667 shares of our common stock at an exercise price of $1.65
      to
      our placement agent pursuant to the terms of our engagement agreement with
      them
      and reimbursed them for $15,162.06 in expenses at the closing of the sale of
      Series A Preferred Stock.
Each
      of
      the investors who purchased shares of the Series A Preferred Stock represented
      to us that they were an "accredited investor" within the meaning of Rule 501 of
      Regulation D under the Securities Act, and that the stock was to be acquired
      for
      their own account for investment and not with a view to, or for resale in
      connection with, any distribution and that they must bear the economic risk
      of
      their investment for an indefinite period of time because neither the preferred
      stock shares, nor the underlying common stock has been registered under any
      securities laws and therefore cannot be sold without registration under
      applicable securities laws or an exemption from such registration is
      available.
As
      part
      of the placement of the Series A Preferred Stock, we filed a Certificate of
      Designation with the Nevada Secretary of State for the Series A Preferred Stock,
      which provids for dividends of 8% dividends per annum, a liquidation preference,
      optional conversion into common stock at an initial conversion price of $1.50,
      anti-dilution protection, optional redemption after five years by the holder
      at
      125% of the initial purchase price and special voting rights, including the
      right to elect one member to our Board of Directors. The foregoing description
      of the rights and preferences of the Series A Preferred Stock is not complete
      and is qualified in its entirety by reference to the full text of the
      Certificate of Designation for the Series A Preferred Stock, a copy of which
      is
      filed herewith and is incorporated herein by reference.
We
      also
      entered into a registration rights agreement with the investors in our Series
      A
      Preferred Stock pursuant to which we will use commercially reasonable efforts
      to
      file with the SEC, a registration statement covering the shares of common stock
      issuable upon conversion of the Series A Preferred Stock within sixty (60)
      days
      after the closing, and to cause such shares to be registered within one hundred
      and twenty (120) days (or in one hundred and eighty (180) days in the event
      of
      an SEC Review) following the date of the closing. If such a registration
      statement is not filed within such sixty (60) day period or declared effective
      within the appropriate period set forth above, or if thereafter the registration
      statement is not effective (subject to blackout dates not to exceed thirty
      (30)
      consecutive trading days in any three hundred sixty five (365) day period)
      then
      the conversion price of the Series A Preferred Stock will be reduced by $0.25
      and for each subsequent six-month period that the common stock is not
      registered, the conversion price will be reduced by an additional $0.25;
provided
that the
      conversion price not be reduced to lower than $0.75 from such adjustment. The
      form of the registration rights agreement is filed herewith and is incorporated
      herein by reference.
ITEM
                5.03
AMENDMENTS
                TO ARTICLES OF
                INCORPORATION.
On
      March
      30, 2006, we filed a Certificate of Designation with the Nevada Secretary of
      State to create and establish the terms of the Series A Preferred Stock which
      we
      sold in a private placement as described in Item 3.02, which is incorporated
      by
      reference to this Item 5.03.
Item 9.01
FINANCIAL
                STATEMENTS AND EXHIBITS.
(a)
Financial
                Statements of Businesses Acquired.
To
      be
      filed by amendment within 71 days of the date of this report.
(b)
Pro
                Forma Financial Information.
To
      be
      filed by amendment within 71 days of the date of this report.
(d)
Exhibits.
The
      following exhibits are filed or furnished herewith:
Exhibit No.
Description
3.1
Certificate
                of Designation for the Series A Preferred Stock.
4.1
Form
                of Registration Rights Agreement by and between United Fuel & Energy
                Corporation and the Purchasers of the United Fuel & Energy's Series A
                Preferred Stock.
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.
UNITED
                FUEL & ENERGY CORPORATION
Date:
                April 4, 2006
By:
/s/
                Bobby W. Page
Bobby
                W. Page
Vice-President
                and Chief Financial
                Officer
EXHIBIT
      INDEX
Exhibit No.
Description
3.1
Certificate
                of Designation for the Series A Preferred Stock.
4.1
Form
                of Registration Rights Agreement by and between United Fuel & Energy
                Corporation and the Purchasers of the United Fuel & Energy's Series A
                Preferred Stock.