<SUBMISSION>
<ACCESSION-NUMBER>0000911801-01-500025
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20010630
<FILING-DATE>20010814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>EARTHSHELL CORP
<CIK>0000911801
<ASSIGNED-SIC>2650
<IRS-NUMBER>770322379
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-23567
<FILM-NUMBER>1709622
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>9020 JUNCTION DRIVE
<STREET2>SUITE D
<CITY>ANNAPOLIS JUNCTION
<STATE>MD
<ZIP>20701-1146
<PHONE>3019571330
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>9020 JUNCTION DRIVE
<STREET2>SUITE D
<CITY>ANNAPOLIS JUNCTION
<STATE>MD
<ZIP>20701-1146
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>EARTHSHELL CONTAINER CORP
<DATE-CHANGED>19960521
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>f10q-q2_2001.htm
<DESCRIPTION>10Q 2Q 2001
<TEXT>

<HTML>
<head>
<title>10Q quarter ended June 30, 2001</title></head>
<body>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>
UNITED STATES <br>SECURITIES AND EXCHANGE COMMISSION <br>
WASHINGTON, D.C. 20549</font></h1>

<HR SIZE=1 width=15% NOSHADE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 10-Q</FONT></H1>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                                         |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)<br>
                                                OF THE SECURITIES EXCHANGE ACT OF 1934</font></P>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For the Quarterly Period Ended June 30, 2001</font></p>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
|_| TRANSITION REPORT PURSUANT SECTION 13 OR 15 (d)<br>
OF SECURITIES EXCHANGE ACT OF 1934</font></p>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For the Transition Period From ______to_________</font></p>

<HR SIZE=1 width=15% NOSHADE>
<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Commission File Number 333-13287
</font></p>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4><b>EARTHSHELL CORPORATION</b></FONT><br>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(Exact name of registrant as specified in its charter)</font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=50% align=center><b>Deleware</b></TD>
<TD WIDTH=50% align=center><b>77-0322379</b></td></tr>
<TR VALIGN=TOP>
<TD WIDTH=50% align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(State or other jurisdiction of<br>incorporation or organization)</font></td>
<TD WIDTH=50% align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(I.R.S. Employer<br>Identification No.)</font></td>
</tr>
</table>



<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>800
Miramonte Drive, Santa Barbara, California 93109</b><br>
(Address of principal executive office)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(Zip Code)</font></p>

<p ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Registrant's telephone number, including area code: (805) 897-2248
</font></p>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (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 |X|   No |_|</FONT></TD>
</TR>
</TABLE>
<BR>

<p><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of shares outstanding of the registrant's common stock as of August 14, 2001 is 114,169,194.
</font></p>

<page>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>EARTHSHELL
CORPORATION<br>FORM 10-Q
<br>For the Quarter Ended June 30, 2001<br>
INDEX</FONT></H1>




<PRE>

<b><i>Part I. Financial Information</i></b>
      Item 1.      Financial Statements                                                                    Page
                   a)       Balance Sheets
                        as of June 30, 2001 (unaudited) and December 31, 2000 ......................         1

                   b)       Statements of Operations
                        for the three and six months ended June 30, 2001 and June 30, 2000 (unaudited)
                        and for the period from November 1, 1992 (inception) through June 30, 2001
                        (unaudited).................................................................         2

                   c)       Statements of Stockholders' Equity (Deficit)
                        for the period from November 1, 1992 (inception) to June 30, 2001 (unaudited)
                                                                                                             3
                   d)       Statements of Cash Flows
                        for the six months ended June 30, 2001 and June 30, 2000 (unaudited) and for
                        the period from November 1, 1992 (inception) through June 30, 2001 (unaudited)
                                                                                                             4
                   e)       Notes to Financial Statements
                          (unaudited)...............................................................         5

      Item 2.      Management's Discussion and Analysis of Financial
                   Condition and Results of Operations..............................................         6

      Item 3.      Quantitative and Qualitative Disclosures About Market Risk.......................         9


<b><i>Part II. Other Information</i></b>

      Item 1.      Legal Proceedings................................................................         9
      Item 2.      Changes in Securities............................................................         9
      Item 3.      Defaults Upon Senior Securities..................................................         9
      Item 4.      Submission of Matters to a Vote for Security Holders.............................         9
      Item 5.      Other Information................................................................         9
      Item 6       Exhibits and Reports on Form 8-K.................................................         9
      <b><i>Signature</i></b>.....................................................................................        10

</PRE>

<PAGE>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>EARTHSHELL
CORPORATION<br>
(A Development Stage Enterprise)<br>BALANCE
SHEETS</FONT></H1>

<PRE>
                                                                              June 30            December 31,
                                                                                2001                 2000
                                                                            (unaudited)
                                                                         -------------------  --------------------
<b>ASSETS</b>
<b>CURRENT ASSETS:</b>
      Cash and cash equivalents......................................            $4,783,828            $7,791,654
      Prepaid expenses and other current assets......................               514,637               492,889
                                                                         -------------------  --------------------
           Total current assets......................................             5,298,465             8,284,543

RESTRICTED CASH......................................................             3,500,000             3,500,000

PROPERTY AND EQUIPMENT, NET..........................................            35,399,813            36,265,647

INVESTMENT IN JOINT VENTURE..........................................               378,428               423,428

                                                                         -------------------  --------------------
<b>TOTAL</b>................................................................           <b>$44,576,706</b>           <b>$48,473,618</b>
                                                                         ===================  ====================

<b>LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:</b>
     Accounts payable and accrued expenses...........................            $4,086,453            $5,910,897
     Trade payable to majority stockholder...........................            -                        266,312
                                                                         -------------------  --------------------
         Total current liabilities...................................             4,086,453             6,177,209
                                                                         -------------------  --------------------

COMMITMENTS AND CONTINGENCIES

<b>STOCKHOLDERS' EQUITY:</b>
      Preferred Stock, $.01 par value, 10,000,000 shares authorized;
          9,170,000 Series A shares designated; no shares issued and
          outstanding as of June 30, 2001 and December 31, 2000......
                                                                                          -                     -
      Common stock, $.01 par value, 200,000,000 shares authorized;
          111,919,194 and 104,502,335 shares issued and outstanding as
          of June 30, 2001 and December 31, 2000.....................
                                                                                  1,119,192             1,045,023
      Additional paid-in common capital..............................           250,817,966           235,192,471
      Deficit accumulated during the development stage...............         (211,446,905)         (193,941,085)
                                                                         -------------------  --------------------

Total stockholders' equity...........................................            40,490,253            42,296,409
                                                                         -------------------  --------------------

<b>TOTAL</b>................................................................           <b>$44,576,706</b>           <b>$48,473,618</b>
                                                                         ===================  ====================
</PRE>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
See notes to financial statements.
</FONT></P>

<PAGE>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>EARTHSHELL
CORPORATION<br>(A Development Stage Enterprise)<br>
STATEMENTS OF OPERATIONS<br>
(Unaudited)</FONT></H1>

<PRE>
                                                        For the                           For the                 November 1,
                                                     Three Months                       Six Months                    1992
                                                    Ended June 30,                    Ended June 30,              (inception)
                                                                                                                through June 30,
                                              ------------------------------   ------------------------------   -----------------
                                                 2001             2000             2001            2000               2001
                                              --------------  --------------   --------------  --------------   -----------------
Expenses:

Related party research and development......       $367,694      $2,486,429         $691,142      $4,470,852         $67,619,589

Other research and development..............      4,007,152       4,908,675        8,430,443       8,978,396          71,620,204

Related party general and administrative
 ...expenses.................................              -          36,134                -          80,435           2,240,502

Other general and administrative expenses...      3,893,262       2,238,128        6,078,168       4,226,038          49,228,701

Depreciation and amortization...............      1,225,267       1,427,842        2,510,449       2,850,096          15,998,368

Related party patent expenses...............              -         126,383                -         269,773           8,693,105
                                              --------------  --------------   --------------  --------------   -----------------
Total expenses..............................      9,493,375      11,223,591       17,710,202      20,875,590         215,400,469



Interest income.............................       (85,071)       (333,228)        (204,382)       (819,659)        (10,524,105)

Related party interest expense..............              -               -                -               -           4,770,731

Other interest expense......................              -               -                -               -           1,788,738
                                              --------------  --------------   --------------  --------------   -----------------
Loss Before Income Taxes....................      9,408,304      10,890,363       17,505,820      20,055,931         211,435,833



Income Taxes................................              -               -                -               -              11,071
                                               -------------  --------------   --------------  --------------   -----------------
Net Loss....................................      9,408,304      10,890,363       17,505,820      20,055,931         211,446,904

Preferred Dividends ........................              -               -                -               -           9,926,703

                                                ------------  --------------   --------------  --------------   -----------------
Net Loss Available To Common
   Stockholders.............................     $9,408,304     $10,890,363     $17,505,820     $20,055,931         $221,373,607
                                              ===============  ==============   ==============  ==============   =================
Basic And Diluted Loss Per Common
   Share....................................          $0.08           $0.11            $0.16           $0.20               $2.47

Weighted Average Number Of Common
    Shares..................................    111,009,853     100,381,321      109,007,431     100,213,243          89,770,765

</PRE>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
See notes to financial statements.
</FONT></P>


<PAGE>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>EARTHSHELL CORPORATION<br>
(A Development Stage Enterprise)<br>
STATEMENTS OF STOCKHOLDERS&#146; EQUITY (DEFICIT)<br>(Unaudited)</FONT></H1>

<PRE>
                            Cumulative Convertible   Additional                            Additional     Deficit
                                Preferred Stock      Paid-In                                Paid-In     Accumulated
                                   Series A          Preferred       Common Stock           Common        during
                            ----------------------               -------------------------              Development
                              Shares       Amount    Capital     Shares        Amount       Capital        Stage        Total
                            ------------  -------- ------------- ----------- ------------ ---------- -------------- ----------

ISSUANCE OF COMMON STOCK AT
   INCEPTION................          -         -             -  82,530,000     $3,150       $6,850               -      $10,000
Sale of preferred stock, net  6,988,850      $267   $24,472,734           -          -            -               -   24,473,001
Net loss....................          -         -             -           -          -            -    $(7,782,551)   (7,782,551)
                            ------------  -------- -------------  ----------- --------- ------------ --------------  -----------
BALANCE, DECEMBER 31, 1993    6,988,850       267    24,472,734  82,530,000      3,150        6,850     (7,782,551)   16,700,450
Net loss....................          -         -             -           -          -            -    (16,582,080)  (16,582,080)
                            ------------  -------- -------------  ----------- --------- ------------ --------------  ------------
BALANCE, DECEMBER 31, 1994    6,988,850       267    24,472,734  82,530,000      3,150        6,850    (24,364,631)      118,370
Contribution to equity......          -         -             -           -          -    1,117,723               -    1,117,723
Net loss....................          -         -             -           -          -            -    (13,914,194)  (13,914,194)
                            ------------  -------- ------------  ------------ --------- ------------ --------------  ------------
BALANCE, DECEMBER 31, 1995    6,988,850       267    24,472,734  82,530,000      3,150    1,124,573    (38,278,825)  (12,678,101)
Contribution to equity......          -         -             -           -          -      650,000               -      650,000
Issuance of stock warrants..          -         -             -           -          -      246,270               -      246,270
Net loss....................          -         -             -           -          -            -    (16,950,137)  (16,950,137)
                            ------------  -------- ------------  ------------ --------- -----------  --------------  -----------
BALANCE, DECEMBER 31, 1996    6,988,850       267    24,472,734  82,530,000      3,150    2,020,843    (55,228,962)  (28,731,968)
Compensation related to
   stock options and warrant          -         -             -           -          -    3,156,659               -    3,156,659
Net loss....................          -         -             -           -          -            -    (18,992,023)  (18,992,023)
                            ------------  -------- ------------  ------------ -------- ------------  --------------  -----------
BALANCE, DECEMBER 31, 1997    6,988,850       267    24,472,734  82,530,000      3,150    5,177,502    (74,220,985)  (44,567,332)
262 to 1 stock split........          -    69,621      (69,621)           -    822,150    (822,150)               -            -
Conversion of preferred
   stock to common stock.... (6,988,850)  (69,888)  (24,403,113)  6,988,850     69,888   24,403,113               -            -
Issuance of common stock....          -         -           -    10,526,316    105,263  205,883,493               -  205,988,756
Preferred stock dividends...          -         -           -            -          -    (9,926,703)              -   (9,926,703)
Net loss....................          -         -           -            -          -            -     (26,620,052)  (26,620,052)
                            ------------  -------- ------------  -----------  -------- ------------- --------------- ------------
BALANCE, DECEMBER 31, 1998            -         -           -   100,045,166  1,000,451  224,715,255   (100,841,037)  124,874,669
Net loss....................          -         -           -             -          -            -    (44,188,443)  (44,188,443)
                            ------------  -------- ------------ ------------ --------- ------------  --------------  -----------
BALANCE, DECEMBER 31, 1999            -         -           -   100,045,166  1,000,451  224,715,255   (145,029,480)   80,686,226
Net Loss....................          -         -           -             -          -            -    (48,911,605)  (48,911,605)
Issuance of common stock....          -         -           -     4,457,169     44,572   10,477,216                   10,521,788
                            ------------  -------- ------------ ----------- ---------- ------------- --------------  ------------
BALANCE, DECEMBER 31, 2000            -         -           -   104,502,335  1,045,023  235,192,471   (193,941,085)   42,296,409
Net Loss....................          -         -           -             -          -            -    (17,505,820)  (17,505,820)
Issuance of common stock....          -         -           -     7,416,859     74,169   15,625,495              -    15,699,664
                            ------------  -------- ------------ ----------- ---------- ------------- --------------  ------------
BALANCE, JUNE 30, 2001                -         -           -   111,919,194 $1,119,192 $250,817,966  $(211,446,905)  $40,490,253
                            ============  ======== =========== ============ ========== ============= ==============  ============
</PRE>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
See notes to financial statements.
</FONT></P>


<PAGE>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>EARTHSHELL CORPORATION<br>
(A Development Stage Enterprise)<br>
STATEMENTS OF CASH FLOWS<br>(Unaudited)</FONT></H1>

<PRE>
                                                                                                    November 1,
                                                                             For the                   1992
                                                                        Six Months Ended            (inception)
                                                                            June 30,                  through
                                                                                                     June 30,
                                                                  ------------------------------  ----------------
                                                                      2001            2000             2001
                                                                  -------------   --------------  ----------------



CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss....................................................      $(17,505,820)   $(20,055,931)    $(211,446,905)
Adjustments to reconcile net loss to net cash used in operating
activities:
   Depreciation and amortization............................         2,510,449        2,850,096        15,998,368
   Issuance of stock options to director, consultant and officer             -                -         3,861,522
   Issuance of stock grants to director, consultant and officer        515,398                -           751,724
   Amortization of debt issue costs.........................                 -                -           271,277
   Loss on sale or disposal of property and equipment.......                 -          194,937        18,486,753
   Loss from investment in joint venture....................            45,000          103,598           137,010
   Net Loss on Sale of Investments..........................                 -                -            32,496
   Accretion of Discounts on Investments....................                 -                -          (410,084)
Changes in operating assets and liabilities:
   Prepaid expenses and other current assets................          (21,748)        (158,588)          (514,637)
   Accounts payable and accrued expenses....................       (1,588,118)        (978,015)         4,086,453
   Trade payable to majority stockholder....................         (266,312)        (875,882)                 -
                                                                  -------------   --------------  ----------------
    Net cash used in operating activities...................      (16,311,151)     (18,919,785)      (168,746,023)
                                                                  -------------   --------------  ----------------


CASH FLOWS FROM INVESTING ACTIVITIES:
Sale (purchase) of short-term investments...................                 -        8,970,638       (52,419,820)
Purchase of restricted time deposit.........................                 -                -        (3,500,000)
Proceeds from sales and redemptions of investments..........                 -                -        52,797,408
Proceeds from sale of property and equipment................                 -                -           297,670
Investment in joint venture.................................                                  -          (515,438)
Purchase of property and equipment..........................       (1,644,615)       (3,764,414)      (71,054,339)
                                                                  -------------   --------------  ----------------
    Net (cash used) provided by investing activities........       (1,644,615)        5,224,224       (74,394,519)
                                                                  -------------   --------------  ----------------


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable to stockholders.....                 -                -        14,270,000
Proceeds from drawings on line of credit with bank..........                 -                -        14,000,000
Proceeds from issuance of common stock......................        14,947,940        3,615,929       246,532,364
Common stock issuance costs.................................                 -                -       (15,178,641)
Preferred dividends paid....................................                 -                -        (9,926,703)
Proceeds from issuance of preferred stock...................                 -                -        25,675,000
Preferred stock issuance costs..............................                 -                -        (1,201,999)
Repayment of line of credit with bank.......................                 -                -       (14,000,000)
Repayment of note payable...................................                 -                -       (12,245,651)

                                                                  -------------   --------------  ----------------
    Net cash provided by financing activities...............        14,947,940        3,615,929       247,924,370
                                                                  -------------   --------------  ----------------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............       (3,007,826)     (10,079,633)         4,783,828

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD..............         7,791,654       26,412,553                 -
                                                                  -------------   --------------  ----------------

CASH AND CASH EQUIVALENTS, END OF PERIOD....................        $4,783,828      $16,332,920         4,783,828
                                                                  =============   ==============  ================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
     Income taxes...........................................                 -              800           $11,071
     Interest...............................................                 -                -        $3,028,240
Warrants issued with debt...................................                 -                -          $306,168
Transfer of property from EKI...............................                 -                -           $28,745
Conversion of preferred stock to common stock...............                 -                -           $69,888
Tax Liability related to stock grants.......................          $236,326                -                 -

</PRE>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
See notes to financial statements.
</FONT></P>


<PAGE>


<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>
EARTHSHELL CORPORATION
</B></FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
NOTES TO FINANCIAL STATEMENTS</B>  <I>(Unaudited)</I><BR>
JUNE 30, 2001
</FONT></P>
_____________________________________________________________________________________

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Presentation
of Financial Information</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The foregoing interim
financial information is unaudited and has been prepared from the books and
records of EarthShell Corporation (the &#147;Company&#148;). In the opinion of
management, the financial information reflects all adjustments necessary for a
fair presentation of the financial condition, results of operations and cash
flows of the Company in conformity with generally accepted accounting
principles. All such adjustments were of a normal recurring nature for interim
financial reporting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The accompanying unaudited
financial statements and these notes do not include certain information and
footnote disclosures required by generally accepted accounting principles which
were included in the Company&#146;s financial statements for the year ended
December 31, 2000. The information included in this Form 10-Q should be read in
conjunction with Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations and financial statements and notes thereto
for the year ended December 31, 2000 included in the Company&#146;s Annual
Report on Form 10-K. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Basic and diluted loss per
common share is calculated based on the weighted average shares outstanding of
111,009,853 and 109,007,431 for the three and six months ended June 30, 2001,
respectively and 100,381,321 and 100,213,243 for the three and six months ended
June 30, 2000. Basic and diluted per share calculation is the same because
common stock equivalents are anti-dilutive. Incremental dilutive shares which would be
issuable using the treasury stock method would be 382,237 and 43,761 at June 30,
2001 and 2000, respectively. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Related Party
Transactions</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the three months ended
June 30, 2001 and 2000, the Company paid or accrued $367,694 and $2,486,429
respectively, and $691,142 and $4,470,852 for the six months ended June 30, 2001
and 2000, respectively for services performed by EKI under the Amended and
Restated Technical Services Agreement as amended October 1, 1997, between the Company and
EKI. On January 1, 2001 the Company directly hired the EKI personnel critical to
the Company&#146;s future development programs and since that time has
significantly reduced the use of EKI technical services and related expenses.
The related party expenses for 2001 are attributable to research and development
related to sandwich wraps and films being performed for the Company by an
affiliate of EKI. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Effective January 1,
2001 the Company assumed direct responsibility for managing the patent
portfolio underlying its license from EKI and pays such patent expenses
directly. For the three and six months ended June 30, 2000, the
Company paid or accrued $126,383 and $269,773 respectively to EKI for patent
costs under the Amended and Restated Agreement for Allocation of Patent Costs
 effective October 1, 1997.  </FONT></P>


<PAGE>


<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>EARTHSHELL
CORPORATION</B></FONT></p>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
NOTES TO FINANCIAL STATEMENTS</B>  <I>(Unaudited)</I> - continued
<BR>
JUNE 30, 2001
</FONT></P>
_____________________________________________________________________________________

<PRE>
<B>Property and Equipment</B>

At June 30, 2001, property and equipment consisted of the following:

Commercial Manufacturing Equipment: Construction in progress, at the Owings Mills
Maryland plant of Sweetheart Company...............................................         $35,494,703

Product Development Center:
     Equipment.....................................................................           3,793,737
     Construction in progress......................................................           8,971,871
     Leasehold improvements........................................................             571,361
                                                                                           ----------------
                                                                                             13,336,969

Office equipment and furniture.....................................................             774,146

Less: accumulated depreciation and amortization....................................         (14,206,005)
                                                                                           ----------------

Property and equipment - net.......................................................          $35,399,813
                                                                                           ================
</PRE>
<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Contingencies</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On August 2, 1999, Novamont
S.p.A., an Italian company specializing in the manufacture of a biodegradable
plastic resin and products, filed a complaint in the United States District
Court for the Northern District of Illinois alleging four counts of infringement
of three patents. On August 3, 2001 the Company entered into a Settlement
Agreement with Novamont wherein the lawsuit by Novamont was dismissed with no
material adverse financial effect on the Company, and the Company's rights to
manufacture and distribute the foodservice disposable through its operating
partners are fully protected and expanded to include the application of
Novamont technology. </FONT></P>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Information contained in
this Quarterly Report on Form 10-Q including &#147;Management&#146;s Discussion
and Analysis of Financial Condition and Results of Operations&#148; contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, as amended. These statements may be identified by
the use of forward-looking terminology such as &#147;may,&#148;
&#147;will,&#148; &#147;expect,&#148; &#147;anticipate,&#148;
&#147;estimate,&#148; or &#147;continue,&#148; or the negative thereof or other
comparable terminology. Any one factor or combination of factors could cause the
Company&#146;s actual operating performance or financial results to differ
substantially from those anticipated by management that are described herein.
Factors influencing the Company&#146;s operating performance and financial
results include, but are not limited to, changes in the general economy, the
availability of financing, governmental regulations concerning, but not limited
to, environmental issues, and other risks and unforeseen circumstances affecting
the Company&#146;s business and should be read in conjunction with other risk factors
discussed in the Company&#146;s Annual Report on Form 10-K for the fiscal year
ended December 31, 2000. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Overview of
Operations</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company was organized
in November 1992 as a Delaware corporation and is a development stage company
engaged in the commercialization of a proprietary composite material, designed
with the environment in mind, for the manufacture of disposable packaging for
the foodservice industry, such as hinged-lid containers, plates, bowls, sandwich
wraps, and cups. The Company has an exclusive, worldwide, royalty-free license
from EKI to use and license the EKI technology to manufacture and sell
disposable, single-use containers for packaging or serving food or beverages
intended for consumption within a short period of time (&#147;EARTHSHELL
Products&#148;). The Company does not have the right to use the EKI technology
for other purposes. The Company licenses or joint ventures with existing
manufacturers of foodservice disposables to manufacture and distribute
EARTHSHELL Products. The Company expects to derive revenues primarily from
license royalties and profit distributions from joint ventures that are licensed
to manufacture EARTHSHELL Products. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company has experienced
aggregate net losses of approximately $211 million from its inception through
June 30, 2001 and expects to continue to incur operating losses until its
products are more broadly used and have achieved greater market acceptance and
market penetration. EARTHSHELL Products are being sold through or in
cooperation with its operating partners and these sales are being booked
according to the terms of the respective operating agreement. For example,
under the terms of its agreement with Sweetheart Cup Company, sales of the
Company's clamshells for the Big Mac<FONT FACE="Symbol">&#226;</FONT> sandwich are recorded on Sweetheart's
books as revenue, and are credited to the Company as
an offset to the cost of start-up manufacturing operations. Successful future
operations will depend upon the ability of the Company, its licensees and
joint venture partners to commercialize multiple EARTHSHELL Products. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Results of
Operations</FONT></H2>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Comparison of the Three
and Six Months Ended June 30, 2001, to the Three and Six Months June 30, 2000.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Total Research and
Development Expenses</I> </B>Total research and development expenditures for the
development of EarthShell Products decreased $4.3 million to $9.1 million from
$13.4 million for the six months ended June 30, 2001 compared to the six months
ended June 30, 2000, and decreased $3.0 million to $4.4 million from $7.4
million for the three months ended June 30, 2001 compared to the three months
ended June 30, 2000. Approximately $2.5 million of the cost reduction is
directly related to reducing the operating costs of the Owings Mills facility
related to the continued development and production of the EarthShell Big
Mac<SUP>&#174;</SUP> sandwich container, and approximately $0.8 million from a
reduction in other research and development efforts, and approximately $1.0
million of the decrease results from a non-recuring abandonment charge taken
during the six months ended June 30, 2000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Total General and
Administrative Expenses </I></B><I></I>Total general and administrative expenses
increased $1.8 million to $6.1 million from $4.3 million for the six months
ended June 30, 2001 compared to the six months ended June 30, 2000,
respectively, and increased $1.6 million to $3.9 million from $2.3 million for
the three months ended June 30, 2001 compared to June 30, 2000, respectively.
Approximately $0.7 million of the increase is a non cash charge relating to
various issuance of stock grants during the quarter ended June 30, 2001.
Approximately $0.3 million of the increase results from re-classification to
general and administrative expense of certain personnel changes related to
technical personnel, and $0.6 million of the increase from legal expense
related to the settlement of the lawsuit with Novamont, and the direct
management of the patent portfolio effective January 1, 2001.
</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Depreciation and
Amortization Expense</I></B><I> </I>Depreciation and amortization expense
decreased $0.4 million to $2.5 million from $2.9 million for the six months
ended June 30, 2001 compared with the six months ended June 30, 2000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Related Party Patent
Expenses</I></B><I> </I>Legal fees reimbursed to EKI under the Amended and
Restated Agreement for Allocation of Patent Costs with EKI decreased $0.3
million to $0 million from $0.3 million for the six months ended June 30, 2001
compared with the six months ended June 30, 2000. Beginning January 1, 2001 the
Company assumed direct responsibility for managing and paying for the
maintenance of the patent portfolio underlying the license with EKI, and
accordingly these costs are now being recorded within general and
administrative expense for the Company. Legal fees for patent expense are no
longer reimbursed to EKI as they were in fiscal periods prior to 2001. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Interest Income</I>
</B>Interest Income decreased $0.6 million to $0.2 million from $0.8 million for
the six months ended June 30, 2001 compared to the six months ended June 30,
2000 due to reduced cash balances on hand. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Net
Loss</I></B><I></I> The Company&#146;s net loss decreased $2.5 million to $17.5
million from $20.0 million for the six months ended June 30, 2001 compared to
the six months ended June 30, 2000, and decreased $1.5 million to $9.4 million
from $10.9 million for the three months ended June 30, 2001 compared to the
three months ended June 30, 2000 as a result of the foregoing factors. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Liquidity and
Capital Resources at June 30, 2001</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Cash Flow</I></B><I>
</I>The Company&#146;s principal use of cash for the six months ended June 30,
2001 was to fund operations, including the continued development and purchase of
equipment to facilitate the development of manufacturing capacity for EARTHSHELL
Products. Net cash used in operations was $16.3 million for the six months ended
June 30, 2001 down from $18.9 million for the six months ended June 30, 2000. Net cash
(used in) and provided by investing activities was ($1.6) million and $5.2
million for the six months ended June 30, 2001 and 2000, respectively. Net cash
provided by financing activities was $14.9 million and $3.6 million for the six
months ended June 30, 2001 and 2000, respectively. As of June 30, 2001 the
Company had cash totaling $4.8 million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Capital
Requirements</I></B><I> </I>The Company expects to spend approximately $10.0
million in capital expenditures in the year 2001 related to developing the
manufacturing facilities and prototypes for the line of EarthShell Products. The
Company paid or accrued approximately $1.6 million in capital expenditures for
the first six months ended June 30, 2001. The Company spent approximately $6.6
million in capital expenditures for the year ended December 31, 2000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Sources of
Capital</I></B><I></I> As part of the Company&#146;s initial public offering on
March 27, 1998, the Company issued 10,526,316 shares of common stock, for which
it received net proceeds of $206 million. The Company has signed an agreement
with Acqua Wellington North American Equities Fund, LTD (&#147;Acqua
Wellington&#148;), pursuant to which the Company may, from time to time and in
its sole discretion present Acqua Wellington with draw-down notices requiring
Acqua Wellington to purchase up to $2,500,000 of the Company&#146;s common
stock in respect of each draw-down notice. The Company
issues and sells the shares to Acqua Wellington at a per share price equal to
the average price of the Company&#146;s common stock over a period of time after
the draw-down notice less a discount of 5%. In addition, the agreement gives
Acqua Wellington the option to purchase an additional $2.5 million of the
Company&#146;s common stock per month, subject to certain conditions. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The common stock
purchase agreement with Acqua Wellington provides that the Company generally may
not request draw-downs unless the Company&#146;s common stock is trading at $3.00 per
share or more. As an alternative, Acqua Wellington has purchased and
continues to purchase shares from the Company from time-to-time at negotiated
prices. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During the six months ended
June 30, 2001 the Company issued approximately 7.1 million shares of common
stock to Acqua Wellington and received net proceeds from such issuance of
approximately $14.9 million. As of June 30, 2001 up to $35.0 million remains
available to the Company under the equity drawn-down facility with Acqua
Wellington, with $17.5 million available at the Company's request, and
$17.5 million at Acqua Wellington's option. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As the Company accomplishes
its core goals, it continues discussions with certain financing institutions
to secure additional sources of long term funding. The Company believes that
its existing cash, the financing provided through the Acqua Wellington equity
draw-down facility, as well as new sources,  will enable it to continue funding
its operations, including the Owings Mills facility, as well as continue with
its next generation development of EarthShell Products over the remainder of
the fiscal year. The Company cannot assure, however, that commitments can be
obtained on favorable terms, if at all. </FONT></P>


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 3.
Quantitative and Qualitative Disclosures About Market Risk</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Not applicable</FONT></p>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I>Part II. Other Information
</I></FONT></P>


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 1. Legal
Proceedings</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On August 2, 1999, Novamont
S.p.A., an Italian company specializing in the manufacture of a biodegradable
plastic resin and products, filed a complaint in the United States District
Court for the Northern District of Illinois alleging four counts of infringement
of three patents. On August 3, 2001 the Company entered into a Settlement
Agreement with Novamont wherein the lawsuit by Novamont was dismissed with no
material adverse financial effect on the Company, and the Company's rights to
manufacture and distribute the foodservice disposable through its operating
partners are fully protected and expanded to include the application of
Novamont technology. </FONT></P>


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 2. Changes
in Securities</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Not Applicable
</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Item 3.
Defaults Upon Senior Securities
</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Not applicable
</FONT></p>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Item 4.  Submission of Matters to a Vote of Security Holders
</FONT></H2>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Annual Meeting of Stockholders of the Company was held on May 8th, 2001, at which time
 Essam Khashoggi, Simon K. Hodson, John Daoud, Layla Khashoggi, Howard J. Marsh, Lynn Scarlett, Michael S. Noling
were elected as the Board of Directors.</FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 5. Other
Information</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Not applicable</FONT></p>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 6.
Exhibits and Reports on Form 8-K
</FONT></H2>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
10.48&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Settlement Agreement with Novamont dated August 3, 2001<br>
10.49&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amendment to Common Stock Purchase Agreement dated March 28, 2001
</font></p>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Company filed no reports on Form 8-K during the quarter ended June 30, 2001.
</FONT></p>

<PAGE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><i>
Signature
</i></FONT></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 thereunto duly
authorized. </FONT></P>

<PRE>
                                            EarthShell Corporation


Date: August 14, 2001                       By:    /s/ D. SCOTT HOUSTON
                                                 --------------------------------------
                                                  D. Scott Houston
                                                  <i>Chief Financial Officer</i>

                                                  <i>(Principal Financial and Accounting Officer
                                                  and Duly Authorized Officer)</i>

</PRE>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A4
<SEQUENCE>3
<FILENAME>f99-1.htm
<DESCRIPTION>SETTLEMENT AGREEMENT
<TEXT>

<HTML>
<head>
<title>
Exhibit 99
</title></head>
<body>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
SHEPPARD, MULLIN, RICHTER &amp;and HAMPTON LLP
<br>
Don T. Hibner (SBN # 33444)<br>
333 South Hope Street, 48th Floor<br>
Los Angeles, CA  90071-1448<br>
Telephone:  (213) 620-1780<br>
Fax:  (213) 620-1398<br><br>

JENNER &amp; BLOCK, LLC<br>
Donald R. Harris<br>
Daniel J. Hurtado<br>
One IBM Plaza<br>
Chicago, IL  60611-09350<br>
Telephone:  (312) 222-9350<br>
Fax:  (312) 840-7645<br><br>

Attorneys for Plaintiff<br>
NOVAMONT S.p.A.<br><br><br>
</font></p>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED
STATES DISTRICT COURT<br>FOR THE
CENTRAL DISTRICT OF CALIFORNIA</FONT></H1>

<PRE>


NOVAMONT S.p.A.,                            )       Case No. CV-00-3759 MRP
                                            )
                           Plaintiff,       )       Judge Mariana R. Pfaelzer
         v.                                 )
                                            )       <b>STIPULATION FOR DISMISSAL</b>
EARTHSHELL CORPORATION,                     )       <b>WITH PREJUDICE OF</b>
                                            )       <b>COMPLIANT AND</b>
                           Defendant        )       <b>COUNTERCLIAMS</b>
                                            )
                                            )
                                            )

</PRE>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
accordance with Rule 41(a) and (c) of the Federal Rules of Civil Procedure,
plaintiff Novamont S.p.A. (&#147;Novamont&#148;) and defendant EarthShell
Corporation (&#147;EarthShell&#148;), by and through their attorneys, hereby
stipulate as follows: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp;&nbsp;
All claims,  affirmative  defenses and counterclaims in the above-captioned  matter have
been voluntarily settled by the parties.
</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2.&nbsp;&nbsp;&nbsp;
Accordingly, the parties agree that all counts of Novamont&#146;s Complaint
against EarthShell in the above-captioned matter shall be dismissed in their
entirety with prejudice. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
3.
&nbsp;&nbsp;&nbsp;
The parties further agree that all of EarthShell&#146;s affirmative defenses and
all counts of EarthShell&#146;s Amended Counterclaim against Novamont in the
above-captioned matter shall be dismissed in their entirety without prejudice. </FONT></P>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.
&nbsp;&nbsp;&nbsp;
Novamont and EarthShell each shall bear their own attorneys&#146; fees and costs
with respect to the foregoing dismissed counts, affirmative defenses and
counterclaims. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.
&nbsp;&nbsp;&nbsp;
This stipulation may be executed in counterparts,  each of which,  when combined,  shall
constitute one and the same instrument.
</FONT></P>


<PRE>
Dated:  <u>August 1, 2001</u>            JENNER &amp; BLOCK, LLC
                                         SHEPPARD, MULLIN, RICHTER &amp; HAMPTON LLP


                                          /s/ DONALD R. HARRIS
                                          _____________________________
                                          Donald R. Harris
                                          Attorneys for Plaintiff
                                          Novamont S.p.A.



Dated: <u>July 27, 2001</u>              WORKMAN, NYDEGGER &amp; SEELEY
                                          MORRISON &amp; FOERSTER LLP


                                           /s/ LARRY R. LAYCOCK
                                           _____________________________
                                           Larry R. Laycock
                                           Attorneys for Defendant
                                           EarthShell Corporation


IT IS SO ORDERED:



Dated: <u>            </u>                       _____________________________
                                           The Honorable Mariana R. Pfaelzer
                                           United States District Judge


</PRE>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>f99-2.htm
<DESCRIPTION>ACQUA WELLINGTON
<TEXT>


<HTML>
<head>
<title>
Exhibit 99
</title></head>
<body>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT
</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT (this &#147;Amendment&#148;)
is dated as of March 28, 2001 by and between Earthshell Corporation, a Delaware
corporation (the &#147;Company&#148;) and Acqua Wellington North American
Equities Fund, Ltd., a company organized under the laws of the Commonwealth of
The Bahamas (the &#147;Purchaser&#148;).
 </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
         WHEREAS, the Company and the Purchaser are parties to a Common Stock Purchase Agreement dated as of May
3, 2000 (the "Agreement"); and</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and the Purchaser have mutually determined and agreed to make
certain changes to the terms and provisions of the Agreement and to evidence
such changes by execution of this Amendment. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
         NOW, THEREFORE, BE IT RESOLVED, the parties hereto agree as follows:</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       Section 1.1 (1) of the Agreement is hereby amended by deleting the section in its entirety and
                  substituting in lieu thereof the following Section 1.1 (1):
</font></p>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;1.1
(1) &#147;<U>Registration Statement&#148;</U> shall mean the registration
statement on Form S-3, Commission File 333-33752 and 333-52256 under the
Securities Act, filed with the Securities and Exchange Commission registration
of Shares, as such Registration Statement may be amended from time to
time.&#148;</FONT></p>


<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
       Section 7.1 of the Agreement is hereby amended by deleting the section in its entirety and substituting
                  in lieu thereof the following Section 7.1:</font></p>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                  "7.1 Termination by Mutual Consent. The term of this Agreement shall be twenty-seven (27)
                  months from the Closing Date. This agreement may be terminated at any time by mutual consent of
                  the parties."
</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
         3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
         In all other respects, the terms and provisions of the Agreement are hereby ratified and
confirmed in all respects and shall continue in full force and effect throughout the extended term of the
Agreement.
</font></p>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized officers as of the date first above
written. </FONT></P>

<PRE>
                            EARTHSHELL CORPORATION

                                 /s/ D. SCOTT HOUSTON
                            By:  ____________________________
                                     Name: D. Scott Houston
                                     Title: Chief Financial Officer

                            ACQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.

                                  /s/ RICHARD COLPRON
                            By:  _____________________________
                                     Name: Richard Colpron
                                     Title:Vice President
</PRE>

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</SUBMISSION>
