GSPI Stockholders
Green Star Products, Inc.
USA & Abroad

Re: Company Operations & 2006 Stockholder’s Meeting

Friday June 2, 2006

Dear Shareholder,

The GSPI Shareholder’s Meeting will be held on July 15th at the Las Vegas Hilton at 10:00 AM. In order to accommodate proper seating arrangements at the Shareholder’s Meeting, we request that all those shareholders that plan to attend notify us by email at info@GreenStarUSA.com.

We welcome all GSPI's shareholders to attend and vote at the 2006 Shareholder’s Meeting. This Shareholder’s Letter will be posted on our Website and we will have a press release asking our shareholders to please review this letter on our Website. Only those shareholders as of record on May 8th, 2006 will be eligible to vote at the 2006 Shareholder’s Meeting.

GSPI not soliciting any proxy votes. If you wish to vote, and cannot attend the shareholders meeting or just want to receive news releases by the company please send GSPI your email address at info@GreenStarUSA.com; or call (619) 864-4010 or fax (619) 789-4743 and send us your fax number; or mail us your request at Green Star Products, 858 Third Avenue 455, Chula Vista, CA 91911 and we will send you a voting form and instructions.

As President of GSPI, let me first thank all of you for being shareholders in our Company and for supporting the Company’s vision and mission over the years. As most of you know, our vision and mission has been based on two main objectives: First is to improve our environment and to participate in creating a sustainable future for us, our children and our children's children; and second, by so doing create a profitable Company for our stockholders. Until recently, these two objectives were very difficult to achieve simultaneously.

For those shareholders and many other informed people, who have been reading my editorials and press releases these past few years, all will note that most of the predictions that have been made in the 1990s have now come to fruition. In the past seven years your Company has positioned itself to become a major player in the alternative fuels business.

Five years ago, when Green Star Products, Inc (GSPI) built its first pilot plant in Adelanto near Victorville, California most Americans including our President, US Congressmen and State Politicians were not well informed about biodiesel.

Over the past five years, GSPI has become well know as a leader in the Biodiesel Industry. GSPI personnel built the first, proprietary – patent pending - “Continuous Flow Biodiesel Production Process” in the United States, which also utilized a step that eliminated the use of water in the biodiesel cleaning process. To translate quickly what this means, the GSPI “Continuous Flow Waterless Biodiesel Production System” can be built quickly and efficiently. Other biodiesel production systems require 14 to 18 months to complete a production facility - while the GSPI facility only requires 14 to 18 weeks for a turn key operation to be built. In addition, the “cost factor per gallon installed” relative to the construction of each of these plants is dramatically different.

Our plants only require approximately 40% of the capital costs of other plants. Surveys have shown an installed cost factor in the range between $.80 cents per gallon to a high of $1.25 per installed gallon for conventional biodiesel plants worldwide. The above factors are not the only advantages of the “continuous flow process.” Other advantages include up to 80% less land required to build the plant, extremely low expenses of operations and trained personnel required to run the automation of the plant. Our plants require 30 to 40% less energy (increased efficiency) to run motors and pumps. The entire biodiesel plant has an enclosed piping system where other plants have open vats, which require air quality permits. Other plants require large amounts of water to cleanup the biodiesel in its final process. Our company uses a proprietary, waterless process, which requires no water in the cleanup.

To sum up all of the above advantages and how they affect a variety of industry factors lets point out “one item” that addresses all of the above factors. As we all know, California is the most difficult state in the union to procure any licenses especially involving air quality issues, water usage and water discharge. It is estimated that a regular biodiesel plant built by others (according to the survey) would require 12 to 18 months to secure the construction permits, which include air and water discharges.

On February 28th, 2006, we submitted our applications for all required permits to start construction of a new facility in California. We received the permits to construct in eight weeks! This is a huge accomplishment on any level. This package of permits can now be used in other cities, towns and states across the United States where the local people who have the jurisdiction are not familiar with biodiesel processing systems. Therefore, extensive research by planning departments will not be necessary as they will probably accept this “permit package from California” as being the standard for the industry. We have already made use of this strategy concerning our next two plants, which are to be built in the States of North Carolina and Idaho.

As your President, I personally answer over 100 calls per week from our stockholders and apologize to other shareholders who have left messages that I haven’t been able to return. Some of you are long-term shareholders and have very specific questions and some of you are new shareholders that ask more general questions.

Therefore, for the sake of clarity and disclosure I will attempt to cover the present status of Green Star Products, Inc. and answer the most frequently asked questions by shareholders old and new.

Q: Why has the trading price of GSPI been so low for so long if we have all this advanced technology?

A: It is an accepted fact in the industry of high tech companies it can often take as much as 10 to 15 years to bring their technology to commercially viable market levels. For example, a company like Ballard Power Systems (founded in 1979) was backed by 750 million dollars of Research & Development monies from various automakers (including Chrysler and Ford Motor Company for hydrogen cell research), which began its research back in 1992, has yet to turn their first year of profits. This delay in profitability is predominating across the spectrum of research and development companies in the U.S. and worldwide. This is even more accentuated in the case of GSPI because we were waiting for an industry to develop (biodiesel) which barely existed seven years ago. Our long-term shareholders will remember a stockholders meeting in Chula Vista in 1998 where 500 shareholders crowded a hotel ballroom. At that time we outlined the “biodiesel story” in great detail and stated how the development and use of alternative fuels would become important as a sustainable source of fuels to complement the extension of our natural resources and have the United States become less reliant on foreign oil. Not only were we correct in foreseeing the future, we now have designed and built proprietary technologies to make a worldwide difference in processing and manufacturing these alternative fuels! For the past seven years your company has been positioning itself to be a leader in the renewable fuels industry.

Q: Why did the price of GSPI stock go up after all these years even after the American Bio-Fuels production facility in Bakersfield, California, was lost in a tragic fire on February 17th 2006?

A: As you know, GSPI has an equity interest (35%) in American Bio-Fuels, LLC. GSPI assisted in the funding of building and operating the plant in Bakersfield. This plant operated successfully for over two years with the most advanced technology in the industry. The fire that destroyed the plant was caused by an incident outside the building and had nothing to do with plant operation. At the time of the fire, we had just completed an expansion of the Bakersfield facility to a 10 million gallon per year capacity. We were in the process of fulfilling a 100,000-gallon order to be delivered to the Long Beach Port for the Royal Caribbean Cruise Line. The fire, disclosed in our immediate press release as well as local and state media, destroyed the plant. The plant (made up of mainly stainless steel reactors, separators, tanks, iron etc.) was uninsured at the time because of the difficulty in finding an insurance carrier that would underwrite a new facility of this kind. However, the steel and iron elements in the plant were not our greatest assets in the plant. Our greatest asset was and is the fact that we had proven over a two-year period that our operating, proprietary technology not only worked, it was and is regarded as the finest in the industry. With this proven technology as our real asset, we now have the ability to reconstruct and build the new generation of our state-of-the art biodiesel plants.

Within days of the plant’s fire, we received many phone calls from around the world asking if we could build similar plants as a joint venture partner for different corporations. Obviously with the reputation have we earned, many felt that since we had lost our own plant we would be in a situation to consider other options. With GSPI’s equity in the developed and proven technology to produce these plants quickly and inexpensively, partial equity and participation in gross profits was offered to turn key build and operate these plants at cost. As a result this strategy has now become the backbone of our company and why our stock has advanced so quickly since that time.

Q: Why did we not have insurance to cover the Bakersfield plant? (Partially explained above).

A: The biodiesel industry is a new industry to all the insurance companies. They have no history and they cannot calculate their exposure. We were diligently pursuing insurance on the Bakersfield plant for a long time. Four days after the fire, we received a proposal, which could have insured the plant for only $300,000! For a plant that was worth several millions of dollars, this insurance would probably have been taken. Since early February of this year, dramatic things have happened throughout the industry and throughout the world that have accelerated the interest in biodiesel and alternate fuels including the fact that crude oil has gone up to record prices. All insurance companies can now see this field as a viable, expanding industry, which will be seen as a new frontier for profit making in their business. Based on the insurance industry's newly expanded awareness of the value of biodiesel, all of GSPI's new plants will have adequate insurance coverage.

Q: What is biodiesel?

A: We have attached an information package, which will answer in detail questions regarding the biodiesel industry and how it will affect the future of the United States and the World. We also have attached two of our latest press releases dated May 15 and May 4, 2006, which clearly outline the enormous interest generated by the President of the United States (which he covered in his State of the Union Address), Congress and other entities throughout the world. Your company, GSPI, is engaged in an industry that no longer requires a marketing tool. In the U.S., States like Minnesota, Oregon, Pennsylvania, California, and 17 others, either mandate now or have pending legislation for the use of biodiesel (including all military bases).

Also, many governments throughout the world, with the European Union in the lead, are mandating biodiesel usage from B2 (2%) to B5.7 (5.7%). No one can build alternative fuel plants quickly enough to satisfy market demand. As in any business, the first question to be asked, “Is there a short-term, medium-term and long-term market for our product?” The answer is Yes! Yes! and Yes! Our marketing teams are clearly now the US and Governments of the World!

Q: Is the GSPI technology a proven technology or a developing technology?

A: American Bio-Fuels, LLC (ABF), GSPI's partner, has had EPA approval since 2001 and has also been a member of the National Biodiesel Board since that time.

Also in 2001 ABF entered into a contract with the U. S. Department of Energy through its Bio Energy Program that pays cash incentives for each gallon of biodiesel fuel produced. In 2004, ABF received $314,000 as incentives on a per gallon basis for its production that year and the company was listed in the USDA Program as the 7th largest producer in the US and the largest producer on the West Coast. The USDA Bio Energy incentive program also audits the production of biodiesel from the plant with on site inspections insuring that the quality of the biodiesel produced is ASTM D6751 grade biodiesel. For the past 3½ years the Bakersfield plant has proven that the technology works by receiving significant payments from the USDA Bio Energy Program for its successful production.

Q: Where are the updated financials for GSPI?

A: GSPI has filed its certified financial statements with Standard & Poors since 1992 through 2003. Filing with Standard & Poors provides GSPI with an exemption to trade its public stock in 32 states. We are not required to file with the SEC because we are traded on the pink sheets and GSPI is only required to file its certified financials once per year within six months of its year end. However, we are slightly behind on finishing our financials because, as many of you know, the accounting procedures have become immensely more complex over the last two years due to the Sarbanes Oxley Act. This Act has affected thousands of companies throughout the industry and requires immense increases in accounting budgets. The fall out from the passage of this Act has Accounting Firms expanding their personnel to accommodate this new volume of requirements. There are currently over 2,000 companies, which are late in producing their financials on Wall Street. I can assure you that we are diligently working to get our financials up to date and they should be available in late July.

I believe that this is an appropriate time to discuss our financial status over the past couple of years so that everyone can have a clear understanding of the parameters involved and the financial status of GSPI. The Company has approximately 10,000 stockholders and there are presently 300,000,000 issued and outstanding shares in GSPI.

Individuals of significant status own most of the large stockholder blocks. These shareholders include environmentalists that have been with our company for a long time and have supported our environmentally friendly vision and mission. The list of names includes wealthy families in Texas, Assemblymen, University PhDs, and Hollywood Stars, many recognizable if named. I can only suggest that having these people as our stockholders makes our shareholder base very stable.

Green Star Products, Inc. has many intangible assets that show up either as a footnote in our financial statements or are not given any value whatsoever. However, these intangible assets do have real value reviewed by the financial community.

These include an $8,000,000 dollar carry forward tax loss for the Company, which insures that tax on future profits can be written off against this tax loss.

GSPI has an excellent reputation across the states as well as abroad. We have spent years creating what the industry would call ‘goodwill’ or ‘name recognition’, which is worth a lot to most companies. The names American Bio-Fuels, LLC and Green Star Products, Inc. are known throughout the world including many provinces of China and India. Name recognition and goodwill are both valuable assets, which present accounting procedures do not assess. Another area that has been given no recognizable value in our financial statement is the development of our technical expertise and licenses. Green Star Products has created the ability to build multiple biodiesel plants simultaneously in record time and at the lowest cost in the industry. In today’s alternative fuel marketplace, this is an asset that the Wall Streets of the world will appreciate in their due diligence process.

Other financial stats on GSPI include: In 2004, GSPI's gross income was nil. In 2005, GSPI's gross income was $800,000. The stockholders equity for both of these years was a negative value or less than one-cent per share. For each of these years, we show a loss of less than one-cent per share.

Our partner, American Bio-Fuels, LLC has shown loses for both of these years. A 35% portion of these losses will also be shown on our financial statements.

GSPI owns a 35% LLC equity interest in American Bio-Fuels (ABF). ABF secured an exclusive U.S. license for the "Continuous Flow Process" in 2002 from Bio-Clean Fuels, Inc (BCF). This exclusive license expired in February 2006. GSPI's personnel managed the construction and operation of the Bakersfield Plant for over three years. GSPI has now secured the license to the U.S. for the "Continuous Flow Process" under a royalty agreement with BCF. This royalty obligation will be passed on to GSPI's forthcoming joint venture partnerships in each of the plants built and operated by GSPI and will not affect GSPI’s interests in the project.

GSPI has outstanding loans owed to them from American Bio-Fuels for both years approaching $800,000. In 2006, due to the Bakersfield plant fire, GSPI will take a write off of the entire amount that is owed to Green Star by American Bio-Fuels.

GSPI still owes the IRS approximately $200,000 in back-taxes stemming from an item from 1993. Given the related details GSPI does not see this as a particularly detrimental item in our balance statement.

There are no pending lawsuits against the company.

GSPI is an emerging company that has gone through a transition period from Research & Development to Production & Revenue.

We are now estimating that the gross income for GSPI for 2006 will exceed $3,000,000 and will show some profits for this year. Our new plants have great profit potential and will go on-line towards the end of 2006 and in 2007.

Q: Is the company in financial difficulty?

A: The answer is No. Our long-term debt, which is approximately $700,000 has been renewed and is stable. Joint venture partners are funding the new plants that GSPI is building. In these agreements, though each one differs accordingly, GSPI’s direct costs are covered on a real time basis and GSPI will participate in some form of the profits in these facilities on an ongoing basis. This includes operating or management of the operations in each of these facilities, all of which means continued income for the company. After the completion of the first two proposed plants, GSPI will no longer have to obtain external funding.

Q: Is GSPI going to reverse-split its stock?

A: No! GSPI has had hundreds of offers to reverse-split the stock and redistribute the stock to raise funds for the company. If we do this, I guarantee that all of us will suffer a significant dilution. In 1994, I promised all of our stockholders and have continued to keep that promise, that we will not reverse-split the stock.

Q: Are you going to ask for an increase in the Treasury Shares of the company?

A: Yes! At the Shareholders Meeting on July 15, 2006, I will be asking the stockholders to vote to increase the treasury shares from 300 million to 400 million. In the past I have received numerous phone calls from stockholders saying that we are diluting the company by issuing these shares. The same stockholders have asked “Why not take these extra shares and distribute them as a stock dividend to existing shareholders?” Let me be clear about this. Issuing shares of the treasury as a dividend to existing shareholders, with no additional assets in the company, is a dilution of the company. However, taking some of these shares to purchase assets or make other transactions to acquire additional assets will enhance the worth of the Company adding value to each share owned. This is not a dilution. I am asking each and every shareholder, who has supported me and GSPI for 12 years in bringing this company from its infancy to being a world leader, to continue to support GSPI in voting an increase in the treasury stock.

The mid-term and long-term plans of GSPI are to acquire through our joint venture relationships stock in other companies. We have done so in the past. Sometime in the near future, the strategy of the company will include taking the shares of other companies stock and redistribute it to our shareholders as dividends.

We will not dilute our stock – instead we will distribute to our shareholders shares of stock acquired as equity in other companies. This is truly a unique way to compensate our shareholders with a proposed value added reward.

Q: There is so much talk about alternate fuels these days that it appears as though our Lubrications Division, TVT 24-7, does not receive appropriate attention.

A: Our Lubricant Division is flourishing. GSPI has come a long way with our advanced lubrications and its day has finally arrived! When reviewing the status of our Lubrications Division, all of the market factors that we stated for biodiesel are just reversed. In this division, we need a marketing team, which until recently we did not have. What we did have was a variety of products that were not just 10% better than the rest of the industry they were orders of magnitude better than the rest of the industry. GSPI was one of the few companies that were manufacturing our products in the U.S. and sending and selling them to China. We have been doing this for 5 years. The TVT brand name is well known in China.

Now we have coupled our product with an aggressive marketing team from NRG Resources as stated in a press release dated November 2, 2005. Under the umbrella of NRG and Green Star Products, our new product name is now TVT 24-7 and it's gaining an enormous amount of attention throughout the world. The product line has expanded from 2 products to 8 products. The NRG team has people around the world selling and demonstrating our new product line.

Our products are now showing up in truck stops across the US Interstate Highway System and in machine shops nationwide especially in Detroit, Michigan. Several of the larger auto manufactures as well as some of the largest retail chains in the United States have shown interest in our products. We believe that this division will have a banner year in 2006. Our arrangements with NRG include GSPI being responsible for production of the product in bulk form. Therefore GSPI is responsible for keeping our formulas secret and secure and NRG is responsible for packaging the products in whatever format necessary and distribution throughout the world. GSPI receives all product costs upfront and shares in 25% distribution of profits on the marketing side. GSPI requires no additional capital to perform its function and is operating in a secure, modern plant located in Chula Vista, California.

In conclusion, your company, Green Star Products, Inc., after 12 years has made a dramatic turnaround. The remainder of 2006 and especially next year appear to be extremely promising both in the alternative fuel industry and with the TVT 24-7 product line. We have, through our corporate strategy, advanced in both of these arenas and will continue to grow based on the technology and engineering expertise that your company has developed over the past 12 years.

I have diligently tried to outline both the financial status of our company and its future in two distinct industries. I hope that I have gained your confidence over the years and ask you to re-elect myself as President and Gerardo Gomez as Secretary & Treasurer of GSPI. I also ask you to come and meet other members of GSPI’s Team (including our Field Engineers, Construction Engineers and Research & Development Team) who have worked so hard in the field building and creating the biodiesel plants and other research facilities in past years. They will all be in attendance at our Shareholders Meeting on July 15th, 2006.

Please send GSPI your email address (to info@GreenStarUSA.com) or fax number (to 619-789-4743 fax) to receive future information on GSPI and voting instructions and forms.

Thank you again for your support of our vision and mission for the future and hope to see you at the Shareholder’s Meeting.

Sincerely,

Joseph P. LaStella, P.E., President
Green Star Products, Inc.

Management comments and notes to the financial statement contain forward-looking statements that should not be used to make an investment decision. Please refer to the financial statements, our web site (www.GreenStarUSA.com) and other sources for more detailed Company information (Investor Relations, 619-864-4010)