UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q/A

T
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:   March 31, 2008

£
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________________ to ________________


SYNTEC BIOFUEL INC.
(Exact name of registrant as specified in its charter)


Washington
 
333-47514
 
91-2031335
(State or other jurisdiction of incorporation or organization)
 
(Commission File Number)
 
(IRS Employer Identification No.)

Suite 206 - 388 Drake Street
Vancouver, British Columbia, Canada
 
V6B 6A8
(Address of principal executive offices)
 
(Zip Code)


Registrant’s telephone number
(including area code)
 
(604) 648-2090

     
(Former name, former address and former fiscal year, if changed since last report)
 
(Zip Code)


Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes
T
No
£

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer
£
Accelerated Filer
£
Non Accelerated Filer
£
Smaller Reporting Company
T

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes
£
No
T
 
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant filed all documents and reports required to filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court.
Yes
£
No
T


APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares of common stock outstanding as of April 30, 2008 was 33,194,079.


The purpose of this amendment is to:

1.  amend the second paragraph of Part I, Item 4. CONTROLS AND PROCEDURES (found on page 16 of the Company’s form 10-Q as originally filed) to correct the period referred to therein from December 31, 2007 to March 31, 2008).

2.  Exhibits 31.1 and 31.2 have been amended to conform to the currently required language for these exhibits.  The amended exhibits are filed herewith as Exhibits 31.1/A and 31.2/A.

In all other respects this amended Form 10-Q for the period ending March 31. 2008 is the same as the originally filed Form 10-Q.  The form is included in its entirety in this filing for convenience of reference.
 

SYN TEC BIOFUEL INC.
(A Development Stage Company)

FORM 10-Q


 

PART I – FINANCIALS INFORMATION

It em 1. FINANCIAL STATEMENTS




SYNTEC BIOFUEL INC.

(A Development Stage Company)

INTERIM FINANCIAL STATEMENTS

March 31, 2008

Unaudited
 

SYNTEC BIOFUEL INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS

ASSETS
 
March 31
   
December 31
 
   
2008
   
2007
 
   
(Unaudited)
       
Current
           
Cash and cash equivalents
  $ 223,493     $ 509,504  
Receivables
    5,998       6,250  
Prepaid
    -       31,092  
      229,491       546,846  
                 
Equipment (Note 4)
    231,493       226,484  
Intellectual property (Note 3)
    5,100,000       5,100,000  
Intangible assets (Note 3)
    20,000       20,000  
                 
    $ 5,580,984     $ 5,893,330  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
 
                 
Current
               
Accounts payable and accrued liabilities
  $ 35,020     $ 24,314  
Due to related party (Note 5)
    8,664       24,438  
Notes payable (Note 6)
    325,805       315,012  
                 
      369,489       363,764  
                 
Commitments and Contingencies (Notes 2, 3 and 6)
 
                 
Preferred stock:
               
Authorized: 20,000,000 with a par value of $0.0001
               
Issued and outstanding: None
    -       -  
Common stock: (Note 7)
               
Authorized: 100,000,000 with a par value of $0.0001
               
Issued and outstanding: 33,194,079 ( December 31, 2007: 32,972,629)
    3,319       3,297  
Additional paid-in capital
    6,328,543       6,277,410  
Accumulated other comprehensive income (loss)
    (7,395 )     2,059  
Deficit accumulated during the development stage
    (1,112,972 )     (753,200 )
                 
      5,211,495       (5,529,566 )
                 
    $ 5,580,984     $ 5,893,330  


SEE ACCOMPANYING NOTES


SYNTEC BIOFUEL INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited

               
March 15,
 
               
2000
 
               
(Date of
 
   
Three months ended
   
Inception) to
 
   
March 31,
   
March 31,
 
   
2008
   
2007
   
2008
 
                   
Revenue
  $ -     $ -     $ -  
                         
Expenses
                       
Consulting fees (Note 5)
    31,949       7,950       238,991  
Depreciation
    12,398       180       25,159  
Development fees (Note 3)
    138,447       -       229,683  
Filing fees
    2,149       1,047       33,294  
Financing charge
    2,706       -       13,330  
Interest expenses
    8,228       2,070       41,693  
Management fees (Note 5)
    110,353       18,600       237,266  
Marketing
    4,548       -       43,694  
Office and miscellaneous
    38,635       75       99,692  
Professional fees
    11,913       12,350       124,670  
Rights and licenses costs
    -       -       25,015  
Wages
    4,260       -       4,260  
Write-down of website
    -       -       5,000  
                         
      (365,586 )     (42,272 )     (1,121,747 )
                         
Other income
    5,814       -       8,775  
                         
Net loss
  $ (359,772 )   $ (42,272 )   $ (1,112,972 )
                         
Basic and diluted loss per share
  $ (0.01 )   $ (0.01 )        
                         
Weighted average shares outstanding – basic and diluted
    33,056,761       17,101,671          
                         
                         
Comprehensive loss
                       
Net loss
  $ (359,772 )   $ (42,272 )   $ (1,112,972 )
Foreign currency translation adjustment
    (9,454 )     -       (7,395 )
Total comprehensive loss
  $ (369,226 )   $ (42,272 )   $ (1,120,367 )
 
 
SYNTEC BIOFUEL INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited

               
March 15,
 
               
2000
 
   
Three months ended
   
(Inception) to
 
   
March 31,
   
March 31,
 
   
2008
   
2007
   
2008
 
Cash flows from operating activities
                 
Net loss
  $ (359,772 )   $ (42,272 )   $ (1,112,972 )
Adjustments to reconcile net loss to net cash used in operating activities:
                       
Depreciation
    12,398       180       25,159  
Finance charges
    2,706       -       13,330  
Accrued interest on notes payable
    8,087       2,070       42,747  
Legal and organizational expenses
    -       -       8,000  
Rights and licenses costs
    -       -       24,751  
Share subscriptions receivable
    -       -       575  
Write-down of website
    -       -       5,000  
Changes in operating assets and liabilities:
                       
Receivables
    252       -       (5,998 )
Prepaids
    31,092       (5,398 )     -  
Accounts payable and accrued liabilities
    10,706       7,446       35,018  
Amounts due to related parties
    (15,774 )     1,087       8,664  
                         
Net cash used in operating activities
    (310,305 )     (36,887 )     (955,726 )
                         
Cash flows from investing activities
                       
Investment in property and equipment
    (17,407 )     -       (21,652 )
Repayment of debt assumed
    -       -       (350,000 )
Rights and licenses
    -       -       (1 )
Website cost
    -       -       (5,000 )
                         
Net cash used in investing activities
    (17,407 )     -       (376,653 )
                         
Cash flows from financing activities
                       
Common stock issued for cash
    51,155       -       1,277,767  
Proceeds from notes payable
    -       40,000       285,500  
                         
Net cash provided by financing activities
    51,155       40,000       1,563,267  
                         
Effect of exchange rates on cash
    (9,454 )     -       (7,395 )
                         
Change in cash and cash equivalents
    (286,011 )     3,113       223,493  
                         
Cash and cash equivalents, beginning
    509,504       15,356       -  
                         
Cash and cash equivalents, ending
  $ 223,493     $ 18,469     $ 223,493  
Supplemental cash flow information (Note 8)


SYNTEC BIOFUEL INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY )
Unaudited

                           
Deficit
       
                     
Accumulated
   
Accumulated
       
               
Additional
   
Other
   
During the
       
   
Common Stock
   
Paid-in
   
Comprehensive
   
Development
       
   
Number
   
Par Value
   
Capital
   
Income (Loss)
   
Stage
   
Total
 
Balance, March 15, 2000
    –     $ –     $ –     $ –     $ –     $ –  
Stock issued for legal and organizational expenses at a  fair market value of $0.005 per share
    1,600,000       160       7,840       –       –       8,000  
Stock issued for acquisition of a license at a fair market value of $0.005 per share
    7,000,000       700       34,300       –       –       35,000  
Dividend deemed paid
    –       –       (10,250 )     –       –       (10,250 )
Net loss for the period
    –       –       –       –       (32,750 )     (32,750 )
Balance, December 31, 2000
    8,600,000       860       31,890       –       (32,750 )     –  
Net loss for the year
    –       –       –       –       (500 )     (500 )
Balance, December 31, 2001
    8,600,000       860       31,890       –       (33,250 )     (500 )
Net loss for the year
    –       –       –       –       (1,857 )     (1,857 )
Balance, December 31, 2002
    8,600,000       860       31,890       –       (35,107 )     (2,357 )
Net loss for the year
    –       –       –       –       (6,529 )     (6,529 )
Balance, December 31, 2003
    8,600,000       860       31,890       –       (41,636 )     (8,886 )
Stock issued as a private placement at a fair market value of $0.0125 per share
    8,474,000       848       105,077       –       –       105,925  
Net loss for the year
    –       –       –       –       (20,074 )     (20,074 )
Balance, December 31, 2004
    17,074,000       1,708       136,967       –       (61,710 )     76,965  
Stock issued as a private placement for a fair market value of $0.0125 per share
    26,000       2       323       –       –       325  
Stock issuance cost
    –       –       (5,313 )     –       –       (5,313 )
Foreign currency translation adjustment
    –       –       –       610       –       610  
Net loss for the year
    –       –       –       –       (51,014 )     (51,014 )
Balance, December 31, 2005
    17,100,000       1,710       131,977       610       (112,724 )     21,573  
Stock issued as a private placement at a fair value of $0.50 per share
    2,500       –       1,250       –       –       1,250  
Foreign currency translation adjustment
    –       –       –       (539 )     –       (539 )
Net loss for the year
    –       –       –       –       (191,081 )     (191,081 )
Balance, December 31, 2006
    17,102,500       1,710       133,227       71       (303,805 )     (168,797 )
Foreign currency translation adjustment
    –       –       –       1,988       –       1,988  
Discount on notes payable
    –       –       15,770       –       –       15,770  
Stock issued for assumption of assets at fair market value of $0.4550 per share
    11,000,000       1,100       5,003,900       –       –       5,005,000  
Stock issued as a private placement at a fair value of $0.231 per share
    4,870,129       487       1,124,513       –       –       1,125,000  
Net loss for the year
    –       –       –       –       (449,395 )     (449,395 )
 
 
SYNTEC BIOFUEL INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
Unaudited - cont’d

                           
Deficit
       
                     
Accumulated
   
Accumulated
       
               
Additional
   
Other
   
During the
       
   
Common Stock
   
Paid-in
   
Comprehensive
   
Development
       
   
Number
   
Par Value
   
Capital
   
Income (Loss)
   
Stage
   
Total
 
Balance, December 31, 2007
    32,972,629       3,297       6,277,410       2,059       (753,200 )     5,529,566  
Foreign currency translation adjustment
    –       –       –       (9,454 )     –       (9,454 )
Stock issued as a private placement at a fair value of $0.231 per share
    221,450       22       51,133       –       –       51,155  
Net loss for the period
    –       –       –       –       (359,772 )     (359,772 )
Balance, March 31, 2008
    33,194,079     $ 3,319     $ 6,328,543     $ ( 7,395 )   $ (1,112,972 )   $ 5,211,495  
 

SYNTEC BIOFUEL INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2008
Unaudited

Note 1
Basis of Presentation

The foregoing unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. The accompanying unaudited financial statements and related notes should be read in conjunction with the audited financial statements and the Form 10-KSB of the Company for the year ended December 31, 2007. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

Note 2
Nature and Continuance of Operations

Syntec Biofuel Inc. (the “Company”) was incorporated in the State of Washington on March 15, 2000. The Company was involved in selling and marketing high-quality vitamins and homeopathic supplements under the label of ‘VitaBeast Foods’. Due to the lack of success in competing with established pet providers, the VitaBeast operations were discontinued on December 31, 2007.

On April 7, 2006, the Company entered into a purchase and assignment agreement (the “Purchase Agreement”) with Syntec Biofuel Inc. ("Syntec Canada"), a Canadian company located in Burnaby, British Columbia, Canada, to acquire all of its assets including the intellectual property relating to the development of a catalyst that would convert biomass waste material into ethanol. The Purchase Agreement was subject to the Company raising a minimum of $500,000 prior to September 12, 2006 or the ownership of assets would be assigned back to Syntec Canada. At the Annual General Meeting on July 13, 2006, the shareholders of the Company ratified the Purchase Agreement and the decision to change the Company’s name to Syntec Biofuel Inc. from NetCo Investments Inc. effective July 27, 2006. On September 12, 2006, the Company was unable to raise the required minimum amount of capital and the pending transaction with Syntec Canada was terminated.

On September 28, 2007, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Montilla Capital Inc. (“Montilla”), a private company that acquired the assets of Syntec Canada, to acquire co-ownership of certain intellectual property, in order to continue the original business plan. The intellectual property relates to the development of a method of producing catalysts and processes that converts biomass waste material into ethanol. The agreement closed on October 24, 2007. See Note 3.


SYNTEC BIOFUEL INC.
(FORMERLY NETCO INVESTMENTS INC.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2008
Unaudited

Note 3
Acquisition of assets

Pursuant to the Asset Purchase Agreement, the Company issued 11,000,000 common shares to Montilla at a fair value of $0.455 per share, for total consideration of $5,005,000, in exchange for co-ownership of certain intellectual property, acquisition of the assets and assumption of the liabilities of Montilla, of $350,000.  

This sale was subject to the Company raising a minimum of $500,000 by December 31, 2007 which was completed in fiscal 2007.

Consideration
     
11,000,000 common shares at a fair value of $0.455
  $ 5,005,000  
Debt assumed
    350,000  
         
    $ 5,355,000  
         
Assets Acquired
       
Office equipment
  $ 15,000  
Laboratory equipment
    220,000  
Intangible assets
    20,000  
Intellectual property
    5,100,000  
         
    $ 5,355,000  

Intangible assets include the business name of “SyntecBiofuel” and the URL of www.syntecbiofuel.com which the Company acquired from Montilla under the Asset Purchase Agreement.

Concurrent with the Asset Purchase Agreement, the Company entered into a development service agreement (the “Service Agreement”) on September 28, 2007 with Syntec Biofuel Research Inc. (“Syntec Biofuel Research”), a company located in British Columbia, Canada. Syntec Biofuel Research will provide certain services related to the ongoing research and development of the catalysts acquired under the Asset Purchase Agreement. In exchange, the Company will pay Syntec Biofuel Research on a cost plus 5% basis. Syntec Biofuel Research will also apply for a Scientific Research and Experimental Development Credit, which is a refundable tax credit based on annual rates prescribed by the Canadian Income Tax Act.

The Service Agreement will be for an initial term of two years commencing September 28, 2007 and automatically renew for one additional year unless terminated in writing at least 60 days prior to the end of the term. As at March 31, 2008, the Company paid Syntec Biofuel Research $100,028 (March 31, 2007 - $nil) for development fees which have been recorded on the statements of operations pursuant to SFAS No. 2, “Accounting for Research and Development Costs.”


SYNTEC BIOFUEL INC.
(FORMERLY NETCO INVESTMENTS INC.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2008
Unaudited

Note 4
Equipment

   
Cost
   
Accumulated
Amortization
   
March 31, 2008
Net
   
December 31, 2007
Net
 
Computer equipment
  $ 7,448     $ 1,352     $ 6,096     $ 3,234  
Office equipment
    15,504       1,528       13,976       14,250  
Laboratory equipment
    233,700       22,279       211,421       209,000  
                                 
    $ 256,652     $ 25,159     $ 231,493     $ 226,484  

Note 5
Related Party Transactions

The Company incurred the following expenses charged by related companies and the directors of the Company:

         
March 15, 2000
 
   
Three Month ended
   
(Inception) to
 
   
March 31,
   
March 31,
 
   
2008
   
2007
   
2008
 
Consulting fees
  $ 19,659     $ -     $ 135,997  
Management fees
    110,353       18,600       237,266  
Share issuance cost
    -       -       5,313  
Website cost
    -       -       5,000  
                         
    $ 130,012     $ 18,600     $ 383,576  

As at March 31, 2008, an amount of $8,664 (December 31, 2007 – $24,438) is owing to an officer of the Company. The amount owed to an officer of the Company at March 31, 2008 is unsecured, non-interest bearing and have no set terms of repayment.

Note 6
Notes payable

On August 31, 2006, the Company entered into an assignment agreement with Iris International Holdings Limited ("Iris") whereby the Company assigned to Iris $94,461 of its promissory notes and $14,039 of loans made to Syntec Canada in exchange to reduce the debt due by the Company to Iris from $250,000 to $141,500. Promissory notes owed to Iris were as follows:

 
a)
On May 25, 2006, the Company received a loan of $100,000 from Iris. The promissory note was unsecured and bearing interest at 5% per annum. On August 31, 2006, the assignment agreement reduced this loan to $nil.

 
b)
On July 26, 2006, the Company received a loan of $65,000 from Iris. The promissory note is unsecured and bears interest at 5% per annum. Repayment of the principal and accrued interest is extended and payable by the Company on December 31, 2007. On August 31, 2006, the assignment agreement reduced this loan to $56,500.


SYNTEC BIOFUEL INC.
(FORMERLY NETCO INVESTMENTS INC.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2008
Unaudited

Note 6
Notes payable (cont’d)

 
c)
On September 28, 2006, the Company received a loan of $85,000 from Iris. The promissory note is unsecured, bears interest at 5% per annum. Repayment of the principal and accrued interest is extended payable by the Company on December 31, 2007.

During fiscal 2007, Iris extended the due date of these loans from December 31, 2007 until June 30, 2008 with extension fees of 10% of the capital debt. In the event the Company is unable to repay the outstanding principal balances on these loans upon maturity, Iris has the option to demand payment in common shares of the Company at the market price.

Included in the notes payable balance at March 31, 2008 is accrued interest and extension fees of $26,710 (December 31, 2007 - $24,946) relating to loans owing to Iris.

As of March 31, 2008, the Company had received loans totaling $144,000 (December 31, 2007 - $144,000) from Hokley Limited (“Hokley”) as follows:

 
a)
On August 4, 2004, the Company received $4,000 from Hokley. The promissory note is unsecured, bears interest at 8% per annum and carries a loan fee equal to 10% of the principal balance. Repayment of the principal, accrued interest and loan fee is payable by the Company on June 30, 2008.

 
b)
On September 24, 2004, the Company received $5,000 from Hokley. The promissory note is unsecured, bears interest at 10% per annum and carries a loan fee equal to 10% of the principal balance. Repayment of the principal, accrued interest and loan fee is payable by the Company on June 30, 2008.

 
c)
On December 23, 2004, the Company received $5,000 from Hokley. The promissory note is unsecured, bears interest at 10% per annum and carries a loan fee of 10%. Repayment of the principal, accrued interest and loan fee is payable by the Company on June 30, 2008.

 
d)
On February 26, 2007, the Company received $40,000 from Hokley. The promissory note is unsecured and bears interest at 5% per annum. Repayment of the principal and accrued interest is payable by the Company on August 31, 2008.

 
e)
On May 28, 2007, the Company received $30,000 from Hokley. The promissory note is unsecured and bears interest at 5% per annum. Repayment of the principal and accrued interest is payable by the Company on May 28, 2008.

 
f)
On July 18, 2007, the Company received $30,000 from Hokley. The promissory note is unsecured and bears interest at 5% per annum. Repayment of the principal, accrued interest and loan fee is payable by the Company on July 18, 2008.

 
g)
On September 26, 2007, the Company received $30,000 from Hokley. The promissory note is unsecured and bears interest at 10% per annum. Repayment of the principal, accrued interest and loan fee is payable by the Company on September 26, 2008.


SYNTEC BIOFUEL INC.
(FORMERLY NETCO INVESTMENTS INC.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2008
Unaudited

Note 6
Notes payable (cont’d)

Pursuant to SFAS No. 157, Fair Value Measurements, management has recognized that the interest rate on the notes payable from Hokley (“Notes”) is below fair market value, and has recorded a discount on the funds received from Hokley during fiscal 2007 of $15,770. This value was recorded as additional paid-in capital and is being deferred and amortized over the term of the notes. During the three months ended March 31, 2008, $2,706 (March 31, 2007 - $nil) was accreted to Notes and expensed as finance charges. The carrying value of the Notes at March 31, 2008 of $ 141,560 (December 31, 2007 – $138,854) will be accreted to the face value over the term of the Notes.

Included in the notes payable balance at March 31, 2008 is accrued interest and loan fees of $16,035 (December 31, 2007 - $9,712) relating to the loans owing to Hokley.

Note 7
Common stock

Pursuant to the Asset Purchase Agreement with Montilla (Note 3), the Company entered into a common shares subscription agreement on October 1, 2007 to offer up to a maximum of 13,000,000 and a minimum total of 2,174,000 common shares at $0.231 per share. During the period ended March 31, 2008, the Company issued 221,450 common shares at $0.231 for total proceeds of $51,155.

Note 8
Supplemental cash flow information

               
March 15, 2000
 
               
(Date of
 
   
Three month ended
   
Inception)
 
   
March 31,
   
March 31,
 
   
2008
   
2007
   
2008
 
Cash paid for:
                 
Income taxes
  $ -     $ -     $ -  
                         
Interest
  $ -     $ -     $ -  
                         
Non-cash investing activity:
                       
A total of 11,00,000 common shares were issued to Montilla at a fair value of $0.455 per share, for total consideration of $5,005,000, pursuant to the Asset Purchase Agreement (Note 3)
  $ -     $ -     $ 5,005,000  
Non-cash financing activities:
                       
A total of 1,600,000 common shares were issued to a company controlled by a director at a fair value of $0.005 per share for legal and organizational expenses paid
  $ -     $ -     $ 8,000  
A total of 7,000,000 common shares were issued at fair value of $0.005 per share for the acquisition of a license from a company controlled by a director.
  $ -     $ -     $ 35,000  
 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Syntec Biofuel Inc., a company organized under the laws of Washington the Company, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; competition; success of operating initiatives; our ability to raise capital and the terms thereof; changes in business strategy or development plans; future rental revenues; the continuity, experience and quality of our management; changes in or failure to comply with government regulations or the lack of government authorization to continue our projects; and other factors referenced in the Form 10-Q.

The use in this Form 10-Q of such words as "believes", "plans", "anticipates", "expects", "intends", and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. The success of the Company is dependent on our efforts, the employees and many other factors including, primarily, our ability to raise additional capital.

We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made.  Such forward-looking statements are based on the beliefs and estimates of our management as well as on assumptions made by and information currently available to us at the time such statements were made.  Forward looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward looking statements, including, without limitation, the failure to obtain adequate financing on a timely basis and other risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements, either as a result of the matters set forth or incorporated in this Report generally and certain economic and business factors, some of which may be beyond our control.


It em 2. MANAGEMENTS’ DISCUSSION AND ANLAYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

PLAN OF OPERATIONS

We discontinued our VitaBeast operations as of December 31, 2007 due to the lack of success in competing with established pet providers.  In 2007, the Company successfully acquired the laboratory assets and the Intellectual Property for the catalyst that is able to convert synthetic gas into ethanol.

The Company has been continuing to improve the performance of the catalyst and the yield that has been achieved by the laboratory is now 105 gallons of alcohol per ton of biomass which makes the process economically viable.   The Company has also begun working on the design of the entire biomass to alcohol (B2A) process in order to pursue construction of a demonstration plant.

We have not currently generated any revenue from operations and do not expect to report any significant revenue from operations until research and development efforts mature. Even after the completion of a demonstration plant, there can be no assurance that we will generate positive cash flow and there can be no assurances as to the level of revenues, if any, that we may actually achieve from the B2A technology.

Since inception, we have funded operations through common stock issuances, related and non-related party loans in order to meet our strategic objectives.  However, there can be no assurance that we will be able to obtain further funds to continue with our efforts to establish a new business.

We expect to continue to incur substantial losses in our efforts to establish a new business. We are a development stage company. In a development stage company, management devotes most of its activities to establishing a new business. As of March 31, 2008, we had a working capital deficit of $122,665. We are in immediate need of further working capital and are considering options with respect to financing in the form of debt, equity or a combination thereof.


RESULTS OF OPERATIONS – THREE MONTHS ENDING MARCH 31, 2008

The Company had no revenue for the three months ended March 31, 2008 and 2007. The total expenses increased significantly from $42,272 in 2007 as compared to $365,586 in 2008. In 2008, the Company incurred consultant and management fees of $142,302 as compared to $26,550 in 2007 as additional consultants hired for the new development. The development fees increased from $nil in 2007 to $138,447 in 2008 because of higher research and development expenses. The increase of office and miscellaneous expenses from $75 in 2007 to $38,635 in 2008 is mainly due to higher traveling, conferences and trade show expenses and regulatory filings. Our net loss per share is at $0.01 for 2008 and 2007.


FINANCIAL CONDITION AND LIQUIDITY

Our cash position was $223,493 at March 31, 2008 and was $509,504 at December 31, 2007.

Our working capital deficit at March 31, 2008 was $139,998 as compared to 183,082 at December 31, 2007.

The Company's ability to continue as a going concern and fund operations through the remainder of 2008 is contingent upon its ability to raise funds through equity or debt financing.

The Company has arranged loans from third party lenders in order to fund the on going operations of the business. These loans have been secured by way of Promissory Notes.


CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements which requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions by us, which have a material impact on our financial condition and results.  Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of our financial statements.  Our critical accounting policies include debt management and accounting for stock-based compensation.  We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities".


Item 3 . QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


It em 4. CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
 
 
There are controls and procedures that are designed to ensure that information required to be disclosed by Syntec Biofuel Inc. in the reports it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by Syntec Biofuel Inc. in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
 
 
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, Syntec Biofuel, Inc. has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31,2008, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.
 
 
Changes in Internal Control over Financial Reporting
 
During the three months ended March 31, 2008, management took steps to improve the internal controls over financial reporting by (1) searching for outside directors to establish an effective audit committee, (2) utilizing existing office staff in order to remedy the segregation of duties deficiencies, (3) writing accounting and financial reporting procedures to comply with the requirements of US GAAP and SEC disclosures, and (4) following the newly written accounting and financial reporting procedures in (3) which tightens the control over the period ends.
 
Management and directors will continue to monitor and  evaluate  the  effectiveness  of our  internal controls and procedures and our internal controls over financial reporting on an ongoing  basis and are  committed  to taking  further  action  and  implementing additional enhancements or improvements, as necessary and as funds allow.
 

PART II – OTHER INFORMATION

I tem 1. LEGAL PROCEEDINGS

None.

Item 2 . UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Previously disclosed on an 8K filed on February 29, 2008.

Item 3 . DEFAULT UPON SENIOR SECURITIES

None.

Item 4 . SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

Item 5 . OTHER INFORMATION

None.

Item 6. EXHIBITS

Exhibit Number
Description
99*
Written consent of Shareholders filed on 8K on January 10, 2008
2.1*
Amendment to Asset purchase agreement filed on 8K/A on March 31, 2008
31.1*
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1*
Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
*   previously filed with SEC
 
 
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 thereunto duly authorized.

SYNTEC BIOFUEL INC.
(Registrant)

/s/Michael Jackson
 
Date: October 20, 2008
Michael Jackson
Director, CEO
   
     
     
/s/ Janet Cheng
 
Date: October 20, 2008
Janet Cheng
Director, CFO
   
 
 
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