- Annual Report (10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

T ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2008

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

For the transition period from__________________________________to______________________________

Commission file number: 000-51932

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

Washington		91-2031335
(State or other jurisdiction of incorporation or organization)		(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

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

£ Yes T No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

£ Yes T No

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange Act from their obligations under those Sections.

Indicate by check mark whether the registrant (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. T Yes £ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. £

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 £ (Do not check if a smaller reporting company)	Smaller reporting company T

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

The aggregate value of the issuer’s common stock held by non-affiliates (assuming that the issuer’s only affiliates are its’ directors, officers and 10% or greater stockholders) of the issuer as of December 31, 2008 was $4,458,616.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable Date: December 31, 2008 – 33,194,079

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Form 10-K under "Item 1. Business", "Item 2. Properties", "Item 3. Legal Proceedings", and "Item 7. Management's Discussions and Analysis of Financial Condition and Results of Operations" and elsewhere constitute "forward-looking statements" are 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-K.

The use in this Form 10-K 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 for operations and to build a pilot or demonstration plant, inability of achieving commercialization of the catalysts, inability to obtain sustainable feedstock at an economical price 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.

We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

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PART I

Item 1. Business

General

Syntec Biofuel Inc. (“Syntec”) is now consistently achieving yields in excess of 110 gpt, making the Syntec Catalysts an economically viable method of producing ethanol, methanol, propanol and butanol from waste cellulosic biomass. We have estimated that by selling licenses, we expect to generate revenue of approximately $6 million per year from 2012.

We are proposing to raise $1.6 million as working capital to improve productivity of our catalyst and continue development to achieve commercialization.

We expect to build a Pilot Plant within the next 12 months (with Department of Energy assisted Funding) in either Oregon or Alaska (where there is an abundance of feedstock) and anticipate the first Corporate plant will likely be built in the Pacific Northwest to take advantage of readily available low-cost organic waste, an abundant source of wood and the generous State Government funding programs that are available. This would give Syntec a demonstrable competitive advantage over other cellulose-to-ethanol technologies (e.g., Iogen) that cannot use softwood as a feedstock source at present and needs different enzymes for different feedstock species.

Syntec has incorporated a wholly owned subsidiary to start working in parallel on developing a catalytic process to produce bio-butanol from Municipal Solid Waste and other waste biomass. Butanol or Butyl alcohol is a four carbon alcohol which can be used as a fuel. This biofuel can be made by fermentation or synthesized from syngas. We will undertake research in all areas of manufacturing Butanol and Propanol with our emphasis on catalysts.

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 and completed the demonstration plant. 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 Syntec 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 commercialize our technology

We expect to continue to incur substantial losses in our efforts to establish a viable business. We are a development stage company. In a development stage company, management devotes most of its activities to establishing a viable business. As of December 31, 2008, we had a working capital deficit of $984,400. 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.

Principal Products

Syntec’s process is a biomass-to-alcohol (“B2A”) conversion path quite similar to modern day methanol or gas-to-liquid production processes used commercially by companies such as Methanex, Shell, and Sasol. The key differentiating factors are the feedstocks, catalysts and operating parameters.

There are 3 basic steps in the B2A process:

production of syngas (CO, H2) either through the gasification of biomass feedstock, or through steam reforming/partial oxidation of biogas or landfill gas,

ii.

conversion of syngas to bio-alcohols over Syntec catalyst in a fixed bed reaction unit,

iii.

separation and purification of bio-alcohols (high purity) to ethanol, methanol, n-propanol and n-butanol.

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The B2A process has the potential to revolutionize the ethanol industry with higher ethanol yields and lower production costs per ton of feedstock than any other ethanol production path in commercial use today. Furthermore, it is anticipated that the B2A process will enable the conventional ethanol industry to also use these well established chemical processes to obtain production and efficiency metrics beyond what traditional grain based fermentation processes can offer.

Perhaps the most important aspect of the Syntec Process is the ability to convert abundant, low cost waste products into ethanol and bio-alcohols without harming the agricultural land base or competing with consumable food stocks. Moreover, enough biomass exists and is renewed every year in North America, and other parts of the world, to significantly reduce a country’s dependence on imported oil required for petroleum derived fuels.

Utilization of Syntec’s proprietary Ethanol catalyst enables the B2A process to produce a mixed product of methanol, ethanol, propanol and butanol. Syntec’s proposed butanol catalyst will utilize the B2A process with the newly developed catalyst to produce bio-butanol.

The Company plans on selling licenses and entering joint venture partnerships using the B2A process so it can generate revenue from licensing fees, royalty fees, joint venture profit participation, sale of turnkey facilities and commission on the sale of catalysts.

Source and Availability of Raw Materials

Raw materials and components for the current research and development phase of operations are generally available in the market.

Upon commercialization, raw materials for Syntec’s B2A process will be readily available due to the ability to utilize waste feedstocks such as mill residues, forest residues, agricultural residues and MSW.

Intellectual Property

The Company owns the patent “Catalysts and processes for the manufacture of lower aliphatic alcohols from syngas” (patent number 7,384,987) which was approved on the 10 th of June, 2008. A second Patent was applied for in July, 2008 and is now pending. The Company considers the combination of the Syntec catalyst and the B2A process to be unique which differentiates the Company from its competitors.

Competitive Analysis

Ethanol is currently produced primarily via a dry milling fermentation process of food chain feedstock such as corn, sugar cane, wheat or barley. This process is well developed but remains subject to a number of negative externalities, including increase in food costs, using farmland for transport purposes rather than food production, water issues, net energy values and high cost volatility associated with grain feedstock usage.

Competitive research is currently being undertaken with catalytic synthesis (using various metals, slurry bed reactors or significantly higher pressure), enzymatic fermentation (which uses enzymes to break down bio-waste), dilute acid hydrolysis fermentation and concentrated acid hydrolysis fermentation. Each of the fermentation methods requires considerable energy and time to produce alcohols, affecting the production volumes and economic viability. In addition, fermentation technologies are sensitive to feedstock variations. Slurry bed reactors require higher capital outlays and have higher operating costs than conventional fixed bed reactors.

We do not believe that any ethanol producing method will prevail, to the exclusion of others, as every ethanol producer, whether from biogas, biomass, corn and/or sugar is vital to achieve the mandated ethanol requirements to reduce consumers’ dependence on oil. We do however believe that our process is the best solution as it is less disruptive, has a lower cost, is less destructive to the environment, produces greater green gas reduction and does not require valuable farmland to produce.

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Low pressure catalytic synthesis has been used for methanol production for many decades, and the Company is focusing on using similar methodology to produce ethanol, methanol and other higher order alcohols such as butanol which has even greater value. Once optimized, the Company believes that a fundamental shift will occur in the ethanol production industry away from fermentation and toward thermo-chemical processes.

Research and Development

The primary focus of the Company is research and development of the B2A process and the Syntec catalysts since the acquisition of the intellectual property on September 28, 2007. The Company has spent $91,236 in 2007 and $343,715 in 2008 in continued research and development.

Number of Employees

The Company has no Employees other than the Directors.

Reports to Securities Holders

We are subject to disclosure filing requirements including filing a Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required.

The public may read and copy any materials that we file with the Securities and Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

We provide an annual report that includes our audited financial information to our shareholders upon written request. We also make our financial information equally available to any interested parties or investors through compliance with the disclosure rules of the Securities Exchange Act of 1934. More information about the Company can be found at www.syntecbiofuel.com .

Item 1A. Risk Factors

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.

Item 1B. Unresolved Staff Comments

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.

Item 2. Properties

At present, in order to reduce overhead expenses, the Company does not maintain a physical office in the United States. Our current administrative facility is located at Suite 206, 388 Drake Street, Vancouver, British Columbia, Canada.

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Item 3. Legal Proceedings

We may from time to time be involved in various claims, lawsuits, disputes with third parties, actions involving allegations of discrimination, or breach of contract actions incidental to the operation of its’ business. We currently are not involved in any such litigation.

Item 4. Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of our security holders during the fourth quarter of the fiscal year ended December 31, 2008.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The Company’s stock is traded on the over-the-counter bulletin board under the symbol, SYBF. The following table sets forth for the periods indicated, the range of high and low bid prices for the Company’s Common Stock:

Quarter Ended	High Price	Low Price
March 31 2007	0.510	0.100
June 30 2007	0.400	0.050
September 2007	0.510	0.080
December 2007	0.800	0.200
March 31 2008	1.250	0.630
June 30 2008	1.150	0.700
September 2008	1.010	0.600
December 2008	0.750	0.200

The over-the-counter quotations reflect inter-dealer prices, with retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders

As of December 31, 2008, we had 67 shareholders of record of common stock, including shares held by brokerage clearing houses, depositories or otherwise in unregistered form.

Dividends

We have not declared any cash dividends with respect to our common stock and do not intend to declare dividends in the foreseeable future. There are no material restrictions or limiting that is likely to limit the Company’s ability to pay dividends in its common stock.

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Securities Authorized For Issuance Under Equity Compensation Plans

Set forth below is information related to the securities we sold during the last fiscal year ended December 31 2008, without registration under the Securities Act of 1933, as amended.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	N/A	N/A	N/A
Equity compensation plans not approved by security holders	N/A	N/A	N/A
Total	N/A	N/A	N/A

Repurchase of Common Shares

During the year ended December 31, 2008, we did not purchase any of our common stock shares.

Item 6. Selected Financial Data.

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.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the audited financial statements and notes thereto appearing elsewhere in this annual report on Form 10-K.

Plan of Operations

The following discussion contains certain forward-looking statements that are subject to business and economic risks and uncertainties, and our actual results could differ materially from those forward-looking statements. The following discussion regarding our financial statements should be read in conjunction with the financial statements and notes thereto.

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 and we have completed a demonstration plant. 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 Syntec technology.

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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 December 31, 2008, we had a working capital deficit of $984,400. 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.

Liquidity and Capital Resources

Our cash position is $1,419 as of December 31, 2008 and was $509,504 at December 31, 2007.

Our primary source of funds since incorporation has been through the issue of our common stock, the proceeds of the initial public offering and loans to us by related parties and third parties.

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.

Results of Continuing Operations

Twelve Months Ended December 31, 2008 and 2007

The Company had no revenue for the year ended December 31, 2008 and 2007. Expenses increased significantly from $452,356 in 2007 as compared to $1,307,689 in 2008. In 2008, the Company incurred consultant and management fees of $375,863 as compared to $207,983 in 2007 as additional consultants hired for the new development. The interest fees were $46,604 in 2008 as compared to $26,618 in 2007 for increasing loans for operations. Furthermore, the development fees increased from $91,236 in 2007 to $343,715 in 2008 as more office staffs were hired and research and development expenses were charged. The net loss for 2008 was $1,301,740 as compared to $449,395 in 2007. Our net loss per share is at $0.04 for 2008 and $0.02 for 2007.

Critical Accounting Policies

The discussions and analysis of our financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon the financial statements, which have been prepared in accordance with US GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Management re-evaluates its estimates and judgments on an ongoing basis particularly those related to the determination of the impairment of its intangible assets. Actual results could differ from the estimates. We believe the following are the critical accounting policies used in the preparation of the financial statements.

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".

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New Accounting Standards

In April 2008, the Financial Accounting Standards Board (“FASB”) issued Staff Position No. 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP No. 142-3”) . FSP No. 142-3 amends the factors to be considered in assumptions used to determine the useful lives of recognized intangible assets recognized under SFAS No. 142. The new guidance applies to intangible assets with contractual lives that are acquired individually or with a group of assets as well as those assets acquired in a business combination. The new guidance is effective for fiscal years beginning after December 15, 2008 and interim periods. The Company will adopt the statement on January 1, 2009 which is the beginning of its 2009 fiscal year. Management is in the process of evaluating the impact FSP No. 142-3 will have on the Company’s consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the Public Company Accounting Oversight Board’s (“PCAOB”) amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time. Management is in the process of evaluating the impact SFAS No. 162 will have on the Company’s consolidated financial statements.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time. Management is in the process of evaluating the impact SFAS No. 163 will have on the Company’s consolidated financial statements.

Item 7A. 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.

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Item 8. Financial Statements and Supplementary Data.

SYNTEC BIOFUEL INC.

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008 and 2007

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Syntec Biofuel Inc.

We have audited the accompanying consolidated balance sheets of Syntec Biofuel Inc., a development stage company, as of December 31, 2008 and 2007 and the consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Syntec Biofuel Inc. as of December 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in this regard are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DMCL

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

February 20, 2009

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SYNTEC BIOFUEL INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

ASSETS	December 31,			December 31,
	2008			2007

Current Assets
Cash	$	1,419		$	509,504
Receivables		23,283			6,250
Prepaids		-			31,092

		24,702			546,846

Equipment (Note 4)		254,839			226,484

Intellectual property (Note 3)		5,100,000			5,100,000
Intangible assets (Note 3)		20,000			20,000

	$	5,399,541		$	5,893,330

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable and accrued liabilities	$	193,324		$	24,314
Current portion of obligation under capital lease (Note 4)		16,411			-
Due to related parties (Note 5)		561,209			190,884
Notes payable (Note 6)		238,158			148,566

		1,009,102			363,764

Obligation under capital lease (Note 4)		9,175			-

		1,018,277			363,764

Commitments and Contingencies (Notes 1,3,4,5 and 6)
Subsequent events (Note 10)

Preferred stock:
Authorized: 20,000,000 with a par value of $0.0001
Issued and outstanding: None		-			-
Common stock:
Authorized: 100,000,000 with a par value of $0.0001
Issued and outstanding: 33,194,079 (December 31, 2007: 32,972,629) (Note 7)		3,319			3,297
Additional paid-in capital		6,328,543			6,277,410
Accumulated other comprehensive income		104,342			2,059
Deficit accumulated during the development stage		(2,054,940	)		(753,200	)

		4,381,264			5,529,566

	$	5,399,541		$	5,893,330

SEE ACCOMPANYING NOTES

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SYNTEC BIOFUEL INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

							March 15,
							2000
							(Date of
	Year ended						Inception) to
	December 31,						December 31,
	2008			2007			2008
							(unaudited)


Expenses
Consulting fees	$	44,216		$	132,455		$	251,258
Depreciation		56,553			12,338			69,314
Development fees (Note 3)		343,715			91,236			434,951
Filing fees		11,133			6,266			42,278
Financing charges		85,011			10,624			95,635
Foreign exchange Loss		60,947			-			60,947
Interest expense		46,604			26,618			80,069
Management fees (Note 5)		331,647			75,528			458,560
Marketing		13,968			13,398			53,114
Office and miscellaneous		38,908			10,081			65,944
Professional fees		176,273			39,791			289,030
Rent (Note 5)		22,514			5,582			28,096
Rights and licenses costs		-			-			25,015
Travel		76,200			28,439			104,639
Write-down of website		-			-			5,000

Loss from operations		(1,307,689	)		(452,356	)		(2,063,850	)

Other income		5,949			2,961			8,910

Net loss	$	(1,301,740	)	$	(449,395	)	$	(2,054,940	)

Basic and diluted loss per share	$	(0.04	)	$	(0.02	)
Weighted average shares outstanding – basic and diluted		33,097,807			20,894,470

Comprehensive loss
Net loss	$	(1,301,740	)	$	(449,395	)	$	(2,054,940	)
Foreign currency translation adjustment		102,283			1,988			104,342

Total comprehensive loss	$	(1,199,457	)	$	(447,407	)	$	(1,950,598	)

SEE ACCOMPANYING NOTES

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SYNTEC BIOFUEL INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

							March 15,
							2000
	Year ended						(Inception) to
	December 31,						December 31,
	2008			2007			2008
							(unaudited)
Cash flows from operating activities
Net loss	$	(1,301,740	)	$	(449,395	)	$	(2,054,940	)
Non-cash items:
Depreciation		56,553			12,338			69,314
Financing charges		32,600			1,400			34,000
Accrued interest on notes payable		7,512			8,312			15,824
Interest on capital lease obligation		1,637			-			1,637
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		(17,033	)		(6,250	)		(23,283	)
Prepaids		31,092			(31,092	)		-
Accounts payable and accrued liabilities		169,010			11,997			193,322
Amounts due to related parties		105,552			41,275			154,636

Net cash used in operating activities		(914,817	)		(411,415	)		(1,571,164	)

Cash flows from investing activities
Investment in equipment		(29,422	)		(1,425	)		(33,667	)
Repayment of debt assumed		-			(350,000	)		(350,000	)
Rights and licenses		-			-			(1	)
Website cost		-			-			(5,000	)

Net cash used in investing activities		(29,422	)		(351,425	)		(388,668	)

Cash flows from financing activities
Common stock issued for cash		51,155			1,125,000			1,277,767
Proceeds from notes payable		49,480			130,000			204,106
Payments under capital lease obligation		(31,537	)		-			(31,537	)
Proceeds from related parties		264,773			-			406,573

Net cash provided by financing activities		333,871			1,255,000			1,856,909

Effect of exchange rates on cash		102,283			1,988			104,342

Net increase (decrease) in cash		(508,085	)		494,148			1,419

Cash, beginning		509,504			15,356			-

Cash, ending	$	1,419		$	509,504		$	1,419

Supplemental cash flow information (Note 9)

SEE ACCOMPANYING NOTES

- 15 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

											Deficit
								Accumulated			Accumulated
					Additional			Other			During the
	Common Stock				Paid-in			Comprehensive			Development
	Number		Amount		Capital			Income (Loss)			Stage			Total
Balance, March 15, 2000		–	$	–	$	–		$	–		$	–		$	–
Stock issued for legal and organizational expenses at a fair market value of $0.01 per share		1,600,000		160		7,840			–			–			8,000
Stock issued for acquisition of a license at a fair market value of $0.01 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 $0.025 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 at $0.025 per share		26,000		2		323			–			–			325
Stock issuance cost		–		–		(5,313	)		–			–			(5,313	)
Unrealized gain on translation		–		–		–			610			–			610
Net loss for the year		–		–		–			–			(51,014	)		(51,014	)
Balance, December 31, 2005 (unaudited)		17,100,000		1,710		131,977			610			(112,724	)		21,573
Stock issued as a private placement at $1.00 per share		2,500		–		1,250			–			–			1,250
Unrealized gain on translation		–		–		–			(539	)		–			(539	)
Net loss for the year		–		–		–			–			(191,081	)		(109,081	)
Balance, December 31, 2006		17,102,500		1,710		133,227			71			(303,805	)		(168,797	)
Unrealized gain on translation		–		–		–			1,988			–			1,988
Discount on notes payable		–		–		15,770			-			–			15,770
Stock issued for assumption of assets at fair value of $0.4550 per share		11,000,000		1,100		5,003,900			–			–			5,005,000
Stock issued as a private placement at $0.231 per share		4,870,129		487		1,124,513			–			–			1,125,000
Net loss for the year		–		–		–			–			(449,395	)		(449,395	)
Balance, December 31, 2007		32,972,629		3,297		6,277,410			2,059			(753,200	)		5,529,566
Unrealized gain on translation		–		–		–			102,283			–			102,283
Stock issued as private placements at $0.231 per share		221,450		22		51,133			–			–			51,155
Net loss for the year		–		–		–			–			(1,301,740	)		(1,301,740	)
Balance, December 31, 2008		33,194,079	$	3,319	$	6,328,543		$	104,342		$	(2,054,940	)	$	4,381,264

SEE ACCOMPANYING NOTES

- 16 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 1

Nature and Continuance of Operations

Syntec Biofuel Inc. (the “Company”) was incorporated in the State of Washington on March 15, 2000. The Company is a development stage company as defined by Statement of Financial Accounting Standards (“SFAS”) No. 7, “Development Stage Enterprises.”

The Company, on April 7, 2006, 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 agreement was subsequently amended and the Company acquired 100% ownership interest in the intellectual property. The intellectual property relates to the development of a method of producing catalysts and processes that convert biomass waste material into ethanol (see Note 3).

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2008, the Company had not yet achieved profitable operations and has accumulated losses of $2,054,940 since its inception and has a working capital deficiency of $984,400. The continuing operations of the Company are dependent upon its ability to raise adequate financing to develop its catalyst technology for production. The Company intends to generate money from future production of ethanol, the sale and licensing of its intellectual property and raising funds from investors via equity. Management is aware that material uncertainties exist, related to current economic conditions, which could cast doubt about the entity’s ability to continue to finance its activities. It is to be expected that the Company may incur further losses in the development of its business, all of which casts reasonable doubt about the Company’s ability to continue as a going concern (see Note 10).

- 17 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 2

Summary of Significant Accounting Policies

Basis of Presentation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31.

Principles of Consolidation

These consolidated financial statements include the accounts of Syntec Biofuel Inc. and its wholly-owned Canadian subsidiary Syntec Biofuel Technologies Inc. which was incorporated under the laws of British Columbia, Canada on May 17, 2007. All significant inter-company balances and transactions have been eliminated upon consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make certain estimates and assumptions that affect the reported amounts and timing of revenues and expenses, the reported amounts and classification of assets and liabilities, and disclosure of contingent assets and liabilities. The Company’s actual results could vary materially from management’s estimates and assumptions. Significant areas requiring the use of management estimates relate to the determination of impairment of intangibles and long lived assets, expected tax rates for future income tax recoveries and determining the fair values of financial instruments.

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term investments with original maturities of less than three months and are presented at cost, which approximates market value.

Equipment and Depreciation

Equipment is recorded at cost. Depreciation is provided using the following methods and annual rates:

	Basis	Rate

Computer equipments	Straight-line and declining balance	20% to 30%
Office and laboratory equipments	Straight-line	20%
Equipment under capital lease	Straight-line	20%

Intangible Assets

The Company has adopted the provisions of SFAS No. 142, “Goodwill and Intangible Assets”. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are not amortized but are annually tested for impairment. The determination of any impairment includes a comparison of the estimated future operating cash flows anticipated during the remaining life for the net carrying value of the asset as well as a comparison of the fair value to the book value of the Company or the reporting unit to which the goodwill can be attributed.

- 18 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 2

Summary of Significant Accounting Policies (cont’d)

Long Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable at the end of each reporting period. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent of manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, management measures fair value based on quoted market prices or based on discounted estimates of future cash flows.

Foreign Currency Translation

The Company's functional currency is the Canadian dollar. The financial statements of the Company are translated to United States dollar equivalents in accordance with SFAS No. 52 , “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollar equivalents at rates of exchange in effect at the balance sheet date. Average rates for the year are used to translate revenues and expenses.

The cumulative translation adjustment is reported as a separate component of accumulated other comprehensive income, whereas gains and losses arising from foreign currency translations are included in results of operations.

Other Comprehensive Income

SFAS No. 130 “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. During the years ended December 31, 2008 and 2007, the only component of comprehensive income was foreign currency translation adjustments.

Government Grants

Income-related government grants are subsidies of research and development expenses. Income-related grants are credited to development expenses when it becomes probable that expenditures already incurred will constitute qualifying expenditures for purposes of reimbursement under the grants, which is typically substantially concurrent with the expenditures.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to SFAS No. 109 "Accounting for Income Taxes". Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

- 19 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 2

Summary of Significant Accounting Policies (cont’d)

Income Taxes (cont’d)

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”). Fin 48 became effective January 1, 2007 for the Company. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold that a tax position is required to meet before any part of the benefit of that position may be recognized in the financial statements. It also provides guidance on the measurement of the income tax benefit associated with uncertain tax positions, derecognition, classifications, interest and penalties, accounting in interim periods and disclosure. Additionally, in May 2007, the FASB published FASB Staff Position

No. FIN 48-1, “Definition of Settlement in FASB Interpretation No. 48” (“FSP FIN 48-1”). FSP FIN 48-1 is an amendment to FIN 48 and it clarifies how an enterprise should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. FSP FIN 48-1 was effective upon the initial adoption of FIN 48, and therefore was effective January 1, 2007. The adoption of FIN 48 and FSP FIN 48-1 has no material effect on the Company’s financial position, statements of operations, or cash flows at this time.

Basic and Diluted Loss Per Share

The Company reports basic loss per share in accordance with SFAS No. 128, “Earnings per Share”. Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were exercised or converted to common stock. The dilutive effect of options and warrants and their equivalent is computed by application of the treasury stock method and the effect of convertible securities by the “if converted” method. For the years presented, diluted loss per share is equal to basic loss per share as the effect of the computations is anti-dilutive.

Financial Instruments

The carrying value of the Company’s financial instruments, consisting of cash, receivables, accounts payable, obligations under capital lease, due to related parties and notes payable approximates their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

As of January 1, 2008, the Company adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. This statement permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reporting in earnings. SFAS No. 159 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

- 20 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 2

Summary of Significant Accounting Policies (cont’d)

Stock-based Compensation

The Company has adopted SFAS No. 123(R), “Share-Based Payment,” which requires the compensation cost related to share-based payments, such as stock options and employee stock purchase plans, be recognized in the financial statements based on the grant-date fair value of the award. As at December 31, 2008 and 2007, the Company has not adopted a stock option plan and has not granted any stock options. Accordingly, no stock-based compensation has been recorded to date.

Recent Accounting Pronouncements

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time. Management is in the process of evaluating the impact SFAS No. 163 will have on the Company’s consolidated financial statements.

- 21 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

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 $5,355,000, 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 during 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

Fair Value of Assets Acquired
Office equipment	$	15,000
Laboratory equipment		220,000
Intangible assets		20,000
Intellectual property		5,100,000

	$	5,355,000

Subsequently, the Asset Purchase Agreement with Montilla was amended to grant the Company 100% ownership of the intellectual property.

Concurrent with the Asset Purchase Agreement, the Company entered into a development service agreement (the “Service Agreement”) on November 1, 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 amount of refundable tax credit received by Syntec Biofuel Research will be assigned to the Company, less a 10% fee.

The Service Agreement will be for an initial term of two years commencing November 1, 2007 and automatically renew for one additional year unless terminated in writing at least 60 days prior to the end of the term. During the year ended December 31, 2008, the Company paid or accrued development fees to Syntec Biofuel Research for $395,783 (December 31, 2007 - $91,236) of which $115,501 (2007 – $NIL) has been refunded to the Company, as per the development tax credits received. These balances have been allocated to the statements of operations under development fees.

- 22 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 4

Equipment

	Cost		Accumulated Depreciation		December 31, 2008 Net Book Value		December 31, 2007 Net Book Value
Computer equipment	$	6,907	$	2,468	$	4,439	$	3,234
Office equipment		15,416		3,819		11,597		14,250
Laboratory equipment		245,395		50,981		194,414		209,000
Equipment under capital lease		55,486		11,097		44,389		-

	$	323,204	$	68,365	$	254,839	$	226,484

The Company leases laboratory equipment under capital lease that expires in fiscal 2010. At December 31, 2008, the Company has recorded the obligation under capital lease of $16,411 (December 31, 2007 - $NIL) as the current portion and $9,175 (December 31, 2007 - $NIL) as the long-term portion. Minimum lease payments under this agreement in future fiscal years are as follows:

Fiscal Year Ending December 31,	Lease Payments
2009	$	19,167
2010		9,583
Total minimum lease payments	$	28,750

Amount representing interest		( 3,164	)
Total obligation under capital lease	$	25,586

Note 5

Related Party Transactions

During the year ended December 31, 2008, the Company incurred management fees of $331,647 (December 31, 2007 - $75,528) which were charged by a company controlled by a director and officer of the Company and the directors of the Company .

During the year ended December 31, 2008, the Company incurred rental expense of $22,514 (December 31, 2007 - $5,582) which was charged by company controlled by a director and officer of the Company.

As at December 31, 2008, an amount of $79,118 (December 31, 2007 – $24,438) is owing to directors and officers of the Company. This amount is unsecured, non-interest bearing and has no set terms of repayment.

On June 11, 2008, the Company received a loan of $29,283 from the spouse of a director and officer of the Company. The promissory note is unsecured and bears interest at 10% per annum. Under the terms of the agreement, the Company incurred $131 in interest. The total balance of the loan and accrued interest was repaid on June 27, 2008.

On June 20, 2008, the Company received $246,300 from CAJ Business Solutions Ltd. (“CAJ”), (formerly Impulse Advertising Ltd.), a company controlled by the spouse of a director and officer of the Company. Under the terms of the loan agreement, the Company paid $24,630 in finance fees; this fee was paid during the year ended December 31, 2008. The loan bears interest

- 23 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 5

Related Party Transactions (cont’d)

at 10% per annum and is secured by promissory note and a general security agreement, granting CAJ a security interest in all of the assets and intellectual property held by the Company. Under the terms of the general security agreement, in the event of default by the Company, the security interest shall become enforceable, allowing CAJ to take immediate possession of the collateral in any manner permitted by law. Repayment of the principal, accrued interest and loan fee is payable by the Company on December 20, 2008. The loan has been extended until April 30, 2009. In the event that the Company requests an additional extension on the loan, CAJ will receive one fully paid, worldwide, single use, royalty free, non-exclusive license for use of the Company’s intellectual property as compensation. Included in the due to related parties balance at December 31, 2008 is accrued interest of $13,158 (December 31, 2007 - $NIL).

On September 26, 2008, the Company received a loan of $18,473 from Pelican Financial Corp., a company controlled by a director and officer of the Company. The promissory note is unsecured, bears interest at 10% per annum and was charged an initial loan fee of 10% of the capital debt. Repayment of the principal, accrued interest and loan fee is payable by the Company on December 31, 2008. The loan has been extended until April 30, 2009. Included in the due to related parties balance at December 31, 2008 is accrued interest and loan fees of $2,338 (December 31, 2007 - $NIL).

The Company had received loans from Iris International Holdings Limited (“Iris”), a significant shareholder of the Company, in the amount of $141,500 comprised of $56,500 received on July 26, 2006 and $85,000 received on September 28, 2006. These loans are unsecured and bear interest at 5% per annum. Repayment of the principal and accrued interest is payable by the Company on April 30, 2009, with extension fees of 10% of the capital debt.

Iris has the option to convert the $85,000 note payable, if not repaid by April 30, 2009, into common shares of the Company at CDN $0.10 per share.

Included in the due to related parties balance at December 31, 2008 is accrued interest and extension fees of $60,322 (December 31, 2007 - $24,946) relating to loans owing to Iris.

Note 6

Notes payable

On May 21, 2008, the Company received a loan in the amount of $44,334 from Montilla. The loan is unsecured and bears interest at 10% per annum. Repayment of the principal and accrued interest is payable on March 31, 2009. Failure of repayment of this note payable will result in a penalty of one fully paid, worldwide, single use, non-exclusive license for use of the Company’s intellectual property, for which Montilla will pay to the Company a royalty fee of 1.5% of sales. Included in the notes payable balance at December 31, 2008 is accrued interest and loan fees of $7,166.

As of December 31, 2008, the Company had received loans totaling $144,000 (December 31, 2007 - $144,000) from Hokley Limited (“Hokley”), which are unsecured and each carry a loan fee equal to 10% of the principal balance.

Repayment of the following principal, accrued interest and loan fees are payable by the Company on June 30, 2009. The dates on which the loans were received and applicable interest rates are as follows:

- 24 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 6

Notes payable (cont’d…)

On August 4, 2004, the Company received $4,000 which bears interest at 8% per annum;

ii.

On September 24, 2004, the Company received $5,000 which bears interest at 10% per annum;

iii.

On December 23, 2004, the Company received $5,000 which bears interest at 10% per annum;

iv.

On May 28, 2007, the Company received $30,000 which bears interest at 5% per annum; and

On July 18, 2007, the Company received $30,000 which bears interest at 5% per annum.

Repayment of the following principal, accrued interest and loan fees are payable by the Company on February 28, 2009. The loans have been extended until August 31, 2009 (see Note 10). The dates on which the loans were received and applicable interest rates are as follows:

On February 26, 2007, the Company received $40,000 which bears interest at 5% per annum; and

ii.

On September 26, 2007, the Company received $30,000 which bears interest at 10% per annum. In the event that the Company fails to pay the capital and interest on the extended date, Hokley will receive one fully paid, worldwide, single use, non-exclusive license for use of the Company’s intellectual property, for which Hokley will pay to the Company a royalty fee of 1.5% of sales.

Included in the notes payable balance at December 31, 2008 is accrued interest and loan fees of $42,658 (December 31, 2007 - $9,712).

Pursuant to SFAS No. 157, “Fair Value Measurements”, management has recognized that the interest rate on the notes payable from Hokley are 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 year ended December 31, 2008, $5,146 (December 31, 2007 – $10,624) was accreted to notes payable and expensed as finance charges. The carrying value of the notes payable at December 31, 2008 of $144,000 (December 31, 2007 – $138,854) has been accreted to its face value over the original term of the notes payable.

Note 7

Common stock

During the year ended December 31, 2007, the Company issued 11,000,000 common shares for assumption of assets and liabilities with a net fair value of $5,005,000 pursuant to the Asset Purchase Agreement with Montilla.

During the year ended December 31, 2007, the Company completed a private placement of 4,870,129 common shares for total proceeds of $1,125,000.

During the year ended December 31, 2008, the Company completed a private placement of 221,450 common shares for total proceeds of $51,155.

- 25 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 8

Income taxes

The parent Company is subject to income taxes in the US and its wholly-owned subsidiary is subject to income taxes in Canada. As of December 31, 2008, both the Company and its subsidiary had accumulated non-capital loss carry-forwards of approximately $2,110,000 of which $1,344,000 pertained to the US and $766,000 to Canada. These losses are available to reduce taxable income in future taxation years and begin to expire in 2020 after a carry forward period of 20 years. The Company is required to compute the deferred tax benefits from non-capital loss carry-forwards. However, due to the uncertainty of realization of these loss carry-forwards, a full valuation allowance has been provided against this deferred tax asset.

At December 31, 2008 and 2007, the components of the deferred tax asset, the statutory tax rate, the effective tax rate and the elected amount of the valuation allowance are shown below:

	December 31,			December 31,
	2008			2007

Non-capital tax loss carry forwards	$	2,110,000		$	838,000
Statutory tax rate		30	%		30	%
Effective tax rate		-			–
Deferred tax asset		633,000			251,400
Less: valuation allowance		(633,000	)		(251,400	)
Net deferred tax asset	$	–		$	–

	December 31,			December 31,
	2008			2007
Net Loss before income taxes	$	1,301,740			$	449,395
Non-deductible items		(30,162	)			(22,962	)
		1,271,578				426,433
Statutory tax rate		30	%			30	%
Deferred tax asset		381,473				127,930
Valuation allowance		(381,473	)			(127,930	)
	$	-			$	-

As a result of the implementation of FIN 48, the Company performed a comprehensive review of its portfolio of uncertain tax positions in accordance with recognition standards established by FIN 48. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review, the Company did not have any uncertain tax positions that would require additional liabilities or which such classification would be required. The amount of unrecognized tax positions did not change and management does not believe there will be any material changes in its unrecognized tax positions over the next twelve months.

- 26 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 9

Supplemental cash flow information

					March 15,
					2000
					(Date of
	Year ended				Inception)
	December 31,				December 31,
	2008		2007		2008
					(unaudited)
Cash paid for:
Income taxes	$	-	$	-	$	-

Interest	$	131	$	-	$	131

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	$	5,005,000
Debt assumed on acquisition of assets	$	-	$	350,000	$	350,000

Non-cash financing activities:
Equipment acquired under capital lease	$	55,486	$	-	$	55,486

An aggregate of 4,323,000 common shares were issued at fair values of $0.01 to $0.025 per share net of a deemed dividend of $10,250	$	-	$	-	$	33,325

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

Dividend deemed paid	$	-	$	-	$	(10,250	)

- 27 -

SYNTEC BIOFUEL INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2008

Note 10

Subsequent events

Subsequent to December 31, 2008, the Company received a loan from Iris, a significant shareholder of the Company, in the amount of $200,000. This loan is secured by a promissory note and bears interest at 10% per annum. Repayment of the principal and accrued interest is payable by the Company on June 15, 2009. Failure of repayment will result in a penalty of one fully paid, worldwide, single use, non-exclusive master license for use of the Company’s catalyst technology, for which Iris will pay to the Company a royalty fee of 1.5% of sales.

Subsequent to December 31, 2008, the Company extended the repayment of two loans from Hokley, previously due on February 28, 2009. Hokley has agreed to extend repayment of the loans until August 31, 2009 in exchange for a penalty charge of 10% of the capital debt. The total principal amount of the two loans is $70,000.

Note 11

Comparative figures

Certain of the comparative figures have been reclassified to conform to the presentation adopted in the current year.

- 28 -

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

On July 12, 2006, the Company agreed to terminate the services of their accountant, Amisano Hanson. They appointed Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, as their replacement. The decision to change the certified accountant had nothing to do with the performance of the former accountant’s services. Amisano Hanson’s report in the 2005 Consolidated Financial Statements did not contain an adverse opinion or disclaimer of opinion, nor were the statements modified as to uncertainty, audit scope, or accounting principles.

We did not have any disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to Amisano Hanson satisfaction, would have caused them to make reference to the subject matter of the disagreement(s) in connection with their report.

The Company has given Amisano Hanson authorization to fully respond to the inquiries of the Company’s new accountants, Dale Matheson Carr-Hilton LaBonte LLP, concerning the previous consolidated financial statements audited by Amisano Hanson. There were no limitations placed upon Amisano Hanson, whatsoever.

The fiscal years ended December 31, 2008, 2007 and 2006 were audited by Dale Matheson Carr-Hilton LaBonte LLP. The fiscal years ended December 31, 2005, 2004, 2003 and 2002 were audited by Amisano Hanson.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other 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 December 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.

Limitations on the Effectiveness of Controls.

Our management does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well developed and operated, can provide only reasonable, but not absolute assurance that the objectives of the control system are met. Further, the design of the control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their design and monitoring costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of a system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

- 29 -

Internal Control over Financial Reporting

Management’s Annual Report On Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as such term is defined in Exchange Act Rules 13a -15(f) and 15d-15(f). Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with accounting principles generally accepted in the United States of America. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2008 based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial close and reporting processes. The aforementioned material weaknesses were identified by the Company's Chief Financial Officer in connection with the audit of our financial statements as of December 31, 2008 and communicated the matters to our management.

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an affect on the Company's financial results. However, management believes that the lack of outside directors on the Company's board of directors can resulting in oversight in the establishing and monitoring of required internal controls and procedures which can affect the process of preparing Company's financial statements.

We are committed to improving our financial organization. As part of this commitment, we will create a segregation of duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to the Company: i) Appointing one or more outside directors to our board of directors who shall be appointed to the audit committee of the Company resulting in a fully functioning audit committee who will undertake the oversight in the establishing and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management ; and ii) Preparing and implementing sufficient written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

- 30 -

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on the Company's Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result in proper segregation of duties and provide more checks and balances within the accounting department. Additional personnel will also provide the cross training needed to support the Company if personnel turn over issues within the accounting department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues the Company may encounter in the future.

We 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.

This annual report does not include an attestation report of Dale Matheson Carr-Hilton LaBonte LLP., the Company’s independent registered public accounting firm, regarding internal control over financial reporting. Management’s report was not subject to attestation by Dale Matheson Carr-Hilton LaBonte LLP pursuant to temporary rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2008 and have concluded that no change has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

Item 9B. Other Information.

All information required to be disclosed in a report on Form 8-K during the three months ended December 31, 2008 was reported on Form 8-K.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Name	Age	Title
Michael Jackson 1	68	Chief Executive Officer and Director
Janet Cheng 2	38	Chief Financial Officer and Director

1 Mr. Jackson was elected as officer and director in March 2000.

2 Janet Cheng was appointed as Chief Financial Officer on September 28, 2007. She was appointed as a Director on November 8, 2007.

- 31 -

Background of Officers and Directors

Michael Jackson

Mr. Jackson has been a real estate land developer and investment banker since 1978. Mr. Jackson is currently president of Hillcon Developments Ltd., a position he has held since 1995. Mr. Jackson’s duties with Hillcon Developments include locating properties, preparing pro forma statements, raising capital, marketing, and dealing with Canadian governmental agencies, architects, and engineers. In his capacity as president for Hillcon Developments, he has been responsible for raising $50 million for 22 projects with a market value in excess of $150 million. He also acts as corporate counsel for Hillcon, and prepares all legal documents and negotiates all contracts.

From July 1999 to September 2001, Mr. Jackson was the chief executive officer and director of Poker.com Inc., a company that traded on the OTC Bulletin Board under the symbol “PKER”. The Company changed its name to LegalPlay Entertainment Inc. The Company has subsequently changed its name to Sythenol Inc and now trade on the OTC Bulletin Board under the symbol “STHL”.

Mr. Jackson has served as president of Ryerson Corporation A.V.V., a position he has held since January 2000. Ryerson is an investment company and Mr. Jackson’s duties include overseeing investment strategies.

Mr. Jackson also currently serves as president of Uninet Technologies Inc., an Internet software developer. He has held that position since January 1999.

From June 1985 to November 1987, Mr. Jackson worked with Geneva Capital Corporation, where his functions included taking companies public on the TSX Venture Exchange, the Toronto Stock Exchange, and NASDAQ. He acted as counsel for the Company and prepared all offering memoranda, and other legal documents. He also raised capital for the Company and negotiated all contracts.

Mr. Jackson served as a director of Waterloo Resources Inc. from August 1985 to December 1987, Lucky Mines Inc. from August 1985 to December 1987, and Burcon Developments Inc. from December 1987 to August 1988. Waterloo, Lucky Mines and Burcon were all public companies listed on the Vancouver Stock Exchange.

Mr. Jackson practiced law from 1966 through 1977.

Janet Cheng

Janet Cheng was appointed as Chief Financial Officer on September 28, 2007 as was appointed as a Director on November 8, 2007. Ms. Cheng is a Certified Public Accountant with a diverse knowledge of corporate finance. During the past five years she has assisted both private companies and public companies by managing their financial risk and assuring compliance with financial reporting requirements.

Family Relationships

There are no family relationships amongst our directors or executive officers.

- 32 -

Involvement in Certain Legal Proceedings

To the best of the registrant’s knowledge, during the past five years, no director, executive officer or control person:

(1)

has filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer within two years before the time of such filing;

(2)

were convicted in a criminal proceeding or named subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

(3)

were the subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of the following activities:

(i)

acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director of any investment company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii)

engaging in any type of business practice;

(iii)

engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodity laws.

(4)

were the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity;

(5)

were found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment in such civil finding or find by the Securities and Exchange Commission has not been subsequently reversed, suspended or vacated;

(6)

were found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on our review of the copies of the Section 16(a) forms we received covering acquisition and disposition transactions in our common stock during the year ended December 31, 2008, we believe that each person who, at any time during that fiscal year, was a director, executive officer, or beneficial owner of 10% or more of our common stock complied with all Section 16(a) filing requirements.

- 33 -

Code of Ethics

The Company has adopted a Code of Ethics that applies to all its employees, including its chief executive officer, chief financial and accounting officer, controller, and any persons performing similar functions. Such Code of Ethics is published on the Company’s internet website (www.syntecbiofuel.com).

Audit Committee

At present we do not have a separately designated standing audit committee and does not have an audit committee financial expert. The entire board of directors is acting as our Company's Audit Committee. The board of directors has determined that our Company is, at present, a development company and has not yet generated or realized any revenues from our business operations.

Item 11. Executive Compensation.

The following table sets forth information with respect to compensation paid by us to the President and the other highest paid executive officers (the “Named Executive Officer”) during the three most recent fiscal years.

SUMMARY COMPENSATION TABLE

(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)
Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All other Compensation ($)	Total ($)
Michael Jackson 1 Chairman, President	2006 2007 2008	- - -	- - -			- - -		9,920 44,528 144,240	9,920 44,528 144,240
Michael Raftery 2 Chief Financial Officer	2006	-	-			-		11,013	11,013
Cary Martin 3	2006	-	-			-		26,934	23,934
George Kosanovich 4 Chief Executive officer	2007 2008	-	-			-		39,750 104,586	39,750 104,586
Janet Cheng 5 Chief Financial Officer	2007 2008	-	-			-		12,000 38,720	12,000 38,720

1 Mr. Jackson was elected as officer and director in March 2000. Michael Jackson became Chief Executive Officer on October 15, 2008

2 Mr. Raftery resigned as officer and director in February 2007.

3 Mr. Martin resigned as officer and director in November 2006

4 Dr. George Kosanovich was appointed as Chief Executive Officer on September 28, 2007. He was appointed as a Director on November 19, 2007. George Kosanovich resigned as Chief Executive Officer on October 15, 2008

5 Janet Cheng was appointed as Chief Financial Officer on September 28, 2007. She was appointed as a Director on November 8, 2007.

- 34 -

Compensation Committee Interlocks and Insider Participation

The Company does not have a standing compensation committee or committed performing similar function as the Company is, at present, a development company. The entire Board of Directors acts as the compensation committee.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth, as of December 31, 2008, the number of Common Stock and the corresponding percentage ownership of (i) each person who held of record, or was known by us to own beneficially, more than five percent of our Common Stock, (ii) each director and executive officer of the Company, and (iii) all directors and executive officers of us as a group. The computation is based upon 33,194,079 shares of common stock being outstanding.

Unless otherwise indicated, we believe the following persons have sole voting and investment power with respect to the number of shares set forth opposite their names.

Name and Address	Number of Shares	Percentage Owned
CEDE & CO New York, NY	1,724,827	5.20%
Ryerson Corporation A.V.V. 1 c/o 7 Abraham de Veerstraat P.O. Box 840, Curacao Netherlands Antilles	9,205,000	27.73%
Iris International Le Montaigne 7 Avenue de Grande-Bretagne MC 98000 Monaco.	5,663,000	17.06%
Wood Energy Resources LLC 8159 Titleist Drive Pineville, LA 71360	4,437,229	13.37%
Montilla Capital Inc. c/o 7 Abraham de Veerstraat P.O. Box 840, Curacao Netherlands Antilles	3,080,000	9.28%
Michael Jackson Director and President	814,000 9,205,000 1	2.45% 27.73%
All Executive Officers and Directors as a Group	10,019,000	30.18%
1 Michael Jackson is the controlling shareholder of Ryerson Corporation A.V.V. He is the President, Secretary, Treasurer and Chairman of the Board of Syntec Biofuel Inc.

The Company does not have any equity compensation plans.

- 35 -

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The Company has issued a Promissory Note to CAJ Business Solutions Ltd (formerly Impulse Advertising Ltd) for the amount of $246,300. The Note is secured by a General Security Agreement, earns interest of 10% and is due and payable on April 30, 2009. Carol Jackson, spouse of Michael Jackson, President of our Company, is the President of CAJ Business Solutions Ltd.

The Company has issued a Promissory Note to Carol Jackson for the amount of $29,283. The Note is not secured and earns interest of 10% per annum. The loan was repaid on June 27, 2008.

The Company has issued a Promissory Note to Pelican Financial Corp. for the amount of $18,473. The Note is not secured, bears interest of 10% and is due and payable on April 30, 2009. Michael Jackson, President of our Company, is the President of Pelican Financial Corp.

Our policy regarding related transactions requires that any director or officer who has an interest in any transaction to be approved by our Board of Directors disclose the presence and the nature of the interest to the Board of Directors prior to any approval of the transaction by the Board of Directors. The transaction may then be approved by a majority of the disinterested directors, provided that an interested director may be counted in determining the presence of a quorum at the meeting of the Board of Directors to approve the transaction. Our policy regarding compensation for directors and officers is that the Board of Directors may, without regard to personal interest, establish the compensation of directors for services in any capacity.

Item 14. Principal Accounting Fees and Services.

1.	Audit Fees

The aggregate fees paid for 2008 fiscal year for professional services rendered by the principal accountant, Dale Matheson Carr-Hilton LaBonte LLP Chartered Accountants (“DMCL”), and the fees for the 2007 fiscal year for the services rendered by Amisano Hanson Chartered Accountants, for the audit of our annual financial statements and review of financial statements included in our Form 10-Qand 10-K and 10-KSB/A are as follows:

	2008		2007
	(estimated)		(actual)
DMCL Chartered Accountants	$	38,250	$	32,250
Amisano Hanson Chartered Accountants	$	-	$	530

2.	Audit-Related Fees

There were no additional aggregate fees billed in each of the last two fiscal years for assurance and related services by neither the accountant, Amisano Hanson Chartered Accountants, Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, that are reasonably related to the performance of the audit or review of our financial statements and are not reported under Item 9(e) (1) of Schedule 14A.

Tax Fees

There were no additional aggregate fees billed in each of the last two fiscal years for professional services rendered by neither the accountant, Amisano Hanson Chartered Accountants, Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, for tax compliance, tax advice and tax planning.

- 36 -

4.	All Other Fees

There were no additional aggregate fees billed in each of the last two fiscal years for products and services provided neither the accountant, Amisano Hanson Chartered Accountants, Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants,, other than the services reported in Item 9(e)(1) through 9(e)(3) of Schedule 14A.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

Financial Statements

Included in Part II, Item 8

Financial Statement Schedule

We are not filing any financial statement schedules as part of this Form 10-K because such schedules are either not applicable or the required information is included in the financial statements or notes thereto.

Exhibits

The following exhibits are either provided with this Annual Report or are incorporated herein by reference:

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Articles of Incorporation dated July 26, 2006
3.2	Amended and Restated Bylaws dated July 12, 2006
4.1	Specimen Stock Certificate for Shares of Common Stock of the Company (1)
10.1	License Agreement (2)
10.2	Assignment of License Agreement (2)
10.3	Settlement Agreement (3)
10.4	Manufacturing Agreement (3)
10.5	Acquisition Agreement of the URL (4)
10.6	Asset Purchase and Assignment Agreement (5)
10.7	Amendment to Asset Purchase and Assignment (6)
10.8	Intellectual Property And Asset Purchase Agreement dated September 28, 2007 (7)
	Amendment To Intellectual Property And Asset Purchase dated October 25, 2007 (8)
10.9	General Security Agreement dated June 20, 2008 (9)
21.1	List of Subsidiaries
31.1	302 Certification for the Chief Executive Officer
31.2	302 Certification for the Chief Financial Officer
32.1	Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

(1)	Filed on October 6, 2000 as an exhibit to the Company’s report on Form SB-2 and incorporated herein by reference

(2)	Filed on October 10, 2000 as an exhibit to the Company’s report on Form SB-2/A and incorporated herein by reference

(3)	Filed on January 29, 2001 as an exhibit to the Company’s report on Form SB-2/A and incorporated herein by reference

(4)	Filed on January December 16, 2003 as an exhibit to the Company’s report on Form SB-2/A and incorporated herein by reference

(5)	Filed on April 12, 2006 as an exhibit to the Company’s report on Form 8-K and incorporated herein by reference

(6)	Filed on July 17, 2006 as an exhibit to the Company’s report on Form 8-K and incorporated herein by reference

(7)	Filed on October 1, 2007 as an exhibit to the Company’s report on Form 8-K and incorporated herein by reference

(8)	Filed on October 25, 2007 as an exhibit to the Company’s report on Form 8-K/A and incorporated herein by reference

(9)	Filed on June 26, 2008 as an exhibit to the Company’s report on Form 8-K and incorporated herein by reference

- 37 -

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 Michael Jackson Director, CEO		Date: March 17, 2009



/s/ Janet Cheng		Date: March 17, 2009
Janet Cheng Director, CFO

- 38 -

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