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
or
£
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
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91-2031335
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification No.)
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Suite
206, 388 Drake Street
Vancouver,
British Columbia, Canada
|
|
V6B
6A8
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number(including area code)
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(604)
648-2090
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Securities
registered pursuant to Section 12(b) of the Act:
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None
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Securities
registered pursuant to Section 12(g) of the Act:
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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.
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:
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i.
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production
of syngas (CO, H2) either through the gasification of biomass feedstock,
or through steam reforming/partial oxidation of biogas or landfill
gas,
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ii.
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conversion
of syngas to bio-alcohols over Syntec catalyst in a fixed bed reaction
unit,
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iii.
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separation
and purification of bio-alcohols (high purity) to ethanol, methanol,
n-propanol and n-butanol.
|
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.
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.
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
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Low
Price
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March
31 2007
|
0.510
|
0.100
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June
30 2007
|
0.400
|
0.050
|
September
2007
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0.510
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0.080
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December
2007
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0.800
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0.200
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March
31 2008
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1.250
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0.630
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June
30 2008
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1.150
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0.700
|
September
2008
|
1.010
|
0.600
|
December
2008
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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.
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.
Since
inception, we have funded operations through common stock issuances, related and
non-related party loans in order to meet our strategic
objectives. However, there can be no assurance that we will be able
to obtain further funds to continue with our efforts to establish a new
business.
We expect
to continue to incur substantial losses in our efforts to establish a new
business. We are a development stage company. In a development stage company,
management devotes most of its activities to establishing a new business. As of
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".
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.
Item
8. Financial Statements and Supplementary Data.
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
CONSOLIDATED
FINANCIAL STATEMENTS
December
31, 2008 and 2007
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
(A
Development Stage Company)
CONSOLIDATED
BALANCE SHEETS
ASSETS
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|
December
31,
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December
31,
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
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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
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
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
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
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).
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
Note
2
|
Summary of Significant
Accounting Policies
|
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.
|
b)
|
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.
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.
|
d)
|
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.
|
e)
|
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%
|
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.
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 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.
|
h)
|
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.
|
i)
|
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.
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.
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.
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
Note 2
|
Summary
of Significant Accounting Policies
(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.
|
l)
|
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.
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.
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
Note 2
|
Summary
of Significant Accounting Policies
(cont’d)
|
|
n)
|
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.
|
o)
|
Recent
Accounting Pronouncements
|
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 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.
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.
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
|
|
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
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.
|
a)
|
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.
|
|
b)
|
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:
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
Note 6
|
Notes
payable
(cont’d…)
|
|
i.
|
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
|
|
v.
|
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:
|
i.
|
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.
|
a)
|
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.
|
|
b)
|
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.
|
|
c)
|
During
the year ended December 31, 2008, the Company completed a private
placement of 221,450 common shares for total proceeds of
$51,155.
|
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
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.
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
|
)
|
SYNTEC
BIOFUEL INC.
(A
Development Stage Company)
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
December
31, 2008
|
Note
10
|
Subsequent
events
|
|
a)
|
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.
|
|
b)
|
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
|
|
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.
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.
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
|
|
Amended
and Restated Articles of Incorporation dated July 26,
2006
|
|
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)
|
|
List
of Subsidiaries
|
|
302
Certification for the Chief Executive Officer
|
|
302
Certification for the Chief Financial Officer
|
|
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
|
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
|
|
|
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