**UNITED STATES  SECURITIES  AND EXCHANGE COMMISSION****Washington,  D.C. 20549**

**FORM****10-K**

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

For the fiscal year ended: **December   31, 2009**

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                                                        | 91-2031335                           |
|-------------------------------------------------------------------|--------------------------------------|
| (State or other    jurisdiction of incorporation or organization) | (IRS    Employer Identification No.) |

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

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

Securities registered pursuant to Section 12(b) of the Act: None

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

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

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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.   [X] 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  [X]           |

Indicate by check mark  whether the registrant is a shell company (as defined in Rule 12b-2 of the  Act).   [  ]  Yes  [X]  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, 2009 was $8,444,748.80  **

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: March 26, 2010 - 35,837,412

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). 

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**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, a major drop in price for biofuel  and other risks and uncertainties. Actual results could differ materially from  those projected in the forward-looking statements, either as a result of the  matters set forth or incorporated in this Report  generally  and certain economic and business factors, some of which may be beyond our  control.  

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

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**PART I**

**Item 1. Business**

**General**

The  basic concept of Syntec's business plan is to license their core technology to  third party operators who will pay Syntec a Licensing fee of $250,000 plus a  royalty fee of 3% of sales (approx. $0.06 cents per gallon) of alcohol  produced. Syntec will also earn commission on the sale of catalysts.   The business strategy is to license their  technology to companies that will build smaller plants i.e. 12 MM gpy in close  proximity or co-located with a feedstock supplier (to reduce biomass and  transport costs and secure a guaranteed feedstock supply).  Syntec will also market technology licenses  to companies such as Methanex, Sasol, B.P. Mitsui and Sabic that may utilize a  portion of their natural gas to produce Mixed Alcohols, which have a higher  commodity value than methanol.

In  order to license our technology, we have to showcase our process in an  industrial environment so that a potential licensee can see a tree going in one  side and liquid fuel coming out the other side. To achieve this Syntec has to  build a Pilot Plant which they can do by building a back end reactor to an  existing gasifier at a reduced cost. 

Syntec  has been offered access to a 3 tpd gasifier in Mississippi which has been operating for  over 4 years. Syntec proposes to engineer and build a reactor to fit onto the  backend of this gasifier. 

Syntec  has achieved a yield of 110 gallons of alcohol per ton of biomass (one of the  highest yields in the world) and will use the pilot facility as a showcase for  viewing by potential licensees and investors. Such a Pilot plant is expected to  cost approximately $3 million.  

On  a more pragmatic level, Syntec is also planning to test their catalysts using  natural gas which is currently used for heat and electricity as well as for  production of methanol. Syntec will market their catalyst technology to  companies producing methanol such as Methanex, Mitsui, B.P. Mitsubishi, Sabic  and others who could increase revenue by producing a mixed alcohol that has a  far greater value than methanol. 

Syntec  is continuously working on improving their catalysts to maximize yield and  productivity. Subsequent to September   30, 2009, we have entered into a Collaborative Research Agreement  with the University of British Columbia (UBC) who will perform the final stage  of testing the effect of contaminants on Syntec's catalysts and enhancement of  efficiencies prior to scale up to Pilot Plant.   Syntec donated laboratory equipment to UBC in lieu of part of the  fees.  Syntec has also entered into a  Joint Development Agreement with EERC (part of the University of North Dakota)  to perfect a process to produce bio-butanol. 

The  Biofuel market has been battered by the financial melt down and low ethanol and  methanol pricing tied to the price of oil. However, the future of biofuel is  almost guaranteed with the US Government mandating 21 billion gallons of  cellulosic biofuel by 2022 and the push towards a 15% blending requirement. 

The  corn ethanol producers have been hit hard with increased prices for Corn and a  corresponding drop in price for ethanol. As a result, many companies have, and  are, going bankrupt. Fortunately, the Syntec catalyst produces mixed alcohols  which include Propanol and Butanol. These two alcohols sell for greater than $5  a gallon and raise the average price of our combined mix of alcohols well above  the price of ethanol. This mitigates the risk of developing a process to  produce diverse alcohols and is a hedge against betting on a single biofuel  such as ethanol. There is the added tax credit incentive of $1.01 a gallon in  the USA  which will be shared with the refinery blenders and makes the production of  ethanol and methanol an economically viable process. 

Syntec  is still very bullish on achieving success as a leader in the thermo-chemical  race. Producing ethanol and other alcohols from waste biomass is still very  compelling and our projected production cost of $0.88 per gallon is still one  of the lowest in the biofuel industry. Our technology is far simpler and more  stable than using enzymes and fermentation to break down cellulose and should  consistently be able to be produced at a much lower price. 

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**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:

|   | i.   | production of  syngas (CO, H2) either through the gasification of biomass feedstock, or  through steam reforming/partial oxidation of biogas or landfill gas, |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ii.  | conversion of  syngas to bio-alcohols over Syntec catalyst in a fixed bed reaction unit,                                                                      |
|   | iii. | separation and  purification of bio-alcohols (high purity) to ethanol, methanol, n-propanol and  n-butanol.                                                   |

The  B2A process has the potential for higher yields and lower production costs per  ton of feedstock than any other   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 bio-butanol development program with  EERC  will utilize the B2A process in  conjunction with a newly developed catalyst to produce bio-butanol.

The  Company business model is to sell licenses and enter joint venture partnerships  to 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 available in close proximity to the facility.  

Upon  commercialization, raw materials for Syntec's B2A process will be readily  available due to the ability to utilize waste feed stocks 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 10th of June, 2008.  A second international 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 to  produce ethanol 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  

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fermentation  methods requires considerable energy and time to produce ethanol, affecting the  production volumes and economic viability.   In addition, fermentation technologies are sensitive to feedstock  variations.  

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.   

Our  technology has the added benefit of producing not only ethanol but also  methanol, propanol and butanol.  These  additional alcohols allow for entry into the bio-chemical market which is  growing rapidly as companies look for sustainable replacements to  petrochemicals.  The multiple product  streams and markets hedge against price fluctuations in one product and lessen  the impact of gasoline prices on the economic viability of the business.

**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 $343,715 in 2008 and $83,587  in 2009 in continued research and development.

**Proposal  to apply for a Name Change**

The biofuel market has been hard hit by  escalation in feedstock costs and drop in fuel prices which has resulted in  many biofuel companies losing money and in some cases going bankrupt. This has  given the bio-fuel industry a black eye with investors. As Syntec's technology  produces not only biofuel but chemical /alcohols from biomass but also produces  mixed alcohols from natural gas and gasified coal, we are not strictly a  biofuel company and we therefore propose to apply to change our name to  Synthenol Inc.

**Number  of Employees**

As the company has transferred their  laboratory to the University   of British Columbia we do  not have any Employees other than the Officers of the Company.

**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.

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**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, 2009.

**PART II**

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

**Market Information**

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

| **Quarter    Ended** | **High    Price** | **Low    Price** |
|----------------------|-------------------|------------------|
| March 31 2008        | 1.250             | 0.550            |
| June 30 2008         | 1.300             | 0.450            |
| September    2008    | 1.010             | 0.550            |
| December    2008     | 1.010             | 0.200            |
| March 31 2009        | 0.500             | 0.100            |
| June 30 2009         | 0.250             | 0.100            |
| September    2009    | 0.400             | 0.200            |
| December    2009     | 0.550             | 0.150            |

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 February 11, 2010,  we had 60 shareholders of record of common stock, including shares held by  brokerage clearing houses, depositories or otherwise in unregistered form. 

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**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,   2009, 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, 2009, 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

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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,   2009, we had a working capital deficit of $1,694,475. 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 $10,228 as of December   31, 2009 and was $1,419 at December 31, 2008. 

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 2010 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, 2009  and 2008**

The  Company had no revenue for the year ended December 31, 2009 and 2008. Expenses decreased  from $1,307,689 in 2008 as compared to $819,000 in 2009. In 2009, the Company  incurred consultant and management fees of $250,765 as compared to $375,863 in  2008 as the R&D shifted to the University   of British Columbia. The  interest fees were $89,292 in 2009 as compared to $46,604 in 2008 for  increasing loans for operations. Furthermore, the development fees decreased  from $343,715 in 2008 to $83,587 in 2009 as the development transitioned to  UBC. The net loss for 2009 was $839,512 as compared to $1,301,740 in 2008. Our  net loss per share is at $0.02 for 2009 and $0.04 for 2008.

**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  

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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 May 2009, the Financial Accounting  Standards Board (“FASB”) issued guidance that establishes general standards of  accounting for and disclosure of events that occur subsequent to the balance  sheet date but before financial statements are issued. The statement defines  two types of subsequent events (1) recognized subsequent events, which provide  additional evidence about conditions that existed at the balance sheet date,  and (2) non-recognized subsequent events, which provide evidence about  conditions that did not exist at the balance sheet date, but arose before the  financial statements were issued. Recognized subsequent events are required to  be recognized in the financial statements, and non-recognized subsequent events  are required to be disclosed. The adoption had no material impact on the  Company's financial position, results of operations or cash flows. 

In June 2009, the FASB issued the  Accounting Standards Codification, which establishes a sole source of US  authoritative GAAP. The Codification is meant to simplify user access to all  authoritative accounting guidance by reorganizing US GAAP pronouncements into  approximately ninety accounting topics within a consistent structure; its  purpose is not to create new accounting and reporting guidance. The adoption of  this guidance did not have an effect on the Company's consolidated results of  operations, financial position or cash flows. 

Other pronouncements issued by the FASB or  other authoritative accounting standards groups with future effective dates are  either not applicable or are not expected to be significant to the consolidated  financial statements of the Company.

**Item 7A. Quantitative and Qualitative  Disclosures About Market Risk.**

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

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**Item 8. Financial Statements and  Supplementary Data.**

** **

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**SYNTEC BIOFUEL INC.**  (A Development  Stage Company)  CONSOLIDATED FINANCIAL STATEMENTS  December   31, 2009 and 2008 

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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

We have audited the accompanying  consolidated balance sheets of Syntec Biofuel Inc., a development stage company,  as of December 31, 2009  and 2008 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, 2009 and 2008 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   March 30, 2010

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

| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | December 31,                                                                                                                     |   |   | December 31,                                                                         |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|
|                                                                                |   | 2009                                                                                                                             |   |   | 2008                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                                                             |   |   |                                                                                 |   |
|     Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                              | $      | 10,228                                                                                                                           |   | $      |             1,419             |   |
|     Receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | 23,328                                                                                                                           |   |   |             23,283            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 33,556                                                                                                                           |   |   |             24,702            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Equipment (Note 4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 169,658                                                                                                                          |   |   |           254,839                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Intellectual property  (Note 3)                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | 5,100,000                                                                                                                        |   |   |        5,100,000                                       |   |
| Intangible assets     (Note 3)                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | 20,000                                                                                                                           |   |   |             20,000            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $      |      5,323,214                                                                                               |   | $      |      5,399,541                                                   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                                                                                                             |   |   |                                                                                 |   |
|     Accounts payable and accrued    liabilities                                                                                                                                                                                                                                                                                                                                                                                                                       | $      |         198,717                                                                               |   | $      |         193,324                                   |   |
|     Current portion of obligation under capital lease    (Note 4)                                                                                                                                                                                                                                                                                                                                                                                                     |   |             10,634                                                        |   |   |             16,411            |   |
|     Due to related parties (Note 5)                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |        1,107,077                                                                                   |   |   |           561,209                       |   |
|     Notes payable (Note 6)                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | 411,603                                                                                                                          |   |   |           238,158                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        1,728,031                                                                                   |   |   |        1,009,102                                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Obligation under    capital lease (Note 4)                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                       - |   |   |               9,175 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        1,728,031                                                                                   |   |   |        1,018,277                                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
| Commitments    and contingencies (Notes 3, 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 (Note 7):                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                             |   |   |                                                                                 |   |
|     Authorized: 100,000,000 with    a par value of $0.0001                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                                                             |   |   |                                                                                 |   |
|     Issued and outstanding:    35,237,412 (December 31,     2008: 33,194,079)                                                                                                                                                                                                                                                                                                                                                                                    |   |               3,523                                             |   |   |               3,319 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |        6,501,277                                                                                   |   |   |        6,328,543                                       |   |
| Accumulated other comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                (15,165)                                                   |   |   |                104,342        |   |
| Deficit accumulated during the development stage                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |       (2,894,452)                                                                                       |   |   |       (2,054,940)                                           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        3,595,183                                                                                   |   |   |        4,381,264                                       |   |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                                                                                                             |   |   |                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $      |      5,323,214                                                                                               |   | $      |      5,399,541                                                   |   |

SEE ACCOMPANYING NOTES

13

----

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

|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   | March 15,                                                                    |   |
|--------------------------------------------------------------------------------|--------------|----------------------------------------------------------------------------------------------------------------|--------|---------------|----------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   | 2000                                                                         |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   | (Date of                                                                     |   |
|                                                                           | Year ended   |                                                                                                           |   | Inception) to |                                                                                                           |
|                                                                           | December 31, |                                                                                                           |   | December 31,  |                                                                                                           |
| ** **                                                                     |         | 2009                                                                                                           |   |          | 2008                                                                                                           |   |   | 2009                                                                         |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   | (Unaudited)                                                                  |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Expenses                                                                       |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
|     Consulting fees                                             | $            |          33,600                                                        |   |          | $         44,216                                                       |   | $      |        284,858                                 |   |
|     Depreciation                                                |         |            62,033                                            |   |          |            56,553                                            |   |   |          131,347                     |   |
|     Development fees (Note 3)                                   |         |            83,587                                            |   |          |          343,715                                                       |   |   |          518,538                     |   |
|     Filing fees                                                 |         |             8,393                                       |   |          |            11,133                                            |   |   |            50,671          |   |
|     Financing charges                                           |         |          189,084                                                       |   |          |            85,011                                            |   |   |          284,719                     |   |
|     Foreign exchange loss                                       |         |                26,112                                   |   |          |            60,947                                            |   |   |            87,059          |   |
|     Interest expense                                            |         |            89,292                                            |   |          |            46,604                                            |   |   |          169,361                     |   |
|     Management    fees (Note 5)                                 |         |          217,165                                                       |   |          |          331,647                                                       |   |   |          675,725                     |   |
|     Marketing                                                   |         |             2,767                                       |   |          |            13,968                                            |   |   |            55,881          |   |
|     Office    and miscellaneous                                 |         |            10,178                                            |   |          |            38,908                                            |   |   |            76,122          |   |
|        Professional fees                                        |         |            56,712                                            |   |          |          176,273                                                       |   |   |          345,742                     |   |
|     Rent (Note 5)                                               |         |             21,017                                      |   |          |            22,514                                            |   |   |                49,113 |   |
|     Rights and licenses costs                                   |         |                    - |   |          |                    - |   |   |            25,015          |   |
|     Travel                                                      |         |                19,060                                   |   |          |            76,200                                            |   |   |              123,699            |   |
|     Write-down of website                                       |         |                    - |   |          |                    - |   |   |             5,000     |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Loss    from operations                                                        |         |         (819,000)                                                           |   |          |      (1,307,689)                                                                           |   |   |      (2,882,850)                                         |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Write-off    of equipment (Note 4)                                             |         | (14,237)                                                                                                       |   |          | -                                                                                                              |   |   | (14,237)                                                                     |   |
| Loss    on sale of equipment (Note 4)                                          |         |              (6,275)                                                   |   |          |                    - |   |   |            (6,275)         |   |
| Other    income                                                                |         |                    -      |   |          |             5,949                                       |   |   |             8,910     |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Net loss                                                                       | $            |      (839,512)                                                                             |   | $             |        (1,301,740)                                                                              |   | $      |      (2,894,452)                                         |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Basic    and diluted loss per share                                            | $            |             (0.02)                                      |   | $             |            (0.04)                                            |   |   |                                                                         |   |
| Weighted    average shares       outstanding – basic    and diluted |         |     33,700,225                                                                                  |   |          |       33,097,807                                                                      |   |   |                                                                         |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Comprehensive loss                                                             |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Net loss                                                                       | $            |       (839,512)                                                                       |   | $             |    (1,301,740)                                                                                       |   | $      |    (2,894,452)                                                     |   |
| Foreign currency    translation adjustment                                     |         |         (119,507)                                                           |   |          |          102,283                                                       |   |   |          (15,165)                    |   |
|                                                                           |         |                                                                                                           |   |          |                                                                                                           |   |   |                                                                         |   |
| Total comprehensive loss                                                       | $            |      (959,019)                                                                             |   | $             |        (1,199,457)                                                                              |   | $      |      (2,909,617)                                         |   |

SEE ACCOMPANYING NOTE

14

----

**SYNTEC BIOFUEL INC.**(A Development  Stage Company)CONSOLIDATED STATEMENTS OF CASH  FLOWS

|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   | March 15,                                                                                                                                                |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   | 2000                                                                                                                                                     |   |
|                                                                                                                                                                                                                |   | Year ended                                                                                                                 |   |   | (Inception) to                                                                                                             |   |
|                                                                                                                                                                                                                |   | December 31,                                                                                                               |   |   | December 31,                                                                                                               |   |
|                                                                                                                                                                                                                |   | 2009                                                                                                                       |   |   | 2008                                                                                                                       |   |   | 2009                                                                                                                                                     |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   | (Unaudited)                                                                                                                                              |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Cash flows from operating activities                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
|      Net loss                                                                                                                                                                                   | $      |    (839,512)                                                                                                     |   | $      | (1,301,740)                                                                                                                |   | $      |       (2,894,452)                                                                                                               |   |
|      Non-cash    items:                                                                                                                                                                         |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
|           Depreciation                         |   |          62,033                                                                    |   |   |          56,553                                                                    |   |   |              131,347                                                                         |   |
|           Financing    charges                                                              |   |        135,492                                                                               |   |   |          32,600                                                                    |   |   |              169,492                                                                         |   |
|           Accrued    interest on notes payable                                                                                 |   |          61,659                                                                    |   |   |             7,512                                                   |   |   |                77,483                                                              |   |
|           Foreign exchange on notes payable                                                                                                                            |   |          33,981                                                                    |   |   | -                                                                                                                          |   |   |         33,981                                                                                                        |   |
|           Interest on capital    lease obligation                                                                                                                           |   |            2,940                                                         |   |   |                1,637                                                |   |   |                     4,577                                                |   |
|           Shares issued for consulting                                                                                                                                 |   |        9,600                                                                                 |   |   |                   -                   |   |   |                9,600                                                               |   |
|           Legal and    organizational expenses                                                                                                                         |   |                      - |   |   |                      - |   |   |                  8,000                                                   |   |
|           Rights and licenses    costs                                                                                                                                 |   |                      - |   |   |                      - |   |   |                24,751                                                              |   |
|           Share subscriptions    receivable                                                                                                                                 |   |                   -                        |   |   |                      - |   |   |                      575                             |   |
|           Write-down of website                                                                                                                                             |   |                      - |   |   |                      - |   |   |                  5,000                                                   |   |
|           Write-off    and loss on sale of equipment                                                                                                                   |   |          20,512                                                                    |   |   |                      - |   |   |                20,512                                                                   |   |
|      Changes in    operating assets and liabilities:                                                                                                                                            |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
|           Receivables                                                                                                                                                  |   |                 (45)                            |   |   |         (17,033)                                                                        |   |   |               (23,328)                                                                  |   |
|           Prepaids                                                                                                                                                     |   |                      - |   |   |          31,092                                                                    |   |   |                           - |   |
|           Accounts    payable and accrued liabilities                                                                                                                  |   |             5,393                                                   |   |   |        169,010                                                                               |   |   |              198,715                                                                         |   |
|           Amounts    due to related parties                                                                                                                            |   |          96,382                                                                    |   |   |        105,552                                                                               |   |   |              251,018                                                                         |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Net cash used in operating activities                                                                                                                                                                               |   |       (411,565)                                                                                   |   |   |       (914,817)                                                                                   |   |   |         (1,982,729)                                                                                                   |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Cash flows from investing activities                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
|      Investment in equipment                                                                                                                                                                    |   |                      - |   |   |         (29,422)                                                                        |   |   |               (33,667)                                                                  |   |
|      Proceeds on sale of equipment                                                                                                                                                              |   | 2,636                                                                                                                      |   |   |                   -                   |   |   |            2,636                                                                                       |   |
|      Repayment of debt assumed                                                                                                                                                                  |   |                      - |   |   |                      - |   |   |            (350,000)                                                                                   |   |
|      Rights and licenses                                                                                                                                                                        |   |                      - |   |   |                      - |   |   |                         (1)           |   |
|      Website cost                                                                                                                                                                               |   |                      - |   |   |                      - |   |   |                 (5,000)                                                       |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Net cash provided by (used in) investing activities                                                                                                                                                                 |   |             2,636                                                   |   |   |         (29,422)                                                                        |   |   |            (386,032)                                                                                   |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Cash flows from financing activities                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
|      Common stock issued for    cash                                                                                                                                                            |   |        145,000                                                                               |   |   |          51,155                                                                    |   |   |          1,422,767                                                                                               |   |
|      Proceeds from notes payable                                                                                                                                                                |   |        121,996                                                                               |   |   |          49,480                                                                    |   |   |              326,102                                                                         |   |
|     Payments under capital    lease obligation                                                                                                                                                       |   |         (17,892)                                                                        |   |   |            (31,537)                                                                     |   |   |                (49,429)                                                                           |   |
|      Proceeds from related    parties                                                                                                                                                           |   |        288,141                                                                               |   |   |        264,773                                                                               |   |   |              694,714                                                                         |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Net cash provided by financing activities                                                                                                                                                                           |   |        537,245                                                                               |   |   |        333,871                                                                               |   |   |          2,394,154                                                                                               |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Effect of exchange rates on    cash                                                                                                                                                                                 |   |       (119,507)                                                                                   |   |   |        102,283                                                                               |   |   |               (15,165)                                                                  |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Change in cash                                                                                                                                                                                                      |   |             8,809                                                   |   |   |       (508,085)                                                                                   |   |   |                10,228                                                              |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Cash, beginning                                                                                                                                                                                                     |   |             1,419                                                   |   |   |        509,504                                                                               |   |   |                           - |   |
|                                                                                                                                                                                                                |   |                                                                                                                       |   |   |                                                                                                                       |   |   |                                                                                                                                                     |   |
| Cash, ending                                                                                                                                                                                                        | $      |        10,228                                                                                |   | $      |          1,419                                                                     |   | $      |              10,228                                                                          |   |

Supplemental  cash flow information (Note 8)

SEE ACCOMPANYING NOTES

15

----

**SYNTEC BIOFUEL INC.**   (A Development  Stage Company)  CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 

|                                                                                                  |        |           |   |         |   |             |   |             |   | Deficit            |        |             |
|-------------------------------------------------------------------------------------------------------|--------|----------------|--------|--------------|--------|------------------|--------|------------------|--------|--------------------|--------|------------------|
|                                                                                                  |        |           |   |         |   |             |   | Accumulated      |   | Accumulated        |        |             |
|                                                                                                  |        |           |   |         |   | Additional       |   | Other            |   | During the         |        |             |
|                                                                                                  |        | Common Stock   |   | Paid-in      |   | Comprehensive    |   | Development      |        |               |
|                                                                                                  |        | Number         |   | Amount       |   | Capital          |   | Income (Loss)    |   | Stage              |        | Total            |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
| Balance, March 15, 2000                                                                               | $      | -              | $      | -            | $      | -                | $      | -                | $      | -                  | $      | -                |
| Stock    issued for legal and organizational expenses at a  fair market value of $0.01 per share |        | 1,600,000      |   | 160          |   |   7,840     |   | -                |   | -                  |   |   8,000     |
| Stock    issued for acquisition of a license at a fair market value of $0.01 per share                |        | 7,000,000      |   | 700          |   |   34,300    |   | -                |   | -                  |   |   35,000    |
| Dividend    deemed paid                                                                               |        | -              |   | -            |   |   (10,250)  |   | -                |   | -                  |   |   (10,250)  |
| Net loss    for the period                                                                            |   | -              |   | -            |   | -                |   | -                |   |   (32,750)    |   |   (32,750)  |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2000                                                                    |        | 8,600,000      |   | 860          |   |   31,890    |   | -                |   |   (32,750)    |   | -                |
| Net loss    for the year                                                                              |   | -              |   | -            |   | -                |   | -                |   | (500)              |   | (500)            |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2001                                                                    |        | 8,600,000      |   | 860          |   |   31,890    |   | -                |   |   (33,250)    |   | (500)            |
| Net loss    for the year                                                                              |   | -              |   | -            |   | -                |   | -                |   |   (1,857)     |   |   (1,857)   |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2002                                                                    |        | 8,600,000      |   | 860          |   |   31,890    |   | -                |   |   (35,107)    |   |   (2,357)   |
| Net loss    for the year                                                                              |   | -              |   | -            |   | -                |   | -                |   |   (6,529)     |   |   (6,529)   |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2003                                                                    |        | 8,600,000      |   | 860          |   |   31,890    |   | -                |   |   (41,636)    |   |   (8,886)   |
| Stock    issued as a private placement at $0.025 per share                                            |        | 8,474,000      |   | 847          |   |   105,077   |   | -                |   | -                  |   |   105,924   |
| Net loss    for the year                                                                              |   | -              |   | -            |   | -                |   | -                |   |   (20,074)    |   |   (20,074)  |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2004                                                                    |        | 17,074,000     |   |   1,707 |   |   136,967   |   | -                |   |   (61,710)    |   |   76,964    |
| Stock    issued as a private placement for at $0.025 per share                                        |        |   26,000  |   | 3            |   | 323              |   | -                |   | -                  |   | 326              |
| 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                                                                         |        | 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)   |   |   (191,081) |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |        |           |   |         |   |             |   |             |   |               |   |             |
| 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 part of private placement 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        |
| Unrealized    gain on translation                                                                     |        | -              |   | -            |   | -                |   |   (119,507) |   | -                  |   |   (119,507) |
| Stock    issued for consulting services at $0.21 per share                                            |        |   10,000  |   | 1            |   |   2,099     |   | -                |   | -                  |   |   2,100     |
| Stock    issued as part of private placement at $0.075 per share                                      |        | 1,933,333      |   | 193          |   |   144,807   |   | -                |   | -                  |   |   145,000   |
| Stock    issued for consulting services at $0.075 per share                                           |        |   100,000 |   | 10           |   |   7,490     |   | -                |   | -                  |   |   7,500     |
| Discount    on notes payable                                                                          |        | -              |   | -            |   |   18,338    |   | -                |   | -                  |   |   18,338    |
| Net loss    for the year                                                                              |   | -              |   | -            |   | -                |   | -                |   |   (839,512)   |   |   (839,512) |
|                                                                                                       |        |                |        |              |        |                  |        |                  |        |                    |        |                  |
|                                                                                                  |   |           |   |         |   |             |   |             |   |               |   |             |
| Balance,    December 31, 2009                                                                         | $      | 35,237,412     | $      |   3,523 | $      |   6,501,277 | $      |   (15,165)  | $      |   (2,894,452) | $      | 3,595,183        |

SEE ACCOMPANYING NOTES

16

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**SYNTEC BIOFUEL INC.**  (A Development Stage Company)  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  December 31, 2009 

**Note 1       Nature  and Continuance of Operations**

> 
Syntec Biofuel Inc. (the “Company”) was incorporated  in the State of Washington  on March 15, 2000  and is a development stage company. The Company is a renewable energy company  focusing on the development and commercialization of second generation biofuel  technology and processes to convert waste cellulosic biomass into ethanol and  other alcohols. 

The accompanying consolidated financial statements  have been prepared on the basis of a going concern, which assumes that the  Company will be able to meet its obligations and continue its operations for  its next fiscal year. At December   31, 2009, the Company had not yet achieved profitable operations  and has accumulated losses of $2,894,452 (2008 - $2,054,940) since its  inception and has a working capital deficiency of $1,694,475 (2008 - $984,400).  The continuing operations of the Company are dependent upon its ability to  raise adequate financing to develop its catalyst technology for production.

Realization values may be substantially different from  the carrying values shown on these consolidated financial statements. These  consolidated 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.  Since internally generated cash flow will not  fund development and commercialization of the Company's technology, the Company  will require significant additional financial resources and will be dependent  on future financings to fund its ongoing operations as well as other working  capital requirements. The Company's future capital requirements will depend on  many factors including the rate and extent of progress in its development and  commercialization program. There can be no assurance that the Company will be  successful in its efforts to raise additional financing or if financing is  available, that it will be on terms that are acceptable to the Company. 

Management is addressing going concern remediation  through raising additional sources of capital for operations and planned  commercialization. Management's plans are intended to increase the Company's  financial stability and to improve the efficiency of continuing operations. 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.

**Note 2       Summary  of Significant Accounting Policies**

a)                Basis of Presentation

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

17

----

**Note 2       Summary  of Significant Accounting Policies**(cont'd)

b)               Principles  of Consolidation

> 
 These  consolidated financial statements include the accounts of the Company 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. 

c)               Use  of Estimates

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

d)               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. 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.

e)              Equipment and  Depreciation 

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

|                                 | Basis                                  | Rate                                                                                           |
|---------------------------------|----------------------------------------|------------------------------------------------------------------------------------------------|
|                                 |                                        |                                                                                                |
| Computer equipment              | Straight-line and    declining balance |                 30% |
| Office and laboratory equipment | Straight-line                          |                 20% |
| Equipment under capital lease   | Straight-line                          | 20%                                                                                            |

f)               Intangible Assets

> 
 Goodwill and intangible assets  with indefinite lives are not amortized but are annually tested for impairment.  The determination of any impairment includes a comparison of the estimated  future operating cash flows anticipated during the remaining life for the net  carrying value of the asset as well as a comparison of the fair value to the  book value of the Company or the reporting unit to which the goodwill can be  attributed.

18

----

**Note 2       Summary  of Significant Accounting Policies** (cont'd) 

g)               Long  Lived Assets

> 
The Company reviews  equipment and intangible assets for impairment. 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)               Other Comprehensive Income

> 
The Company reports and  displays comprehensive income and its components in the financial statements.  During the years ended December   31, 2009 and 2008, the only component of comprehensive income was  foreign currency translation adjustments. 

i)                Government Grants

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

j)                Income  Taxes

> 
The  Company follows the asset and liability method of 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.

The  Company accounts 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. 

k)               Basic  and Diluted Loss 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.     

19

----

**Note 2       Summary of Significant Accounting  Policies** (cont'd)

l)                Financial  Instruments

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

m)              Concentration of Credit Risk   

> 
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and accounts receivable. The Company places its cash with high quality financial institutions and at times may exceed the federally insured limits. The Company has not experienced a loss in such accounts nor does it expect any related losses in the near term.      

n)               Stock-based Compensation   

> 
The Company recognizes the compensation cost related  to share-based payments, such as stock options and employee stock purchase  plans, in the financial statements based on the grant-date fair value of the  award. As at December 31,   2009 and 2008, 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 May 2009, the Financial Accounting  Standards Board (“FASB”) issued guidance that establishes general standards of  accounting for and disclosure of events that occur subsequent to the balance  sheet date but before financial statements are issued. The statement defines  two types of subsequent events (1) recognized subsequent events, which provide  additional evidence about conditions that existed at the balance sheet date,  and (2) non-recognized subsequent events, which provide evidence about  conditions that did not exist at the balance sheet date, but arose before the  financial statements were issued. Recognized subsequent events are required to  be recognized in the financial statements, and non-recognized subsequent events  are required to be disclosed. The adoption had no material impact on the  Company's financial position, results of operations or cash flows. 

In June 2009, the FASB issued the  Accounting Standards Codification, which establishes a sole source of US  authoritative GAAP. The Codification is meant to simplify user access to all  authoritative accounting guidance by reorganizing US GAAP pronouncements into  approximately ninety accounting topics within a consistent structure; its  purpose is not to create new accounting and reporting guidance. The adoption of  this guidance did not have an effect on the Company's consolidated results of  operations, financial position or cash flows. 

Other pronouncements issued by the FASB or  other authoritative accounting standards groups with future effective dates are  either not applicable or are not expected to be significant to the consolidated  financial statements of the Company.

20

----

**Note 3       Intellectual  Property and Intangible Assets**

> 
Pursuant  to a purchase and assignment agreement and an asset purchase agreement (the  “Asset Purchase Agreement”) entered into during the year ended December 31, 2007, the  Company acquired a 100% ownership interest in certain intellectual property and  intangible assets. The intellectual property in the amount of $5,100,000  relates to the development and a method of producing catalysts and processes  that convert biomass waste material into ethanol and the intangible assets in  the amount of $20,000 relate to a website. At December 31, 2009 and 2008, management has tested  the intellectual property and intangibles for recoverability and no events or  changes in circumstances indicated that the carrying values may not be  recoverable. Therefore, there is no impairment of these assets at December 31, 2009 and  2008. 

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 was for an initial term of two years commencing November 1, 2007 and was  terminated on September 30,   2009. During the year ended December 31, 2009, the Company paid or accrued  development fees to Syntec Biofuel Research for $72,751 (2008 - $343,715). The  balance has been expensed in the consolidated statements of operations as  development fees.

On  September 25, 2009,  and as amended on October 9,   2009, the Company entered into a Collaborate Research Agreement  (the “Research Agreement”) with the University   of British Columbia  (“UBC”) whereby UBC will perform research and testing of the Company's  catalyst. Pursuant to the Research Agreement, the Company will pay UBC the  following consideration, which is expensed as development fees:
- $10,836 (CDN $10,375) upon execution of the Research  Agreement (paid);
- CDN $14,000 on January   15, 2010. Subsequent to December 31, 2009, the Company is in negotiations with UBC  in settlement of this payment;
- CDN $14,000 on receipt of progress report for year 1;
- CDN $10,375 on October   15, 2010;
- CDN $14,000 on January   15, 2011; and
- CDN $14,000 on receipt of final report.

The  Company is also obligated to donate laboratory equipment, currently owned by  the Company, with an approximate value of CDN  $150,000 to UBC. Ownership of the laboratory equipment will transfer in August  2010, if the Research Agreement is not terminated. The Research Agreement can  be terminated upon 30 days written notice. 

21

----

**Note 4             Equipment**

| ** **                                                                 |   | Cost                                                                            |   |   | Accumulated    Depreciation                                                                                 |   |   | Sales and    write-offs                                                                                                                                              |   |   | December 31, 2009    Net    Book Value                                                                                                                                                             |   |   | December     31, 2008     Net    Book Value                                                                                                 |
|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
| Computer    equipment                                                      | $      |            6,907              |   | $      | 3,356                                                                                                       |   | $      | (3,551)                                                                                                                                                              |   | $      | -                                                                                                                                                                                                  |   | $      | 4,439                                                                                                                                       |
| Office    equipment                                                        |   |            15,416             |   |   |                 5,875            |   |   | (9,541)                                                                                                                                                              |   |   |                                  - |   |   |                        11,597 |
| Laboratory    equipment                                                    |   |          245,395                        |   |   |               98,973                       |   |   | (10,056)                                                                                                                                                             |   |   |                       136,366                                                             |   |   |                      194,414            |
| Equipment under                capital lease |   |              55,486 |   |   |                      22,194 |   |   |                         -     |   |   |                         33,292                                                  |   |   |                        44,389      |
|                                                                       |   |                                                                            |   |   |                                                                                                        |   |   |                                                                                                                                                                 |   |   |                                                                                                                                                                                               |   |   |                                                                                                                                        |
|                                                                       | $      | 323,204                                                                         |   | $      | 130,398                                                                                                     |   | $      | ( 23,148)                                                                                                                                                            |   | $      | 169,658                                                                                                                                                                                            |   | $      | 254,839                                                                                                                                     |

> 
During  the year, the Company wrote-off computer, office and lab equipment in the  amount of $14,237 and sold lab equipment with a net book value of $8,911 for proceeds  of $2,636.

 The  Company leases laboratory equipment under capital lease that expires in fiscal  2010. At December 31, 2009,  the Company has recorded the obligation under capital lease of $10,634 (2008 -  $16,411) as the current portion and $Nil (2008 - $9,175) as the long-term  portion. The capital lease has an effective interest rate of 15%. Minimum lease  payments under this agreement in future fiscal years are as follows:

Fiscal Year Ending December 31, 2010

| Lease payment                           | $      | 11,107      |
|-----------------------------------------|--------|-------------|
| Amount representing    interest         |   |  (473) |
| Total obligation under    capital lease | $      | 10,634      |

**Note 5       Related Party Transactions**

> 
During the year ended December 31, 2009, the  Company incurred management fees of $217,165 (2008 - $331,647) which were charged by directors and officers and a  company controlled by a director and officer of the Company. 

During the  year ended December 31,   2009, the Company incurred rental expense of $21,017 (2008 -  $22,514) which was charged by a company controlled by a director and officer of  the Company.

These transactions were in  the normal course of operations and were measured at the exchange amount, which  was the amount of consideration established and agreed to by the related  parties. 

As at December 31, 2009, an amount of  $175,500 (2008 – $79,118) is owing to directors and officers of the Company.  This amount is unsecured, non-interest bearing and has no set terms of  repayment.

 The Company also has the  following notes payable to related parties:

a) During the year ended December   31, 2008 the Company had received $246,300 (CDN  $300,000) from CAJ Business  Solutions Ltd. (“CAJ”), (formerly  Impulse Advertising Ltd.), a company controlled by the spouse of a director and  officer of the Company. 

22

----

**Note  5       Related Party Transactions** (cont'd) 

> 
a)   cont'd

The loan bears interest at  10% per annum and is secured by a 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 and accrued interest is payable by the Company on June 30, 2010, with  extension fees of 10% of the capital debt.

In fiscal 2008, in consideration for extending the  loan, CAJ received one fully paid,  worldwide, single use, royalty free, non-exclusive license for use of the  Company's intellectual property. The fair value of the license is  undeterminable. 

Included  in the due to related parties balance at December 31, 2008 is the principal amount of  $246,300 (CDN $300,000) and  accrued interest of $13,158.

During  the year ended December 31,   2009, the Company was charged an additional $27,382 in interest and  $52,542 in financing fees. The Company also repaid $44,402 (CDN $53,472) of the principal balance in addition  to $93,082 in accrued interest and financing fees. The Company recorded a  foreign exchange loss of $32,673 on the CAJ  loan at December 31, 2009. 

 Included  in the due to related parties balance at December 31, 2009 is the principal amount of  $234,571 (CDN - $246,528) and  accrued interest of $3,456. 

b) During the year  ended December 31, 2009, the Company received loans from TargetBar Marketing  Inc. (“TargetBar”), a company controlled by a director and officer of the  Company, in the amount of $166,512 (CDN  $175,000) comprised of:
- $95,150 (CDN  $100,000) received on March   13, 2009; 
- $47,574 (CDN  $50,000) received on April   14, 2009; and  
- $23,788 (CDN  $25,000) received on June   19, 2009.

These loans are unsecured and bear interests ranging  from 8% to 10% per annum. Repayment of the principal and accrued interest is  payable by the Company on June   30, 2010, with extension fees of 10% of the capital debt.

TargetBar has the option to convert the $95,150 note  payable, pursuant to a Convertible Promissory Note (the “Convertible Note”), at  any time during the initial term of the Convertible Note which was due on August 31, 2009, into  common shares of the Company at $0.25 per share. The Company recognized the  intrinsic value of the embedded beneficial conversion feature of $15,718 as  additional paid-in capital and an equivalent discount which was expensed to  finance charges during the current year. 

The Company paid finance fees to TargetBar of 10% of  the principal balance owing for the above extension fees.

23

----

**Note  5       Related Party Transactions** (cont'd) 

> 
b)   cont'd

Included in the due to related parties balance at December 31, 2009 is the  principal amount of $166,512 (CDN  $175,000) and accrued interest and finance charges of $28,963.

c) As of December 31, 2009, the  Company had received loans from Iris International Holdings Limited (“Iris”), a  significant shareholder of the Company, in the amount of $341,500 (2008 -  $141,500) comprised of:
- $56,500 received on July 26, 2006;
- $85,000 received on September 28, 2006; 
- $100,000 received on January 7, 2009; and
- $100,000 received on January 20, 2009. 

These loans are unsecured and bear interests ranging  from 5% to 10% per annum. Repayment of the principal and accrued interest is  payable by the Company on June   30, 2010, with extension fees of 10% of the capital debt. 

During the year ended December 31, 2009, in consideration for  extending the loans, Iris received one fully paid, worldwide, single use,  royalty free, non-exclusive license for use of the Company's intellectual  property. The fair value of the license is undeterminable. 

Included in the due to related parties balance at December 31, 2009 is the  principal amount of $341,500 (2008 - $141,500) and accrued interest and  extension fees of $156,574 (2008 - $60,322).

d)   During  the year ended December 31,   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 and bears interest at  10% per annum. Repayment of the principal and accrued interest was payable by  the Company on April 30,   2009, with extension fees of 10% of the capital debt. 

Included in the due to related parties balance at December 31, 2008 was the  principal amount of $18,473 and accrued interest and loan fees of $2,338. During  the year ended December 31,   2009, the Company repaid the principal, accrued interest and loan  fees of $20,811. 

**Note 6       Notes Payable**

> 
a) As of December   31, 2009, the Company had received loans from Montilla Capital  Inc.(“Montilla”), totaling $165,561 (CDN  $174,000) (2008 - $44,334) comprised of:
- $51,381 (CDN  $54,000) received on May 21,   2008;
- $57,090 (CDN  $60,000) received on July   29, 2009; and 
- $57,090 (CDN  $60,000) received on November   25, 2009.

24

----

**Note  6       Notes Payable** (cont'd)

> 
a)   cont'd

These loans are unsecured and bear interests ranging  from 5% to 10% per annum. Repayment of the principal and accrued interest is  payable by the Company on June   30, 2010, with extension fees of 10% of the capital debt. 

During the year ended December 31, 2009, in consideration for extending  the due date of the $51,381 loan, Montilla received one fully paid, worldwide,  single use, non-exclusive license for use of the Company's intellectual  property which is subject to a royalty fee of 1.5% of sales. The fair value of  the license is undeterminable. 

Management has recognized that the interest rate on the notes payable  to Montilla are below fair market value, and has recorded a discount on the  funds received from Montilla during the year ended December 31, 2009 of $2,620. 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, 2009, the  carrying value of the notes payable has been accreted to its face value and  $2,620 was expensed as finance charges. 

Included in the notes payable balance at December 31,  2009 is the principal amount of $165,561 (2008 – 44,334) and accrued interest  and financing fees of $21,264 (2008 - $7,166).

b)   As of December 31, 2009, the  Company had received loans totaling $144,000 (2008 - $144,000) from Hokley Limited (“Hokley”) comprised of:
- $4,000 received on August 4, 2004;
- $5,000 received on September 24, 2004;
- $5,000 received on December 23, 2004;
- $40,000 received on February 26, 2007;
- $30,000 received on May 28, 2007;
- $30,000 received on July 18, 2007, and
- $30,000 received on September 26, 2007.

These loans are unsecured and bear interests ranging  from 5% to 10% per annum. Repayment of the principal and accrued interest is  payable by the Company on June   30, 2010, with extension fees of 10% of the capital debt. 

During the year ended December 31, 2009, in consideration for  extending the due date of the loans, Hokley received one fully paid, worldwide,  single use, non-exclusive license for use of the Company's intellectual  property which is subject to a royalty fee of 1.5% of sales. The fair value of  the license is undeterminable. 

Management recognized that the interest rate on the notes payable from  Hokley are below fair market value, and recorded a discount on the funds  received from Hokley during fiscal 2007. As of December 31, 2008, the carrying value of the  notes payable had been accreted to its face value over the original term of the  notes payable.

Included in the notes payable balance at December 31, 2009 is the principal amount of  $144,000 (2008 - $144,000) and accrued interest and financing charges of  $80,778 (2008 - $42,658). 

25

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**Note 7      ****Common Stock**

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

b) During the year ended December 31, 2009, the  Company completed a private placement of 1,933,333 common shares for total  proceeds of $145,000 and issued 110,000 common shares for consulting fees at a  fair value of $9,600. 

**Note 8       Supplemental  Cash Flow Information**

|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   | March 15,             |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|--------|--------|--------|--------|-----------------------|--------|
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   | 2000                  |   |
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   | (Date of              |   |
|                                                                                                                                                                                                                          |   | Year ended                       |   |   |   |   |   | Inception)            |   |
|                                                                                                                                                                                                                          |   | December 31,                     |   |   |   |   |   | December 31,          |   |
|                                                                                                                                                                                                                          |   | 2009                             |   |   | 2008   |   |   | 2009      (Unaudited) |   |
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   |                  |   |
| Cash paid for:                                                                                                                                                                                                                |   |                             |   |   |   |   |   |                  |   |
|          Income    taxes                                                                                                                                                              | $      |       - |   | $      | -      |   | $      |   -              |   |
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   |                  |   |
|          Interest                                                                                                                                                                     | $      | 40,540                           |   | $      | -      |   | $      | 40,540                |   |
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   |                  |   |
| Non-cash investing    activities::                                                                                                                                                                                            |   |                             |   |   |   |   |   |                  |   |
|          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             |   |
|          Debt    assumed on acquisition of assets                                                                                                                                     | $      | -                                |   | $      | -      |   | $      | 350,000               |   |
|                                                                                                                                                                                                                |   |                             |   |   |   |   |   |                  |   |
| Non-cash financing    activities:                                                                                                                                                                                             |   |                             |   |   |   |   |   |                  |   |
|          Equipment acquired under capital lease                                                                                                                                       | $      | -                                |   | $      | -      |   | $      | 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)       |   |
|                                                                                                                                                                                                                          |   |                             |   |   |   |   |   |                  |   |

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

26

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**Note 9       Income  Taxes**

> 
The parent Company is subject to income taxes in the US and its wholly-owned subsidiary is subject to income taxes in Canada. As of December 31, 2009, both the Company and its subsidiary had accumulated non-capital loss carry-forwards of approximately $2,860,000 of which $2,035,000 pertained to the US and $825,000 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, 2009 and 2008, 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:

|                                   |   |      |   |   |      |   |
|----------------------------------------|--------|-----------|--------|--------|-----------|--------|
|                                   |   | 2009      |   |   | 2008      |   |
|                                   |   |      |   |   |      |   |
| Non-capital tax    loss carry forwards | $      | 2,860,000 |   | $      | 2,110,000 |   |
| Statutory tax rate                     |   | 30%       |   |   | 30%       |   |
| Effective tax rate                     |   | -         |   |   | -         |   |
| Deferred tax asset                     |   | 858,000   |   |   | 633,000   |   |
| Change in valuation    allowance       |   | (858,000) |   |   | (633,000) |   |
| Net deferred tax    asset              | $      |  -   |   | $      |  -   |   |

|                            |   | 2009      |   |   | 2008      |   |
|---------------------------------|--------|-----------|--------|--------|-----------|--------|
||
| Net    loss before income taxes | $      | 839,512   |   | $      | 1,301,740 |   |
| Non-deductible    items         |   | (89,512)  |   |   | (30,162)  |   |
|                            |   | 750,000   |   |   | 1,271,578 |   |
| Statutory    tax rate           |   | 30%       |   |   | 30%       |   |
| Deferred    tax asset           |   | 225,000   |   |   | 381,473   |   |
| Valuation    allowance          |   | (225,000) |   |   | (381,473) |   |
|                            | $      | -         |   | $      | -         |   |

> 
The Company performed a comprehensive review of its portfolio of uncertain tax positions which is represented by 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.

27 

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**Note  10                 Subsequent Events**

> 
The Company has evaluated all subsequent  events to the date of filing. Subsequent to December 31, 2009, the Company entered into the  following transactions:

a) On February 10, 2010, the Company entered  into a consulting agreement with 3rd parties for investor relations  services. In exchange, the Company will issue one of the 3rd parties  500,000 free trading common shares. The Company was unable to issue 500,000  free trading common shares. Therefore, the other 3rd party was  obligated, pursuant to the consulting agreement, to issue the shares on behalf  of the Company in exchange for the issuance of 600,000 restricted common shares  of the Company. 

b) On March 1, 2010, the Company entered into an  agreement of understanding with a 3rd party who will act as the  placement agent and financial advisor to the Company in connection with a  private placement of equity and debt securities. In consideration, the Company  will pay the 3rd party:
- $5,000  advisory fee upon execution of the agreement (paid);
-  A  success fee of 8% of the gross proceeds of the private placement and 2% of  total funds raised outside of the services provided by the 3rd  party; 
- Non-callable  warrants equal to 8% of the total number of securities sold under the private  placement and 2% of total funds raised outside of the services provided by the  3rd party. The placement warrants will entitle the holder to  purchase securities of the Company at a purchase price equal to the implied  price per share of the private placement and shall be exercisable for a period  of 5 years. 

The agreement will terminate on March 1, 2011 or within 30 days of written  notice. 

28

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

There  have been no changes in Accountants in the two most recent fiscal years and no  disagreements with Accountants on accounting and financial disclosure.  The fiscal years ended December 31, 2009, 2008, 2007 and 2006  were audited by Dale Matheson Carr-Hilton LaBonte LLP.  

**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, 2009, 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, 2009 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 

29

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operation of our internal controls over financial  reporting that adversely affected our internal controls and that may be  considered to be material weaknesses. 

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. 

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, 2009  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, 2009 was  reported on Form 8-K.****

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**PART  III**

**Item  10. Directors, Executive Officers and Corporate Governance.**

| **Name**                        | **Age** | **Title**                                                                      |
|---------------------------------|---------|--------------------------------------------------------------------------------|
| Michael Jackson1 

Janet Cheng2 | 69

 39 | Chief    Executive Officer and Director 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.  

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.

31

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**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 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.                                                                                                                                                                                                                                             |

|   | (3)    | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | (4)    | 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;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | (5)    | 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.

However, Michael Jackson  was charged and pleaded guilty under section 239(1) of the Income Tax Act on  December 10, 2009 for failing to disclose capital gain from a 2005 transaction to  the Canadian Revenue department, Mr Jackson share of the capital gain earned  from the sale of a software program in Gibraltar amounted to approx.  US$1,225,000 which was not taxable in Gibraltar nor repatriated to Canada.  

No other director, executive officer or control person  were convicted in a criminal proceeding or named subject to a pending criminal  proceeding (excluding traffic violations and other minor offenses). |

**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,  2009, 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).

32

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**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 Jackson1       Chairman, President       | 2007      2008      2009 | -      -        | -      -       |                  |              | -      -                                   |                                                                                 | 44,528      144,240      144,000 | 44,528      144,240      144,000 |
| George Kosanovich2       Chief Executive officer | 2007      2008           | -               | -              |                  |              | -                                          |                                                                                 | 39,750      104,586              | 39,750      104,586              |
| Janet Cheng3       Chief Financial    Officer    | 2007      2008      2009 | -               | -              |                  |              | -                                          |                                                                                 | 12,000      38,720      26,781   | 12,000      38,720      26,781   |

1 Mr. Jackson  was elected as officer and director in March 2000.  Michael Jackson became Chief Executive  Officer on October 15, 2008 2 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****3 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, 2009, 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                                                                                    | 3,350,840               | 9.35%                |
| Ryerson Corporation A.V.V. 1      c/o 7 Abraham de Veerstraat      P.O. Box 840, Curacao      Netherlands Antilles | 9,055,000               | 25.27%               |
| Iris International      Le Montaigne      7 Avenue de    Grande-Bretagne      MC 98000 Monaco.                     | 5,663,000               | 15.80%               |
| Wood Energy Resources LLC      8159 Titleist      Drive       Pineville, LA 71360                                  | 4,697,872               | 13.11%               |
| Montilla Capital Inc.       c/o 7 Abraham de Veerstraat      P.O. Box 840, Curacao      Netherlands Antilles       | 2,794,013               | 7.80%                |
| Michael Jackson      Director and President                                                                        | 814,000      9,937,0001 | 2.27%      25.27%    |
| All Executive Officers and Directors as a Group                                                                    | 10,751,000              | 30.18%               |

1  Michael Jackson is the controlling shareholder of Ryerson Corporation  A.V.V. and has indirect control over a further 882,000 owned directly and  indirectly by family members. He is the President,  Secretary, Treasurer and Chairman of the Board of Syntec Biofuel Inc. 

33

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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 June 30,   2010.  Carol   Jackson, spouse of Michael Jackson,  President of our Company, is the President of CAJ  Business Solutions Ltd. 

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

**Item  14. Principal Accounting Fees and Services.**

**1. Audit Fees**

The aggregate fees paid for 2009  fiscal year for professional services rendered by the principal accountant, Dale Matheson Carr-Hilton LaBonte LLP Chartered Accountants  (“DMCL”) for the audit of our annual financial statements and review of  financial statements included in our Form 10-Q and 10-K are as follows: 

|                  | 2009                       | 2008    |
|-----------------------|----------------------------|---------|
| DMCL    audit         | $25,000-28,000 (estimated) | $26,250 |
| DMCL    audit-related | $14,700                    | $13,913 |

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**2. Audit-Related Fee**

There were no additional  aggregate fees billed in each of the last two fiscal years for assurance and  related services by  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. 

**3. Tax Fees**

There were no additional  aggregate fees billed in each of the last two fiscal years for professional  services rendered by  Dale Matheson Carr-Hilton  LaBonte LLP, Chartered Accountants, for tax compliance, tax advice and tax planning. 

**4. All Other Fees**

There were no additional aggregate fees billed in each of the last two fiscal years for products and  services provided  Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, other than the services reported in Item 9(e)(1) through 9(e)(3) of  Schedule 14A.

**PART  IV**

**Item  15. Exhibits, Financial Statement Schedules.**

**Financial Statements**

 Included in Part II, Item 8 

**Financial Statement Schedule**

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

**Exhibits**

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

| **Exhibit Number** | **Description    of Exhibit**                                                                               |
|--------------------|-------------------------------------------------------------------------------------------------------------|
|               |                                                                                                        |
| 3.1                | Amended    and Restated Articles of Incorporation dated July 26, 2006 (1)                                   |
|               |                                                                                                        |
| 3.2                | Amended and Restated Bylaws dated July 12, 2006 (1)                                                         |
|               |                                                                                                        |
| 4.1                | Specimen    Stock Certificate for Shares of Common Stock of the Company (2)                                 |
|               |                                                                                                        |
| 10.1               | License    Agreement (3)                                                                                    |
|               |                                                                                                        |
| 10.2               | Assignment    of License Agreement (3)                                                                      |
|               |                                                                                                        |
| 10.3               | Settlement    Agreement (4)                                                                                 |
|               |                                                                                                        |
| 10.4               | Manufacturing    Agreement (4)                                                                              |
|               |                                                                                                        |
| 10.5               | Acquisition    Agreement of the URL (5)                                                                     |
|               |                                                                                                        |
| 10.6               | Asset    Purchase and Assignment Agreement (6)                                                              |
|               |                                                                                                        |
| 10.7               | Amendment    to Asset Purchase and Assignment(7)                                                            |
|               |                                                                                                        |
| 10.8               | **Intellectual Property    And Asset Purchase Agreement dated September 28, 2007**(8)                       |
|               |                                                                                                        |
|               | Amendment To Intellectual Property And Asset    Purchase dated October     25, 2007 (9)                     |
|               |                                                                                                        |
| 10.9               | General Security Agreement dated June 20, 2008 (10)                                                         |
|               |                                                                                                        |
| 21.1               | List of Subsidiaries                                                                                        |
|               |                                                                                                        |
| 31.1               | 302 Certification for the Chief Executive Officer                                                           |
|               |                                                                                                        |
| 31.2               | 302 Certification for the Chief Financial Officer                                                           |
|               |                                                                                                        |
| 32.1               | Certificate    of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.    Section 1350 |

> 
(1) Filed on March 18, 2009  as an exhibit to the Company's report on Form 10-K and incorporated herein by  reference    (2) Filed on October 6, 2000  as an exhibit to the Company's report on Form SB-2 and incorporated herein by  reference    (3) Filed on October 10,   2000 as an exhibit to the Company's report on Form SB-2/A and  incorporated herein by reference    (4) Filed on January 29,   2001 as an exhibit to the Company's report on Form SB-2/A and  incorporated herein by reference    (5) Filed on January December   16, 2003 as an exhibit to the Company's report on Form SB-2/A and  incorporated herein by reference    (6) Filed on April 12, 2006  as an exhibit to the Company's report on Form 8-K and incorporated herein by  reference    (7) Filed on July 17, 2006  as an exhibit to the Company's report on Form 8-K and incorporated herein by  reference    (8) Filed on October 1, 2007  as an exhibit to the Company's report on Form 8-K and incorporated herein by  reference    (9) Filed on October 25,   2007 as an exhibit to the Company's report on Form 8-K/A and  incorporated herein by reference    (10) Filed on June 26, 2008  as an exhibit to the Company's report on Form 8-K and incorporated herein by  reference

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**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 31, 2010 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|
|                                                                                                                                                        |                    |
| * *                                                                                                                                                    |                    |
| */s/ Janet Cheng                       * | Date:    March 31, 2010 |
| Janet Cheng       Director,    CFO                                                                                                                          |                    |

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