U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                             Quarterly Report Under
                       the Securities Exchange Act of 1934

                        For Quarter Ended: June 30, 2006

                        Commission File Number: 000-51564

                              NORTHERN ETHANOL, INC
                              ---------------------
        (Exact name of small business issuer as specified in its charter)

                                    Delaware
                                    --------
                           State or other jurisdiction
                                of incorporation)

                                   34-2033194
                                   ----------
                              (IRS Employer ID No.)


                              193 King Street East
                                    Suite 300
                        Toronto, Ontario, M5A 1J5, Canada
                        ---------------------------------
                    (Address of principal executive offices)

                                 (416) 366-5511
                           (Issuer's Telephone Number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing  requirements  for the past 90 days: Yes
  X     No      .
-----      -----

The number of shares of the  registrant's  only class of common stock issued and
outstanding as of August 14, 2006, was 102,751,500 shares.

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

                                                                               1

<PAGE>

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS.


NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)



TABLE OF CONTENTS
--------------------------------------------------------------------------------




                                                                     Page

UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS:

     Consolidated Balance Sheet                                      F-1
     Consolidated Statements of Operations - 6 months                F-2
     Consolidated Statements of Operations - 3 months                F-3
     Consolidated Statement of Stockholders' Equity                  F-4
     Consolidated Statements of Cash Flows - 6 months                F-5 to F-6
     Consolidated Statements of Cash Flows - 3 months                F-7 to F-8
     Notes to Unaudited Consolidated Interim Financial Statements    F-9 to F-16



        See notes to unaudited consolidated interim financial statements

                                                                               2
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                                      Consolidated Balance Sheet



<CAPTION>
   As at:                                             June 30, 2006     December 31, 2005
                                                         (Unaudited)            (Audited)
-----------------------------------------------------------------------------------------
<S>                                                  <C>                   <C>
ASSETS

CURRENT ASSETS:
Cash and cash equivalents                            $     101,479         $     13,390
Accounts receivable                                         33,659                    -
Deposits                                                   750,000                    -
Prepaid expenses                                           273,930               10,250
                                                     -------------         ------------
    Total current assets                                 1,159,068               23,640

Property and equipment  (note 3)                           155,011                    -
Capital lease  (note 7)                                 16,761,565                    -
                                                     -------------         ------------
                                                     $  18,075,644         $     23,640
                                                     =============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable                                      $     72,334          $     2,000
Accrued expenses                                             6,698                3,098
                                                     -------------         ------------
    Total current liabilities                               79,032                5,098

Obligation under capital lease  (note 7)                16,761,565                    -
                                                     -------------         ------------
                                                        16,840,597                5,098
                                                     -------------         ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value;
   100,000,000 shares authorized;
   none issued and outstanding (note 6)                          -                    -
Common stock, $.0001 par value;
  250,000,000 shares authorized; 100,700,000
  shares issued and outstanding  (note 6)                   10,070               10,150
Additional paid-in capital  (note 6)                     2,197,324               39,865
Deficit accumulated during the development stage          (967,875)             (31,473)
Accumulated comprehensive income                            (4,472)                   -
                                                     -------------         ------------
                                                         1,235,047               18,542
                                                     -------------         ------------
                                                    $   18,075,644           $   23,640
                                                     =============         ============
</TABLE>

        See notes to unaudited consolidated interim financial statements


                                       F-1

                                                                               3
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                           Consolidated Statements of Operations
                                                                     (Unaudited)

----------=----------------------------------------------------------------------

<CAPTION>
                                            Six Months ended June 30      Nov 29, 2004
                                          ---------------------------     (Inception)
                                              2006            2005      to June 30, 2006
                                          -----------     -----------    ----------------
<S>                                       <C>             <C>            <C>
REVENUES                                  $        --     $        --    $             --

 COST OF GOODS SOLD                                --              --                  --
                                          -----------     -----------    ----------------
                       GROSS MARGIN                --              --                  --

OPERATING EXPENSES
     Salaries and benefits  (note 5)          755,352              --             755,352
     General and administrative               161,858           5,279             193,331
     Occupancy costs                           13,905              --              13,905
                                          -----------     -----------    ----------------
                                              931,115           5,279             962,588

Depreciation                                    5,287              --               5,287
                                          -----------     -----------    ----------------
NET LOSS                                  $   936,402     $     5,279    $        967,875
                                          ===========     ===========    ================


BASIC AND DILUTED LOSS PER SHARE          $     (0.01)    $     (0.00)
                                          ===========     ===========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING                        101,097,790     101,500,000
                                          ===========     ===========


</TABLE>





        See notes to unaudited consolidated interim financial statements

                                       F-2

                                                                               4
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                           Consolidated Statements of Operations
                                                                     (Unaudited)

--------------------------------------------------------------------------------


<CAPTION>
                                     Three Months ended June 30    Nov 29, 2004
                                      ------------------------      (Inception)
                                           2006        2005      to June 30, 2006
                                      -----------  -----------   ----------------
<S>                                   <C>          <C>           <C>
REVENUES                              $         -  $         -   $              -

 COST OF GOODS SOLD                             -            -                  -
                                      -----------  -----------   ----------------
                       GROSS MARGIN             -            -                  -

OPERATING EXPENSES
     Salaries and benefits  (note 5)      755,352            -            755,352
     General and administrative           152,410        2,500            193,331
     Occupancy costs                       13,905            -             13,905

                                      -----------  -----------   ----------------
                                          921,667        2,500            962,588

Depreciation                                5,287            -              5,287

                                      -----------  -----------   ----------------
NET LOSS                              $   926,954  $     2,500   $        967,875
                                      ===========  ===========   ================

BASIC AND DILUTED LOSS PER SHARE      $     (0.01) $     (0.00)
                                      ===========  ===========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING                    100,700,000  101,500,000
                                      ===========  ===========


</TABLE>




        See notes to unaudited consolidated interim financial statements

                                       F-3

                                                                               5
<PAGE>



<TABLE>
-------------------------------------------------------------------------------------------------------------------
                                                                                             Northern Ethanol, Inc.
                                                                                      (A DEVELOPMENT STAGE COMPANY)
                                                                                    (Formerly BEACONSFIELD I, INC.)

                                                                     Consolidated Statement of Stockholders' Equity
                                                                                                        (Unaudited)

-------------------------------------------------------------------------------------------------------------------

<CAPTION>
                                       Common Stock
                              ------------------------------     Additional                      Accumulated
                                                                   Paid-in       Accumulated    Comprehensive
                                  Shares           Amount          Capital         Deficit       Income (Loss)        Total
                              -------------    -------------    -------------   -------------    -------------    -------------
<S>                           <C>              <C>              <C>             <C>              <C>              <C>
Inception, November 29,                  --    $          --    $          --   $          --    $          --    $          --
  Stock issued for cash        101, 500,000           10,150           39,865              --               --           50,015
Net loss for the period
November 29, 2004
(Inception)  to December                 --               --               --          (3,708)              --           (3,708)
31, 2004
                              -------------    -------------    -------------   -------------    -------------    -------------
Balances, December 31, 2004     101,500,000           10,150           39,865          (3,708)              --           46,307

Net loss for the year ended              --               --               --         (27,765)              --          (27,765)
December 31, 2005
                              -------------    -------------    -------------   -------------    -------------    -------------
Balances, December 31, 2005     101,500,000          10, 150           39,865         (31,473)              --           18,542

Shares cancelled  (note 6)         (800,000)             (80)              80              --               --               --
Options issued for services              --               --          657,379              --               --          657,379
Proceeds of sales under
unit subscription
agreements, net of fees                  --               --        1,500,000              --               --        1,500,000
Cumulative translation                   --               --               --              --           (4,472)          (4,472)
adjustment
Net (loss) for the six
months ended June 30, 2006               --               --               --        (936,402)              --         (936,402)
(unaudited)
                              -------------    -------------    -------------   -------------    -------------    -------------
Balances, June 30, 2006         100,700,000    $      10,070    $   2,197,324   $    (967,875)   $      (4,472)   $   1,235,047
(unaudited)                   =============    =============    =============   =============    =============    =============


</TABLE>








        See notes to unaudited consolidated interim financial statements

                                       F-4

                                                                               6
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                                        Statements of Cash Flows
                                                                     (Unaudited)
--------------------------------------------------------------------------------
<CAPTION>
                                                                         Six Months           Nov 29, 2004
                                                                       Ended June 30           (Inception)
                                                                 --------------------------     to June 30
                                                                     2006          2005            2006
                                                                 -----------    -----------    -----------
<S>                                                              <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                                       $  (936,402)   $    (5,279)   $  (967,875)

Items not involving cash:
       Depreciation                                                    5,287             --          5,287
       Stock-based compensation                                      657,379             --        657,379

Changes in non-cash working capital balances:
       Accounts receivable                                           (33,659)            --        (33,659)
       Deposits                                                     (750,000)            --       (750,000)
       Prepaid expenses                                             (263,680)            --       (263,680)
       Accounts payable                                               70,334             --         72,334
       Accrued liabilities                                             3,600            (94)         6,698
       Other                                                          (4,472)         4,641        (14,722)
                                                                 -----------    -----------    -----------

Net cash (used in) provided by operating activities               (1,251,613)          (732)    (1,288,238)

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from issuance of common stock                             --             --         50,015
       Unit subscriptions, received in advance,
       (net of fees)                                               1,500,000             --      1,500,000
                                                                 -----------    -----------    -----------
Net cash (used in) provided
by financing activities                                            1,500,000             --      1,550,015

</TABLE>








        See notes to unaudited consolidated interim financial statements

                                       F-5

                                                                               7
<PAGE>


<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                                        Statements of Cash Flows
                                                                     (Unaudited)
--------------------------------------------------------------------------------
<CAPTION>
                                                                           Six Months              Nov 29, 2004
                                                                          Ended June 30             (Inception)
                                                                   ----------------------------     to June 30
                                                                        2006            2005           2006
                                                                   ------------    ------------    ------------
<S>                                                                <C>             <C>             <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) of capital assets                                           (160,298)             --        (160,298)
                                                                   ------------    ------------    ------------
Net cash (used in) provided
by investing activities                                                (160,298)             --        (160,298)
                                                                   ------------    ------------    ------------

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS                                                     88,089            (732)        101,479

CASH AND CASH EQUIVALENTS:
Beginning of period                                                      13,390          37,515              --
                                                                   ------------    ------------    ------------
End of period                                                      $    101,479    $     36,783    $    101,479
                                                                   ============    ============    ============

SUPPLEMENTAL CASH FLOW
 INFORMATION
         Assets  acquired  under capital lease                     $ 16,761,565    $         --    $ 16,761,565
         Cash paid for income taxes                                          --              --             353

</TABLE>










        See notes to unaudited consolidated interim financial statements


                                       F-6

                                                                               8
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                                        Statements of Cash Flows
                                                                     (Unaudited)
--------------------------------------------------------------------------------
<CAPTION>
                                                                 Three Months          Nov 29, 2004
                                                                Ended June 30          (Inception)
                                                         --------------------------     to June 30
                                                             2006           2005           2006
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)                                               $  (926,954)   $    (2,500)   $  (967,875)

Items not involving cash:
       Depreciation                                            5,287             --          5,287
       Stock-based compensation                              657,379             --        657,379

Changes in non-cash working capital balances:
       Accounts receivable                                   (33,659)            --        (33,659)
       Deposits                                             (750,000)            --       (750,000)
       Prepaid expenses                                     (266,805)            --       (263,680)
       Accounts payable                                       72,334             --         72,334
       Accrued liabilities                                        --           (353)         6,698
       Other                                                  (4,472)         2,141        (14,722)
                                                         -----------    -----------    -----------

Net cash (used in) provided by operating activities       (1,246,890)          (712)    (1,288,238)

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from issuance of common stock                     --             --         50,015
       Unit subscriptions, received in advance,
       (net of fees)                                       1,500,000             --      1,500,000
                                                         -----------    -----------    -----------
Net cash (used in) provided
by financing activities                                    1,500,000             --      1,550,015


</TABLE>

        See notes to unaudited consolidated interim financial statements


                                       F-7

                                                                               9
<PAGE>

<TABLE>
--------------------------------------------------------------------------------
                                                          Northern Ethanol, Inc.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                                 (Formerly BEACONSFIELD I, INC.)

                                                        Statements of Cash Flows
                                                                     (Unaudited)
--------------------------------------------------------------------------------
<CAPTION>
                                                      Three Months             Nov 29, 2004
                                                      Ended June 30             (Inception)
                                               ----------------------------     to June 30
                                                   2006             2005           2006
                                               ------------    ------------    ------------
<S>                                            <C>             <C>             <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) of capital assets                       (160,298)             --        (160,298)

                                               ------------    ------------    ------------
Net cash (used in) provided
by investing activities                            (160,298)             --        (160,298)
                                               ------------    ------------    ------------

NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS                                 92,812            (712)        101,479

CASH AND CASH EQUIVALENTS:
Beginning of period                                   8,667          37,495              --

                                               ------------    ------------    ------------
End of period                                  $    101,479    $     36,783    $    101,479
                                               ============    ============    ============

SUPPLEMENTAL CASH FLOW
 INFORMATION
         Assets acquired under capital lease   $ 16,761,565    $         --    $ 16,761,565
         Cash paid for income taxes                      --              --             353


</TABLE>










        See notes to unaudited consolidated interim financial statements


                                       F-8

                                                                              10
<PAGE>


NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


1. ORGANIZATION AND OPERATIONS

Beaconsfield I, Inc. (the "Company"),  a development  stage company,  located in
Toronto,  Canada,  was  incorporated  in Delaware  on November  29, 2004 for the
purpose  of  engaging  in the  potential  future  merger  or  acquisition  of an
unidentified target business. Since its inception, the Company's operations have
primarily included raising capital and the performance of certain administrative
functions.

On December 15, 2004,  the Company issued 150,000 shares of its common stock for
a  total  of  $15  in  cash  in  accordance  with a  Stock  Purchase  Agreement.
Additionally  on that date, the Company issued  10,000,000  shares of its common
stock, for a total of $50,000 in cash.

On April 6, 2006, the Company incorporated Northern Ethanol,  Inc., a 100% owned
subsidiary  under the laws of the State of Delaware.  Effective May 3, 2006, the
Company merged with this subsidiary,  and was the surviving entity. As permitted
by Delaware law, the Company has adopted Northern Ethanol, Inc. as its corporate
name on May 3, 2006. On April 11, 2006, the Company  incorporated two 100% owned
Canadian  subsidiaries,  Northern  Ethanol  (Canada)  Inc. and Northern  Ethanol
(Barrie) Inc.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL STATEMENTS
The  accompanying  interim  financials  statements of the Company as of June 30,
2006,  for the three months ended June 30, 2006 and 2005 and for the period from
November 29, 2004  (Inception) to June 30, 2006 have been prepared in accordance
with accounting  principles  generally accepted for interim financial  statement
presentation  and  in  accordance  with  the  instructions  to  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes  required
by accounting  principles generally accepted in the United States of America for
complete financial  statement  presentation.  In the opinion of management,  all
adjustments  necessary  for a fair  statement of the results of  operations  and
financial position for the interim period presented have been included. All such
adjustments are of a normal recurring nature.  The results of operations for the
three months ended June 30, 2006 are not  necessarily  indicative of the results
to be  expected  for the full year  ended  December  31,  2006.  This  financial
information  should be read in  conjunction  with the financial  statements  and
notes thereto  included in the Company's Form 10-KSB for the year ended December
31, 2005.

Basis of preparation
These unaudited interim consolidated  financial statements have been prepared on
a going concern basis, which assumes that the Company will continue in operation
for the foreseeable  future and  accordingly  will be able to realize its assets
and discharge its  liabilities  in the normal  course of  operations.  Since the
beginning of 2006, the Company has  concentrated  on activities that will enable
it to acquire facilities to produce ethanol. It has had no net earnings, minimal
revenue and negative  operating  cash flows,  and has  financed  its  activities
through the  issuance of shares.  The  Company's  ability to continue as a going
concern  is  dependent  on  obtaining  additional  investment  capital  and  the
achievement of profitable operations. There can be no assurance that the Company
will be  successful  in  increasing  revenue  or raising  additional  investment
capital to generate sufficient cash flows to continue as a going concern.  These
unaudited  interim   consolidated   financial  statements  do  not  reflect  the
adjustments  that might be necessary to the carrying amount of reported  assets,
liabilities and revenue and expenses and the balance sheet  classification  used
if the  Company  were  unable to  continue  operation  in  accordance  with this
assumption.

Certain  items  in the  comparative  statements  have  been  reclassified  to be
consistent with the presentation in the current year.

                                       F-9

                                                                              11
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


Cash and cash equivalents - The Company considers all highly-liquid  investments
with an original maturity of three months or less to be cash equivalents.

Leases - The Company follows the guidance in SFAS No 13 "Accounting for Leases",
which requires the Company to evaluate the leases it signs to determine  whether
they represent operating or capital leases at the inception of the lease.

Stock based  compensation  -  Effective  January 1, 2006,  the  Company  adopted
Financial  Accounting  Standards Board (FASB) Statement of Financial  Accounting
Standard  (SFAS) No. 123R,  "Share Based  Payment".  SFAS 123R requires a public
entity to measure the cost of  employee  services  received  in exchange  for an
award of equity  instruments  based on the  grant-date  fair value of the award.
That cost is recognized  over the period during which an employee is required to
provide  service  in  exchange  for the  award - the  requisite  service  period
(usually the vesting  period).  SFAS 123R  requires that the  compensation  cost
relating  to  share-based  payment   transactions  be  recognized  in  financial
statements.  That  cost is  measured  based on the fair  value of the  equity or
liability instruments issued. .

Foreign  currency  translation - The Company has determined  that the functional
currency of its Canadian  subsidiaries is the Canadian dollar.  All transactions
initiated in Canadian  dollars are  translated  into U.S.  dollars in accordance
with SFAS No. 52 "Foreign Currency Translation" as follows:

     (i) Assets and liabilities at the rate of exchange in effect at the balance
sheet date; and

     (ii) Revenue and expense  items at the average rate of exchange  prevailing
during the period Adjustments  arising from such translations are deferred until
realization  and are included as a separate  component of  stockholders'  equity
(deficiency)  as  a  component  of  comprehensive  income  or  loss.  Therefore,
translation  adjustments  are not included in determining  net income (loss) but
are reported as a component of other comprehensive income (loss).

The  Company  translates  foreign  currency   transactions  into  the  Company's
functional  currency at the exchange rate  effective on the invoice date. If the
exchange rate changes  between the time of purchase and the time actual  payment
is made, a foreign  exchange  transaction gain or loss results which is included
in determining net income for the period.

Income taxes - Deferred income tax assets and liabilities are recognized for the
estimated future tax consequences  attributable to temporary differences between
the financial  statement carrying amounts of existing assets and liabilities and
their respective tax bases, and are measured using enacted tax rates expected to
apply in the years in which  those  temporary  differences  are  expected  to be
recovered or settled.  A valuation  allowance is provided when it is more likely
than not that the full benefit of the deferred tax assets will not be realized.

Use of estimates - The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and liabilities, the reported amounts of revenues and expenses
and the  disclosure of contingent  liabilities.  Actual  results may differ from
these estimates

Earnings  (loss) per common  share - The  Company  computes  net loss per common
share using SFAS No. 128  "Earnings  Per Share."  Basic loss per common share is
computed  based on the weighted  average  number of shares  outstanding  for the
period.  Diluted loss per share is computed by dividing net loss by the weighted
average common shares outstanding  assuming all dilutive potential common shares
were issued.

                                      F-10

                                                                              12
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair  value  of  financial  instruments  - The  carrying  value of cash and cash
equivalents,  other  current  assets,  accrued  expenses  and  accounts  payable
approximates fair value due to the short period of time to maturity.

Property  and  equipment  -  Computer  equipment  is  recorded  at  cost  and is
depreciated on a straight-line basis over its estimated useful life.

Leasehold  improvements are capitalized at cost and amortized on a straight line
basis over the term of the lease.

Depreciation  and  amortization  commences  at the  time  when  the  assets  are
substantially being used in operations.

























                                      F-11

                                                                              13
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)


NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


3.  Property and equipment

--------------------------------------------------------------------------------
                                                        Accumulated    Net book
       June 30, 2006                           Cost    depreciation     value
--------------------------------------------------------------------------------

       Computer equipment and software      $  29,582    $  2,417     $  27,165
       Furniture and equipment                116,982       2,870       114,112
       Leasehold improvements                  13,734           -        13,734
                                            ------------------------------------
                                            $ 160,298    $  5,287     $ 155,011
--------------------------------------------------------------------------------

                                                       Accumulated     Net book
       December 31, 2005                       Cost    depreciation     value
--------------------------------------------------------------------------------

       Computer equipment and software      $       -    $      -     $       -
       Furniture and equipment                      -           -             -
       Leasehold improvements                       -           -             -
                                            ------------------------------------
                                            $       -    $      -     $       -

--------------------------------------------------------------------------------

4.  RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2006, the Company repaid Corsair  Advisors,
Inc.,  an entity owned by a  stockholder,  for advances it had made on behalf of
the Company prior to December 31, 2005.  Additionally,  the Company utilized the
office space and equipment of a stockholder at no cost,  until April 2006,  when
the Company entered into a lease for office space, as further  discussed in Note
6.

Also during April 2006, the Company, through a Canadian subsidiary, entered into
a lease for property to be used as an ethanol  processing  facility,  as further
discussed in Note 6. These  leases were  entered into with an entity  affiliated
with a stockholder of the Company.










                                      F-12

                                                                              14
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)


NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

5.  Stock Options

On April 12, 2006,  pursuant to an  employment  agreement,  the Company  granted
options to purchase an  aggregate of 2,000,000  shares of the  Company's  common
stock at an exercise price equal to $1.00, to its Chief Executive  Officer.  The
options vest in equal  amounts each quarter over 2 years.  The options  expire 5
years following the date of grant.

On April 21, 2006,  pursuant to an  employment  agreement,  the Company  granted
options to purchase an aggregate of 500,000 shares of the Company's common stock
at an exercise price equal to $1.00, to its Chief Financial Officer. The options
vest in equal  amounts  each quarter  over 2 years.  The options  expire 5 years
following the date of grant.

On May 1, 2006 and on June 8, 2006, the Company  awarded  options to purchase an
aggregate of 224,000  shares of the Company's  common stock at an exercise price
equal to $1.00, to certain new employees. The options vest in equal amounts each
quarter over 2 years. The options expire 5 years following the date of grant.

The fair value of each  option  granted was  estimated  on the date of the grant
using the  Black-Scholes  fair value  option  pricing  model with the  following
assumptions:

     ---------------------------------------------------------------------------
                                                                   2006
     ---------------------------------------------------------------------------

     Risk Free Rate interest rate                             4.02 - 5.2%

     Volatility factor of the future expected market price      86.56%
     of the Company's common shares

     Weighted average expected life in years                      5.0

     Expected dividends                                          None

     ---------------------------------------------------------------------------

--------------------------------------------------------------------------------

The fair value of the options  granted as determined  above was  $1,770,268,  of
which  $1,274,042 will be expensed in fiscal 2006. Of this amount,  $657,379 was
expensed during the three months ended June 30, 2006.





                                      F-13

                                                                              15
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)


NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

6.  Capital Stock

Holders of shares of common  stock are  entitled to cast one vote for each share
held at all stockholders'  meetings for all purposes,  including the election of
directors.

The preferred  stock of the Company shall be issued by the Board of Directors of
the Company in one or more classes or one or more series  within any class,  and
such  classes or series  shall have such  voting  powers,  full or limited or no
voting powers, and such designations,  preferences,  limitations or restrictions
as the Board of Directors of the Company may determine, from time-to-time.

Holders  of shares of stock of any class  shall not be  entitled  as a matter of
right to subscribe  for or purchase or receive any part of any new or additional
issue of shares of stock of any class, or of securities  convertible into shares
of stock of any class,  whether now hereafter  authorized or whether  issued for
money, for consideration other than money, or by way of dividend.

a) During the  quarter  ended June 30,  2006,  the Company  has  received  gross
proceeds of $1,700,000  under the terms of a unit  subscription  agreement which
provides  for the  purchase  of one share of common  stock  for  $1.00.  Cost of
issuance  related to raising  these funds  amounted to $200,000.  As at June 30,
2006,  1,700,000  shares of the  Company's  common stock are issuable  under the
terms of this  agreement.  The Company is  authorized  to issue,  to  accredited
investors  only,  up to 5,000,000  shares of common stock under the terms of the
Unit Subscription  agreement.  Sales of units of the Company's stock under these
agreements will continue during the third quarter.

b) On April 1, 2006, shares certain founding  shareholders of the Company,  each
owing 50,000  shares of the Common  Stock of the Company,  agreed to surrender a
portion of their stock  ownership  to the Company  for  cancellation.  In total,
80,000 shares were surrendered.

c) Effective April 3, 2006, the Company's  shareholders  approved an increase in
the authorized  capital stock of the Company from  80,000,000  shares of $0.0001
par value stock to 350,000,000 shares of authorized capital stock, consisting of
250,000,000  shares of Common Stock having a par value of $0.0001 per share, and
100,000,000 shares of Preferred Stock, having a par value of $0.0001 per share.

d) On April 5, 2006, the Company effected a 10 for one split of its common stock
to holders of record on that date.  Throughout this report, common stock amounts
have been adjusted to reflect this change on a retroactive basis.







                                      F-14

                                                                              16
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)


NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


7.  LEASE AGREEMENTS

At April 20, 2006, the Company entered into a lease agreement through its wholly
owned  subsidiary,  Northern  Ethanol  (Barrie)  Inc, for a 25 year lease,  with
optional renewal periods, on an industrial property located in Barrie,  Ontario,
Canada,  (the  "Barrie  Lease"),  on which it  intends to  construct  an ethanol
processing  facility.  The Company also entered into a 5 year lease on April 20,
2006 through its wholly owned  subsidiary,  Northern  Ethanol (Canada) Inc., for
office  premises  located in  Toronto,  Ontario,  Canada to be used for its head
office (the "Head  Office  Lease").  The Company has  analyzed  these leases and
determined  that  the  terms of the  property  lease  at the  Barrie  industrial
location  require  it to be  accounted  for  as a  capital  lease.  The  Company
determined the value of the capital lease  acquired,  by calculating the present
value of the lease  payments  over the 25 year term of the lease,  discounted at
12% per annum.  The terms of the office lease at the Toronto location require it
to be accounted for as an operating lease.

As the Barrie  location was acquired for the purposes of constructing an ethanol
processing  facility,  and the plant is not yet operational,  no amortization or
interest expense related to this lease is reflected in the income statement. The
interest during the construction period will be capitalized.

The terms of the leases require the following minimum payments:

  Fiscal Year         Barrie Lease      Head Office Lease             Total
      2006                 $ 323,916            $  89,897            $ 413,813
      2007                 1,943,493              154,110            2,097,603
      2008                 1,943,493              154,110            2,097,603
      2009                 1,943,493              154,110            2,097,603
      2010                 1,943,493              154,110            2,097,603
  Thereafter              46,515,177               64,212           46,579,389
                      ----------------------------------------------------------
                         $54,613,065            $ 770,549          $55,383,614

8.  INCOME TAXES

The Company has approximately  $100,000 in tax assets at June 30, 2006 resulting
from  start-up  costs.  A valuation  allowance has been recorded to fully offset
these tax  assets  because  the future  realization  of the  related  income tax
benefits is uncertain.  The change in the valuation  allowance from December 31,
2005 to June 30, 2006 amounted to approximately $94,000.






                                      F-15

                                                                              17
<PAGE>

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(Formerly BEACONSFIELD I, INC.)

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

9.  SUBSEQUENT EVENTS

a) On July 15, 2006,  pursuant to an employment  agreement,  the Company granted
options to purchase an aggregate of 300,000 shares of the Company's common stock
at an exercise price equal to $1.00, to its Chief Operating Officer. The options
will vest in equal  amounts  each  quarter  over the next 2 years.  The  options
expire 5 years following the date of grant.

The fair value of each  option  granted was  estimated  on the date of the grant
using the  Black-Scholes  fair value  option  pricing  model with the  following
assumptions:

     ------------------------------------------------------------------
                                                               2006
     ------------------------------------------------------------------

     Risk Free Rate interest rate                            5.1 - 5.2%

     Volatility factor of the future expected market price     86.56%
     of the Company's common shares

     Weighted average expected life in years                     5.0

     Expected dividends                                         None

     ------------------------------------------------------------------

     ------------------------------------------------------------------

The fair value of the options granted as determined above was $180,649, of which
$95,578 will be expensed in fiscal 2006.


(b)  Subsequent  to the quarter  end,  the Company  has  received an  additional
$351,500 under the terms of a unit subscription agreement which provides for the
purchase of one share of common stock for $1.00.  As at August 7, 2006,  351,500
shares  of the  Company's  common  stock  are  issuable  under the terms of this
agreement. The Company is authorized to issue to accredited investors only up to
5,000,000  shares of  common  stock  under  the  terms of the Unit  Subscription
agreement.  Sales of units of the Company's  stock under these  agreements  will
continue during the third quarter.

(c)  Effective  July 24, 2006,  the Company  entered into a Project  Development
Agreement  with  Delta-T  Corporation,  of  Williamsburg,  Virginia,  ("Delta"),
wherein Delta shall provide the Company with professional  advice,  business and
technical  information,  design and engineering and related services in order to
assist the Company in assembling all of the information, permits, agreements and
resources  necessary for construction of an ethanol plant having the capacity to
produce 100 million gallons per year in Barrie,  Ontario,  Canada (the "Plant").
The Company paid Delta the sum of $100,000 for their services.

The Agreement  provides for Delta to assist the Company in the  development  and
analysis of the feasibility of the Plant,  including location,  operating costs,
Plant specifications,  compliance with environmental issues,  product marketing,
industry  economics,  technical and other assistance.  The relationship  between
Delta and the Company is deemed  exclusive  during the term of the Agreement and
anticipates   that  the  parties  shall  enter  into  a   definitive,   turnkey,
engineering,  procurement and  construction  agreement for the entire Plant. The
Company has granted Delta a right of first  refusal in this regard.  The term of
the Agreement is five years.

                                      F-16

                                                                              18

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following  discussion  should be read in conjunction with our unaudited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any  forward-looking
statements  made by, or on, our behalf.  We disclaim  any  obligation  to update
forward-looking statements.

OVERVIEW

     We were  incorporated as "Beaconsfield I, Inc." in the State of Delaware on
November 29, 2004, to pursue a business  combination.  In May 2006, we attempted
to  change  our name to  "Northern  Ethanol,  Inc." by  effecting  a merger of a
subsidiary  company  into  Beaconsfield  I,  Inc.  However,  we were  unable  to
accomplish  our  objectives  in this regard.  Subsequently,  in April 2006,  the
holders of a majority of our then issued and  outstanding  common stock approved
an amendment to our Certificate of Incorporation  wherein we did change our name
to "Northern Ethanol,  Inc." to better reflect our current business plan that is
described  under  "Plan of  Operation"  below.  We are  currently  considered  a
"development stage" company.

RESULTS OF OPERATIONS

Comparison  of Results of Operations  for the  six-month  periods ended June 30,
2006 and 2005

     During the  six-month  period ended June 30, 2006,  we did not generate any
revenues.  We do not expect to begin generating  revenues until such time as the
ethanol plants described below under "Plan of Operation" become operational.

     During the six month  period  ended June 30,  2006,  we incurred  costs and
expenses  totaling  $931,115,  including  $755,352 in salaries  and benefits and
$175,763 in general and  administrative  expense and occupancy cost.  During the
six-month  period ended June 30, 2005, our total costs and expenses were $5,279.
This  significant  increase in  operating  expenses  was a direct  result of our
commencement of our new business plan, described below.

                                                                              19
<PAGE>

     As a result,  we  incurred  a net loss of  $(936,402)  during the six month
period ended June 30,  2006,  compared to a net loss of $(5,279) for the similar
period ended June 30, 2005.  Because we did not generate revenues during the six
month period ended June 30, 2006, following is our Plan of Operation.

PLAN OF OPERATION

     As of the date of this  report we have  begun  entry into the  business  of
manufacturing fuel ethanol for sale to oil refiners and other users. Our goal is
to produce,  market and sell  ethanol and other  renewable  fuels in the Eastern
United  States  and  Canada.  In this  regard we have  retained  new  management
experienced in this industry. Further, we have secured or are in advanced stages
of securing  sites to build  ethanol  processing  facilities at two locations in
Ontario,  Canada  (Barrie and Sarnia),  and one location in upper New York State
for total planned production  capacity of 300 million US gallons per annum. Each
of  these  locations  will  be the  site  for a  corn-based  ethanol  processing
facility.  The two facilities currently envisaged for Ontario are expected to be
completed  and  operational  over the next two  years.  The Upper New York State
facility is expected to be operational one year later.

         We have secured, or are in the advanced stages of securing, sites to
build ethanol processing facilities at the following locations, in the
capacities indicated:

     o    Barrie,  Ontario,  Canada;  100  million  gallons  - The site has been
          obtained under a 45 year lease including  renewal  options.  The lease
          allows us to utilize all existing site  infrastructure and demolish or
          modify existing  structures to optimize plant operations.  The site is
          owned by an affiliate of one of our shareholders.

     o    Sarnia,  Ontario,  Canada;  100 million  gallons - This site comprises
          approximately  40 acres. We have entered into a non-binding  letter of
          intent with the owner of this location that provides us with a 99 year
          lease with an annual rental payment of $10 (CN), plus payment by us of
          all real  estate  and  property  taxes and other  operating  expenses,
          including  utilities.  The  terms  are  subject  to  our  reaching  an
          agreement  for the owner to supply steam to our  proposed  plant for a
          minimum of 15 years.  The proposed terms also include a right of first
          refusal  for us to  acquire  this  land at a price to be agreed in the
          future and also provides for us to receive $4 million (CN) as a tenant
          inducement to enter into a definitive agreement. This site is adjacent
          to a major rail line,  has good  highway  access,  access to the Great
          Lakes for shipping purposes and is fully zoned and serviced.

     In  addition,   we  are  actively   negotiating  for  the  acquisition  and
development of a site at the following  location:

     o    New York  State;  100  million  gallons.  This  site is  undergoing  a
          comprehensive  evaluation  for  a  100  million  gallon  facility  and
          business terms of the site acquisition are currently under discussion.

                                                                              20
<PAGE>

     Each of these  locations  will be the site for a  state-of-the-art  ethanol
processing facility using corn as the feedstock.  The Barrie location represents
a conversion of an existing site from a former  brewery.  The Sarnia and Upstate
New York locations represent new construction.

     Effective  July 24, 2006, we entered into a Project  Development  Agreement
(the "Agreement") with Delta-T Corporation,  Williamsburg,  Virginia, ("Delta"),
wherein  Delta shall  provide us  professional  advice,  business and  technical
information,  design and engineering and related  services in order to assist us
in  assembling  all  of  the  information,  permits,  agreements  and  resources
necessary  for  construction  of an ethanol plant having the capacity to produce
100 million gallons per year in Barrie,  Ontario,  Canada (the "Plant"). We paid
Delta the sum of $100,000 for their services.

     The  Agreement  provides  for  Delta to assist  us in the  development  and
analysis of the feasibility of the Plant,  including location,  operating costs,
Plant specifications,  compliance with environmental issues,  product marketing,
industry  economics,  technical and other assistance.  The relationship  between
Delta  and  us is  deemed  exclusive  during  the  term  of  the  Agreement  and
anticipates   that  the  parties  shall  enter  into  a   definitive,   turnkey,
engineering,  procurement  and  construction  agreement for the entire Plant. We
have  granted  Delta a right of first  refusal in this  regard.  The term of the
Agreement is five (5) years.

     We will  begin  construction  at each  location  as soon as we are  able to
secure all the necessary financing and permits to complete  construction of this
facility.  We expect  this  financing  to take the form of both debt and equity.
However,  it is our intention to use leverage to the greatest extent feasible as
is typical with larger  energy  infrastructure  projects.  To date,  we have not
obtained all of this required financing.  However, as of August 8, 2006, we have
raised  $2,051,500 by selling shares of our common stock at a price of $1.00 per
share. We intend to raise up to $5 million in this offering.  See "Liquidity and
Capital Resources" and "Risk Factors" below.

     We are also in  negotiations  to acquire an existing  ethanol  plant in the
Province of Quebec,  Canada.  However, these negotiations are in the preliminary
stage and there can be no assurance that we will consummate this acquisition. We
have made a fully refundable deposit to the prospective sellers in the amount of
$750,000 (US).

     We are implementing a growth strategy by:

     o    Building state of the art  processing  plants on brown field and green
          field sites;

     o    Negotiating stable long term contracts with key suppliers;

     o    Securing long term sales agreements;

     o    Pursuing acquisitions of existing ethanol producers

                                                                              21
<PAGE>

     o    Pursuing   acquisitions   and/or  strategic   alliances  with  ethanol
          technology companies.

     We are  committed to investing in the latest  technology to ensure that the
processing  costs are as low as  possible,  and the  outputs  are of the highest
quality.  The initial  locations  have been chosen due to proximity to supply of
corn,  natural  gas, and water and are well  located for the  transportation  of
inputs and products.

     We have also  entered  into a letter of intent with a privately  held grain
merchant's  corporation  (the "Grain  Merchant"),  which owns and operates grain
elevators  and  has   extensive   domestic  and   international   experience  in
international  grain  origination  and  co-product  merchandizing.  We expect to
engage them to source all of the corn  required for the  operation of the Barrie
and Sarnia ethanol facilities at competitive  prices. We expect they will assist
us in  negotiations  with major corn suppliers to guarantee  supply and price by
committing to long-term  purchase  agreements or opportunistic  purchases on the
spot market when this can be done at favorable rates.

     We have also been in  discussion  with a privately  held  corporation  that
provides  ethanol  marketing   capability  across  North  America.  The  ethanol
marketing  company  is a fully  integrated  marketing  company  supported  by an
experienced  sales force, a knowledgeable  logistics and scheduling  department,
customer  service,  and an online computer system that we will be able to access
to   streamline   all   necessary   correspondence   for  daily   shipments  and
transportation  transactions.  The  Company  expects  to engage  this  marketing
company to handle the sales of our ethanol production.  We expect that the Grain
Merchant would assist us with the sale of our dried  distillers grain by-product
through spot sales or long-term contracts to major purchasers.

     The manner in which we intend to develop  future  sites  beyond the initial
aforementioned  locations  will depend upon the nature of the  opportunity,  the
respective  needs  of the  parties  involved,  and  ourselves.  We have set up a
separate  subsidiary to own each ethanol plant. We may purchase assets outright,
acquire an ownership  interest in  companies  controlling  key assets,  or issue
shares in the subsidiary  company that controls the site to outside  parties who
control key assets.

     It  is  likely  that  we  will  finance  our  participation  in a  business
opportunity through the issuance of common stock or other securities and through
the  issuance  of senior  debt  secured  against  the  assets of each  operating
location.

     In the case of cash  acquisition,  the transaction may be accomplished upon
the  sole   determination  of  management   without  any  vote  or  approval  by
stockholders.  In the  case of a  statutory  merger  or  consolidation  directly
involving  us, it will likely be  necessary to call a  stockholders'  meeting or
otherwise  obtain the  approval of the holders of a majority of our  outstanding
shares.  The necessity to obtain such  stockholder  approval may result in delay
and additional  expense in the consummation of any proposed  transaction and may
also give rise to certain appraisal rights to dissenting stockholders.

                                                                              22
<PAGE>

     We plan to  identify  and exploit new  technologies  for reduced  costs and
greater  manufacturing  yields.  For example,  we are examining new technologies
enabling the conversion of cellulose, which is generated predominantly from wood
waste,  paper waste and agricultural  waste,  into ethanol which would reduce or
eliminate  our  dependency  on corn as a primary  feedstock,  while also helping
local municipalities deal with ever increasing demands on their garbage disposal
sites.

LIQUIDITY AND CAPITAL RESOURCES

     At June 30, 2006, we had $101,479 in cash and cash equivalents.

     As of August 8, 2006, we have sold an aggregate of 2,051,500  shares of our
common stock to investors and received  aggregate  gross  proceeds of $2,051,500
therefrom  (net proceeds of  $1,951,500).  This offering has been  authorized to
raise up to $5 million and is  continuing  as of the date  hereof.  We intend to
utilize the  proceeds of this  offering to support the possible  acquisition  of
existing  ethanol  plants,  on expenses  related to obtaining and building other
ethanol facilities,  and on general and administrative  expenses, as well as for
general working capital.

     As a result  of our  obtaining  equity  capital  in the  aforesaid  private
offering, we believe that we currently have sufficient funds available for us to
continue to implement  our  business  plan for the next 12 months.  However,  we
estimate that we will require an additional $372.5 million in additional debt or
equity  capital to fully  implement our initial  business plan in the future and
there are no assurances  that we will be able to raise this capital when needed.
However,  while there are no  definitive  agreements  in place as of the date of
this Report,  we are currently  engaged in various  discussions  with interested
parties to provide these funds or otherwise  enter into a strategic  alliance to
provide such  funding.  The inability to obtain  sufficient  funds from external
sources when needed will have a material adverse affect on our implementation of
our plan of operation, results of operations and financial condition.

INFLATION

     Although our operations are influenced by general economic  conditions,  we
do not believe that inflation had a material affect on our results of operations
during the six-month period ended June 30, 2006.

                                  RISK FACTORS

An investment in our Common Stock is a risky investment.  Prospective  investors
should carefully consider the following risk factors before purchasing shares of
our Common Stock.

RISKS RELATED TO OUR PROPOSED OPERATIONS

We have incurred losses in the past and expect to incur greater losses until our
--------------------------------------------------------------------------------
ethanol production begins.
--------------------------

                                                                              23
<PAGE>

     As of June 30, 2006 and December 31, 2005, we had an accumulated deficit of
$967,875 and $31,473,  respectively.  For the six months ended June 30, 2006 and
for the year ended  December  31,  2005,  we incurred net losses of $936,402 and
$27,765,  respectively. We expect to incur significantly greater losses at least
until the  completion  of our  initial  ethanol  production  facility in Barrie,
Ontario.  We estimate that the earliest completion date of this facility and, as
a result, our earliest date of ethanol production will not occur until the first
quarter of 2008. We expect to rely on cash from  operations  and debt and equity
financing  to fund  all of the cash  requirements  of our  business.  If our net
losses continue, we will experience negative cash flow, which may hamper current
operations and may prevent us from  expanding our business.  We may be unable to
attain,  sustain or increase profitability on a quarterly or annual basis in the
future.

Our revenue will be derived primarily from sales of ethanol.
------------------------------------------------------------

     Ethanol  competes  with  other  existing  products  and  other  alternative
products  could also be  developed  for use as fuel  additives.  We expect to be
completely   focused  on  the  production  and  marketing  of  ethanol  and  its
co-products for the foreseeable  future.  We may be unable to shift our business
focus away from the production and marketing of ethanol to other renewable fuels
or competing products.  Accordingly,  an industry shift away from ethanol or the
emergence  of new  competing  products  may reduce the  demand  for  ethanol.  A
downturn in the demand for ethanol would  significantly and adversely affect our
sales and profitability.

In  order  to  complete  the  construction  of our  planned  ethanol  production
--------------------------------------------------------------------------------
facilities, we will require significant additional funding.
-----------------------------------------------------------

     We anticipate  that we will need to raise  approximately  $372.5 million in
equity  and/or debt  financing  to complete  construction  of our first  ethanol
production  facilities in Barrie and Sarnia,  Ontario.  As of August 8, 2006, we
have undertaken an initial private  offering of our common stock whereby we have
issued  2,015,500  shares of our common  stock at a price of $1.00 per share and
received proceeds of $2,015,500 therefrom. We have no contracts with, or binding
commitments from, any investment banker,  bank, lender or financial  institution
for the  balance  of the  capital  required.  We may not be able to  obtain  any
funding from one or more investors or lenders,  or if funding is obtained,  that
it will be on terms that we have anticipated or that are otherwise acceptable to
us. If we are unable to secure  adequate  financing,  or financing on acceptable
terms  is  unavailable  for  any  reason,  we  may  be  forced  to  abandon  our
construction  of one or more,  or even all,  of our planned  ethanol  production
facilities.

We plan to fund a substantial  majority of the construction costs of our planned
--------------------------------------------------------------------------------
ethanol  production  facilities  through the issuance of a significant amount of
--------------------------------------------------------------------------------
debt.
-----

     As a result,  our  capital  structure  will be highly  leveraged.  Our debt
levels and debt service  requirements  could have important  consequences  which
could reduce the value of your investment, including:

                                                                              24
<PAGE>

     o    limiting  our  ability  to borrow  additional  amounts  for  operating
          capital  or  other  purposes  and  causing  us to be  able  to  borrow
          additional funds only on unfavorable terms;

     o    reducing funds  available for operations and  distributions  because a
          substantial  portion of our cash flow will be used to pay interest and
          principal on our debt;

     o    making us vulnerable to increases in prevailing interest rates;

     o    placing  us  at  a   competitive   disadvantage   because  we  may  be
          substantially more leveraged than some of our competitors;

     o    subjecting  all or  substantially  all of our  assets to liens,  which
          means that  there may be no assets  left for our  stockholders  in the
          event of a liquidation; and

     o    limiting our ability to adjust to changing  market  conditions,  which
          could  increase  our  vulnerability  to a downturn in our  business or
          general economic conditions.

     If cash flow  from  operations  are  insufficient  to pay our debt  service
obligations  it is  possible  that we could be  forced to sell  assets,  seek to
obtain additional equity capital or refinance or restructure all or a portion of
our debt on substantially  less favorable terms. In the event that we are unable
to refinance  all or a portion of our debt or raise funds  through  asset sales,
sales of equity or  otherwise,  we may be forced to liquidate and you could lose
your entire investment.

Our success depends,  to a significant  extent,  upon the continued  services of
--------------------------------------------------------------------------------
Gord Laschinger, who is our President and Chief Executive Officer.
------------------------------------------------------------------

     Mr. Laschinger has developed key personal  relationships  with our expected
suppliers and customers.  We greatly rely on these  relationships in the conduct
of our operations and the execution of our business strategies.  The loss of Mr.
Laschinger could,  therefore,  result in the loss of our favorable relationships
with one or more of our suppliers and  customers.  Although we have entered into
an  employment  agreement  with Mr.  Laschinger,  that  agreement  is of limited
duration and is subject to early  termination  by Mr.  Laschinger  under certain
circumstances.  In  addition,  we do not maintain  "key  person" life  insurance
covering  Mr.  Laschinger  or any  other  executive  officer.  The  loss  of Mr.
Laschinger  could also  significantly  delay or prevent the  achievement  of our
business objectives.

The ethanol production and marketing industry is extremely competitive.
-----------------------------------------------------------------------

     Many of our significant competitors in the ethanol production and marketing
industry,  such as  Archer-Daniels-Midland  Company,  or ADM, have substantially
greater production, financial, research and development, personnel and marketing
resources than we do. In addition,  we are not currently  producing any ethanol.
As a result,  our competitors,  who are presently  producing  ethanol,  may have
greater  relative present and future  advantages  resulting from

                                                                              25
<PAGE>

greater capital resources and operating  history.  As a result,  our competitors
may be able to compete more  aggressively  and sustain that  competition  over a
longer period of time than we could.  Our lack of resources  relative to many of
our  significant  competitors  may  cause us to fail to  anticipate  or  respond
adequately to new developments  and other  competitive  pressures.  This failure
could reduce our  competitiveness and cause a decline in our market share, sales
and profitability.

Our strategy  envisions a period of rapid  growth that may impose a  significant
--------------------------------------------------------------------------------
burden on our administrative and operational resources.
-------------------------------------------------------

     The  growth  of  our  business,  and  in  particular,   the  completion  of
construction  of  our  planned  ethanol  production  facilities,   will  require
significant investments of capital and management's close attention. Our ability
to  effectively  manage our growth will require us to  substantially  expand the
capabilities of our  administrative  and  operational  resources and to attract,
train, manage and retain qualified management,  technicians and other personnel.
We may be unable to do so. In addition,  our failure to successfully  manage our
growth could result in our sales not increasing  commensurately with our capital
investments.  If we are  unable to  successfully  manage our  growth,  we may be
unable to achieve our goals.

     Should we become  involved in reselling  ethanol,  we  anticipate  that our
purchases  and sales of ethanol may not always match with sales and purchases of
ethanol at prevailing market prices. We may commit from time to time to the sale
of ethanol to our customers without  corresponding and commensurate  commitments
for the supply of ethanol from our  suppliers  that subject us to the risk of an
increase  in the price of  ethanol.  We may also commit from time to time to the
purchase of ethanol from our suppliers  without  corresponding  and commensurate
commitments  for the purchase of ethanol by our customers,  which subjects us to
the risk of a decline in the price of ethanol.

     In addition,  we may increase  inventory  levels in  anticipation of rising
ethanol  prices and  decreases  inventory  levels in  anticipation  of declining
ethanol prices. As a result, we are subject to the risk of ethanol prices moving
in  unanticipated  directions,  which could result in declining or even negative
gross profit margins for this segment of our business. Accordingly, this segment
of our  business  would be subject to  fluctuations  in the price of ethanol and
these  fluctuations may result in lower or even negative gross margins and which
could materially and adversely affect our profitability.

We cannot rely on long-term  ethanol  orders or commitments by our customers for
--------------------------------------------------------------------------------
protection  from the negative  financial  effects of a decline in the demand for
--------------------------------------------------------------------------------
ethanol.
--------

     The limited  certainty of ethanol  orders can make it  difficult  for us to
forecast our sales and allocate our  resources in a manner  consistent  with our
actual sales. Moreover, our expense levels are based in part on our expectations
of future sales and, if our expectations  regarding future sales are inaccurate,
we may be  unable  to  reduce  costs in a timely  manner  to  adjust  for  sales
shortfalls.  Furthermore,  because  we expect  to  depend  on a small  number of
customers for

                                                                              26
<PAGE>

the vast  majority of our sales,  the  magnitude of the  ramifications  of these
risks is greater than if our sales were less concentrated within a larger number
of  customers.  As a  result  of  our  lack  of  long-term  ethanol  orders  and
commitments, we may experience a rapid decline in our sales and profitability.

We have not conducted any significant  business  operations as yet and have been
--------------------------------------------------------------------------------
unprofitable to date.
---------------------

     Accordingly,  there is no prior operating  history by which to evaluate the
likelihood of our success or our contribution to our overall  profitability.  We
may never complete  construction of an ethanol production  facility and commence
significant  operations  or, if we do complete  the  construction  of an ethanol
production facility, it may not be successful in contributing  positively to our
profitability.

The market price of ethanol is dependent on many factors, including the price of
--------------------------------------------------------------------------------
gasoline, which is in turn dependent on the price of petroleum.
---------------------------------------------------------------

     Petroleum  prices are highly  volatile  and  difficult  to forecast  due to
frequent  changes in global politics and the world economy.  The distribution of
petroleum  throughout  the world is affected by incidents in unstable  political
environments,  such as Iraq, Iran, Kuwait, Saudi Arabia, the former U.S.S.R. and
other countries and regions.  The industrialized world depends critically on oil
from these areas,  and any disruption or other reduction in oil supply can cause
significant  fluctuations  in the prices of oil and gasoline.  We cannot predict
the future price of oil or gasoline and may  establish  unprofitable  prices for
the sale of  ethanol  due to  significant  fluctuations  in market  prices.  For
example,  the  price of  ethanol  declined  by  approximately  25% from its 2004
average price per gallon in only five months from January 2005 through May 2005.
In recent years, the prices of gasoline,  petroleum and ethanol have all reached
historically  unprecedented high levels. If the prices of gasoline and petroleum
decline,  we believe  that the demand for and price of ethanol may be  adversely
affected.   Fluctuations   in  the  market   price  of  ethanol  may  cause  our
profitability to fluctuate significantly.

     We believe that the production of ethanol is expanding rapidly. There are a
number of new plants  under  construction  and  planned for  construction,  both
inside and  outside  Ontario.  We expect  existing  ethanol  plants to expand by
increasing  production  capacity and actual production.  Increases in the demand
for ethanol may not be commensurate with increasing  supplies of ethanol.  Thus,
increased  production of ethanol may lead to lower ethanol prices. The increased
production  of ethanol  could  also have other  adverse  effects.  For  example,
increased ethanol production will lead to increased supplies of co-products from
the production of ethanol,  such as DDGS and CO2. Those increased supplies could
lead to lower prices for those  co-products.  Also, the increased  production of
ethanol could result in increased  demand for corn.  This could result in higher
prices for corn and cause higher ethanol production costs and, in the event that
we are  unable to pass  increases  in the price of corn to our  customers,  will
result in lower profits.  We cannot predict the future price of ethanol or DDGS.
Any material decline in the price of ethanol,  DDGS or CO2 will adversely affect
our sales and profitability.

                                                                              27
<PAGE>

Our  business is subject to  extensive  regulation  by federal,  state and local
--------------------------------------------------------------------------------
governmental agencies.
----------------------

     We cannot predict in what manner or to what extent governmental regulations
will harm our  business  or the ethanol  production  and  marketing  industry in
general.  For example the recent  energy bill signed into law by President  Bush
includes a national  renewable fuels standard that requires  refiners to blend a
percentage of renewable fuels into gasoline.  Similar  regulations were recently
introduced in Ontario.  If changes in government  regulations  reduce the demand
for ethanol, our sales and profitability may decline.

     The  fuel  ethanol  business  benefits  significantly  from  tax  incentive
policies and  environmental  regulations  that favor the use of ethanol in motor
fuel blends in the United  States.  Currently,  a gasoline  marketer  that sells
gasoline  without ethanol must pay a federal tax of $0.18 per gallon compared to
$0.13 per gallon for gasoline that is blended with 10% ethanol.  Smaller credits
are  available  for gasoline  blended with lesser  percentages  of ethanol.  The
repeal or  substantial  modification  of the federal  excise tax  exemption  for
ethanol-blended gasoline or, to a lesser extent, other federal or state policies
and  regulations  that  encourage  the use of ethanol  could have a  detrimental
effect on the ethanol  production  and  marketing  industry and  materially  and
adversely affect our sales and profitability.

     We  will be  subject  to  extensive  air,  water  and  other  environmental
regulations  in connection  with the  construction  and operation of our planned
ethanol production  facilities.  The production of ethanol involves the emission
of various airborne pollutants, including particulates,  carbon monoxide, oxides
of nitrogen and volatile  organic  compounds.  We also may be required to obtain
various other  water-related  permits,  such as a water  discharge  permit and a
storm-water  discharge  permit,  a water  withdrawal  permit and a public  water
supply  permit.  If for any reason we are  unable to obtain any of the  required
permits,  construction costs for our planned ethanol  production  facilities are
likely to increase. In addition,  the facilities may not be fully constructed at
all. It is also likely that  operations  at the  facilities  will be governed by
other  regulations.  Compliance  with  regulations  may  be  time-consuming  and
expensive  and may delay or even prevent sales of ethanol in Ontario or in other
jurisdictions.

     The  production and sale of ethanol is subject to regulation by agencies of
the  Federal  Government,  including,  but not  limited  to,  the  Environmental
Protection  Agency,  or the  EPA,  in the US as well as other  agencies  in each
jurisdiction  in  which  ethanol  is  produced,  sold,  stored  or  transported.
Environmental  laws and  regulations  that affect our  operations,  and that are
expected  to affect  our  planned  operations,  are  extensive  and have  become
progressively  more  stringent.  Applicable  laws and regulations are subject to
change, which could be made retroactively.  Violations of environmental laws and
regulations or permit conditions can result in substantial penalties, injunctive
orders  compelling  installation  of  additional  controls,  civil and  criminal
sanctions,   permit  revocations  and/or  facility  shutdowns.   If  significant
unforeseen  liabilities  arise for corrective  action or other  compliance,  our
sales and profitability could be materially and adversely affected.


                                                                              28
<PAGE>

Delays in the  construction  of our planned  ethanol  production  facilities  or
--------------------------------------------------------------------------------
defects in materials and/or workmanship may occur.
--------------------------------------------------

     Any defects could delay the  commencement  of operations of the facilities,
or, if such defects are discovered after  operations have commenced,  could halt
or discontinue  operation of a particular  facility  indefinitely.  In addition,
construction  projects often involve  delays in obtaining  permits and encounter
delays due to weather  conditions,  fire, the provision of materials or labor or
other events. In addition,  changes in interest rates or the credit  environment
or changes in political  administrations  at the federal,  provincial,  state or
local  levels that  result in policy  change  towards  ethanol or our project in
particular,  could cause  construction and operation delays. Any of these events
may adversely affect our sales and profitability.

     We may  encounter  hazardous  conditions  at or near  each  of our  planned
facility sites, including the Barrie site that may delay or prevent construction
of a particular  facility.  If we  encounter a hazardous  condition at or near a
site,  work may be  suspended  and we may be required  to correct the  condition
prior to continuing  construction.  The presence of a hazardous  condition would
likely delay construction of a particular  facility and may require  significant
expenditure of resources to correct the condition. If we encounter any hazardous
condition  during  construction,  our sales and  profitability  may be adversely
affected.

     We have based our estimated capital resource needs on a preliminary  design
for an ethanol production facility in Barrie Ontario.  Based on this preliminary
budget,  we estimated that the construction  cost of each of our facilities will
be approximately  $160 million.  The estimated cost of these facilities is based
on preliminary discussions and estimates, but the final construction cost of the
facility may be  significantly  higher.  Any  significant  increase in the final
construction  cost of the  facility  will  adversely  affect our  profitability,
liquidity and available capital resources.

The  production of ethanol  requires a  significant  amount of raw materials and
--------------------------------------------------------------------------------
energy, primarily corn, water, electricity and natural gas.
-----------------------------------------------------------

     In particular,  we estimate that our Barrie and Sarnia  ethanol  production
facilities will require  approximately  78 million bushels of corn each year and
significant and  uninterrupted  supplies of water,  electricity and natural gas.
The prices of corn, electricity and natural gas have fluctuated significantly in
the past and may fluctuate  significantly in the future. In addition,  droughts,
severe winter  weather and other problems may cause delays or  interruptions  of
various  durations  in the  delivery  of corn  to our  facilities,  reduce  corn
supplies and increase corn prices.  Local water,  electricity  and gas utilities
may not be able to reliably  supply the water,  electricity and natural gas that
our  Barrie and Sarnia  facilities  will need or may not be able to supply  such
resources on acceptable  terms. In addition,  if there is an interruption in the
supply of water or energy for any reason,  we may be  required  to halt  ethanol
production.   We  may  not  be  able  to  successfully  anticipate  or  mitigate
fluctuations   in  the  prices  of  raw   materials   and  energy   through  the
implementation   of  hedging  and  contracting   techniques.   Our  hedging  and
contracting activities may not lower our prices of raw materials and energy, and
in a period of declining  raw

                                                                              29
<PAGE>

materials or energy prices, these hedging and contracting  strategies may result
in our paying higher prices than our competitors.  In addition, we may be unable
to pass  increases in the prices of raw materials  and energy to our  customers.
Higher raw materials and energy prices will generally cause lower profit margins
and may even result in losses.  Accordingly,  our sales and profitability may be
significantly and adversely affected by the prices and supplies of raw materials
and energy.

We have not voluntarily  implemented various corporate governance  measures,  in
--------------------------------------------------------------------------------
the  absence  of  which,  stockholders  may  have  reduced  protections  against
--------------------------------------------------------------------------------
interested director transactions, conflicts of interest and other matters.
--------------------------------------------------------------------------

     We are not subject to any law, rule or regulation  requiring  that we adopt
any of the  corporate  governance  measures  that are  required  by the rules of
national securities exchanges or Nasdaq such as independent  directors and audit
committees. It is possible that if we were to adopt some or all of the corporate
governance measures, stockholders would benefit from somewhat greater assurances
that internal corporate decisions were being made by disinterested directors and
that policies had been implemented to define  responsible  conduct.  Prospective
investors should bear in mind our current lack of corporate  governance measures
in formulating their investment decisions.

We may be exposed to  potential  risks  relating to our internal  controls  over
--------------------------------------------------------------------------------
financial  reporting and our ability to have those  controls  attested to by our
--------------------------------------------------------------------------------
independent auditors.
---------------------

     As directed by Section 404 of the  Sarbanes-Oxley  Act of 2002 ("SOX 404"),
the Securities and Exchange  Commission adopted rules requiring public companies
to  include a report of  management  on the  company's  internal  controls  over
financial reporting in their annual reports, including Form 10-KSB. In addition,
the independent registered public accounting firm auditing a company's financial
statements  must also  attest to and report on  management's  assessment  of the
effectiveness  of the company's  internal  controls over financial  reporting as
well as the operating  effectiveness of the company's internal controls. We have
not yet been  subject to these  requirements.  We are  evaluating  our  internal
control  systems  in  order  to allow  our  management  to  report  on,  and our
independent auditors attest to, our internal controls, as a required part of our
annual  report on Form  10-KSB  beginning  with our  reports for the fiscal year
ended  December 31, 2007. A recent release from the SEC has indicated that newly
public  companies may be granted an additional  year,  after becoming  public to
demonstrate the  effectiveness of their internal  controls as required under SOX
404.

     While we expect to expend significant resources in developing the necessary
documentation and testing  procedures  required by SOX 404, there is a risk that
we will not comply with all of the  requirements  imposed  thereby.  At present,
there is no  precedent  available  with  which to measure  compliance  adequacy.
Accordingly,  there can be no positive assurance that we will receive a positive
attestation from our independent auditors.

                                                                              30
<PAGE>

     In the event we identify significant deficiencies or material weaknesses in
our internal  controls  that we cannot  remediate  in a timely  manner or we are
unable to receive a positive  attestation  from our  independent  auditors  with
respect to our internal  controls,  investors and others may lose  confidence in
the reliability of our financial  statements and our ability to obtain equity or
debt financing could suffer.

RISKS RELATED TO OUR COMMON STOCK

There is no trading market for our securities and there can be no assurance that
--------------------------------------------------------------------------------
such a market will develop in the future.
-----------------------------------------

     Management  expects  that we will file a  registration  statement  with the
Securities  and Exchange  Commission  pursuant to the Securities Act of 1933, as
amended, in the near future. Thereafter, we intend to undertake efforts to cause
a market to develop in our common  stock on the OTC  Electronic  Bulletin  Board
operated by the National  Association  of Securities  Dealers,  Inc. There is no
assurance  such a market will  develop in the future or, if  developed,  that it
will  continue.  In the absence of a public trading  market,  an investor may be
unable to liquidate his investment in our company.

We do not have significant  financial  reporting  experience,  which may lead to
--------------------------------------------------------------------------------
delays in filing  required  reports with the Securities and Exchange  Commission
--------------------------------------------------------------------------------
and suspension of quotation of our  securities on the OTCBB,  which will make it
--------------------------------------------------------------------------------
more difficult for you to sell your securities.
-----------------------------------------------

     If we are  successful in listing our common stock for trading on the OTCBB,
of which there can be no assurance, the OTCBB limits quotations to securities of
issuers that are current in their reports filed with the Securities and Exchange
Commission.  These limitations may be impediments to our quotation on the OTCBB.
Because  we do not  have  significant  financial  reporting  experience,  we may
experience  delays in filing  required  reports with the Securities and Exchange
Commission  following the  effectiveness of the registration  statement to which
this prospectus is a part.  Because  issuers whose  securities are qualified for
quotation  on the OTCBB are required to file these  reports with the  Securities
and Exchange Commission in a timely manner, the failure to do so may result in a
suspension of trading or delisting from the OTCBB.

If we are successful in listing our common stock for trading on the OTCBB, there
--------------------------------------------------------------------------------
are no automated systems for negotiating  trades on the OTCBB and it is possible
--------------------------------------------------------------------------------
for the price of a stock to go up or down  significantly  during a lapse of time
--------------------------------------------------------------------------------
between  placing a market order and its execution,  which may affect your trades
--------------------------------------------------------------------------------
in our securities.
------------------

     Because there are no automated systems for negotiating trades on the OTCBB,
they  are  conducted  via  telephone.  In  times of  heavy  market  volume,  the
limitations of this process may result in a significant  increase in the time it
takes to execute investor orders. Therefore, when

                                                                              31
<PAGE>

investors  place  market  orders,  an order to buy or sell a specific  number of
shares at the current  market price,  it is possible for the price of a stock to
go up or down  significantly  during the lapse of time between  placing a market
order and its execution.

If our stock trades below $5.00 per share and is quoted on the OTCBB,  our stock
--------------------------------------------------------------------------------
would be considered a "penny stock" which can adversely affect its liquidity.
-----------------------------------------------------------------------------

     If and when trading  commences and the trading price of our Common Stock is
less than $5.00 per share, our Common Stock would be considered a "penny stock,"
and  trading in our Common  Stock would be subject to the  requirements  of Rule
15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers
who recommend low-priced  securities to persons other than established customers
and accredited investors must satisfy special sales practice  requirements.  The
broker/dealer must make an individualized written suitability  determination for
the  purchaser  and  receive  the  purchaser's  written  consent  prior  to  the
transaction.

     SEC regulations also require  additional  disclosure in connection with any
trades  involving a "penny  stock,"  including the delivery,  prior to any penny
stock transaction,  of a disclosure  schedule  explaining the penny stock market
and its associated  risks.  These  requirements  severely limit the liquidity of
securities in the secondary  market  because few broker or dealers are likely to
undertake these compliance  activities.  In addition to the applicability of the
penny stock  rules,  other risks  associated  with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.

"Penny Stock" rules may make buying or selling our securities difficult.
------------------------------------------------------------------------

     The  Securities  and  Exchange  Commission  has  adopted  regulations  that
generally define a penny stock to be any equity security that has a market price
of less than $5.00 per share, subject to certain exceptions. These rules require
that any broker-dealer who recommends our securities to persons other than prior
customers  and  accredited  investors  must,  prior to the sale,  make a special
written suitability  determination for the purchaser and receive the purchaser's
written agreement to execute the transaction.  Unless an exception is available,
the regulations require the delivery, prior to any transaction involving a penny
stock, of a disclosure  schedule explaining the penny stock market and the risks
associated with trading in the penny stock market.  In addition,  broker-dealers
must disclose  commissions  payable to both the broker-dealer and the registered
representative  and  current  quotations  for the  securities  they  offer.  The
additional  burdens  imposed  upon   broker-dealers  by  such  requirements  may
discourage  broker-dealers  from  recommending  transactions  in our securities,
which could  severely  limit the liquidity of our  securities  and  consequently
adversely affect the market price for our securities.

                                                                              32
<PAGE>

We do not  anticipate  payment  of  dividends,  and  investors  will  be  wholly
--------------------------------------------------------------------------------
dependent upon the market for the Common Stock to realize  economic benefit from
--------------------------------------------------------------------------------
their investment.
-----------------

     As holders of our  Securities,  you will only be entitled to receive  those
dividends that are declared by our board of directors out of surplus.  We do not
expect to have surplus available for declaration of dividends in the foreseeable
future. Indeed, there is no assurance that such surplus will ever materialize to
permit  payment of dividends to you as holders of the  Securities.  The board of
directors  will  determine  future  dividend  policy  based upon our  results of
operations,  financial condition, capital requirements,  reserve needs and other
circumstances.

Any  adverse  effect on the  market  price of our  common  stock  could  make it
--------------------------------------------------------------------------------
difficult for us to raise additional  capital through sales of equity securities
--------------------------------------------------------------------------------
at a time and at a price that we deem appropriate.
--------------------------------------------------

     We intend to file a registration statement with the Securities and Exchange
Commission  to register  shares of our common  stock and  thereafter,  cause our
common stock to be listed for trading on the OTCBB,  or other  exchange.  If and
when this registration  statement  declared  effective,  holders of these shares
will be permitted,  subject to few  limitations,  to freely sell these shares of
common  stock.  At that time,  sales of  substantial  amounts  of common  stock,
including  shares issued upon the exercise of stock  options or warrants,  or in
anticipation  that such sales could occur,  may materially and adversely  affect
prevailing market prices for our common stock.

The market price of our common may fluctuate significantly in the future.
-------------------------------------------------------------------------

     If our Common  Stock is  approved  for  trading,  of which  there can be no
assurance, the market price of our common stock may fluctuate in response to one
or more of the following factors, many of which are beyond our control:


     o    the volume and timing of the receipt of orders for ethanol  from major
          customers;

     o    competitive pricing pressures;

     o    our ability to produce,  sell and deliver ethanol on a  cost-effective
          and timely basis;

     o    our inability to obtain construction,  acquisition,  capital equipment
          and/or working capital financing;

     o    the  introduction  and announcement of one or more new alternatives to
          ethanol by our competitors;

     o    changing conditions in the ethanol and fuel markets;

                                                                              33
<PAGE>

     o    changes in market valuations of similar companies;

     o    stock market price and volume fluctuations generally;

     o    regulatory developments;

     o    fluctuations in our quarterly or annual operating results;

     o    additions or departures of key personnel; and

     o    future sales of our common stock or other securities.

     Furthermore, adverse economic conditions in Ontario and other jurisdictions
could have a negative  impact on our results of  operations.  Demand for ethanol
could also be adversely  affected by a slow-down in overall demand for oxygenate
and  gasoline  additive  products.  The  levels of our  ethanol  production  and
purchases  for resale will be based upon  forecasted  demand.  Accordingly,  any
inaccuracy in  forecasting  anticipated  revenues and expenses  could  adversely
affect our business.  Furthermore,  we recognize  revenues from ethanol sales at
the time of delivery.  The failure to receive  anticipated orders or to complete
delivery  in  any  quarterly  period  could  adversely  affect  our  results  of
operations for that period.  Quarterly results are not necessarily indicative of
future  performance for any particular period, and we may not experience revenue
growth or profitability on a quarterly or an annual basis.

     The  price at which you  purchase  shares  of our  common  stock may not be
indicative  of the price that will  prevail in the  trading  market.  You may be
unable to sell your  shares of common  stock at or above  your  purchase  price,
which may result in substantial losses to you and which may include the complete
loss of your investment.  In the past,  securities  class action  litigation has
often  been  brought  against  a  company   following  periods  of  stock  price
volatility. We may be the target of similar litigation in the future. Securities
litigation could result in substantial costs and divert  management's  attention
and our resources away from our business. Any of the risks described above could
adversely  affect our sales and  profitability  and also the price of our common
stock.

ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

     We maintain  disclosure controls and procedures that are designed to ensure
that  information  required to be disclosed in our reports filed pursuant to the
Securities  Exchange Act of 1934, as amended (the "Exchange  Act"), is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's rules,  regulations and related forms, and
that such  information  is  accumulated  and  communicated  to the our

                                                                              34
<PAGE>

principal executive officer and principal financial officer, as appropriate,  to
allow timely decisions regarding required disclosure.

     As of June 30, 2006, we carried out an  evaluation,  under the  supervision
and with the participation of our management,  including our principal executive
officer and principal  financial officer, of the effectiveness of the design and
operation of our disclosure  controls and procedures.  Based on this evaluation,
our principal  executive officer and principal  financial officer concluded that
our disclosure controls and procedures were effective.

CHANGES IN INTERNAL CONTROLS.

     There have been no changes in our  internal  controls  or in other  factors
that could significantly affect these controls and procedures during the quarter
ended June 30, 2006.


                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS - None

ITEM 2.  CHANGES IN SECURITIES.

     On April 1, 2006, certain of our founding  shareholders agreed to surrender
a  portion  of their  stock  ownership  back to us for  cancellation.  In total,
800,000 shares were surrendered.

     Effective  April 5, 2006, we  effectuated a forward split of our issued and
outstanding  common stock whereby ten (10) shares of common stock were issued in
exchange for every one (1) share of common stock issued and  outstanding  on the
record date of April 5, 2006.  All  references  in this report to our issued and
outstanding  common stock are  reflected on a post forward  split basis,  unless
otherwise indicated.

     As of August 8, 2006, we have sold an aggregate of 2,051,500  shares of our
common stock to investors and received  aggregate  gross  proceeds of $2,051,500
therefrom  (net  proceeds of  $1,951,500)  ($1.00 per share (US)).  Our Board of
Directors has authorized  issuance of up to 5,000,000 shares of our common stock
in this offering, which are being offered to accredited investors only. Sales of
shares of our Common Stock will continue during our third fiscal quarter.

     All of the  investors who  participated  and who will  participate  in this
offering were and will be non-US  residents.  We relied upon the exemption  from
registration  provided by Regulation S promulgated  under the  Securities Act of
1933, as amended, to issue these securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES - None

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<PAGE>

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

     On April 3, 2006,  the holders of a majority of our issued and  outstanding
common  shares  approved  an  amendment  to our  Certificate  of  Incorporation,
changing  our name to  "Northern  Ethanol,  Inc." and  increasing  the number of
authorized   shares  from  80,000,000  shares  of  $.0001  par  value  stock  to
350,000,000 shares of authorized capital stock, consisting of 250,000,000 shares
of Common Stock having a par value of $.0001 per share and 100,000,000 shares of
Preferred Stock having a par value of $.0001 per share.

     On April 6, 2006,  the holders of a majority of our issued and  outstanding
common shares  approved the adoption of a Stock Option Plan,  reserving from the
authorized  but unissued  common  shares an  aggregate of 8,000,000  shares that
shall underlie stock options to be granted pursuant to the Stock Plan.

ITEM 5.  OTHER INFORMATION - None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K -

     (a) Exhibits

         31.1      Certification of Chief Executive Officer Pursuant to Section
                   302 of the Sarbanes-Oxley Act of 2002.

         31.2      Certification of Chief Financial Officer Pursuant to Section
                   302 of the Sarbanes-Oxley Act of 2002.

         32.1      Certification of Chief Executive Officer Pursuant to Section
                   906 of the Sarbanes-Oxley Act of 2002.

         32.2      Certification of Chief Financial Officer Pursuant to Section
                   906 of the Sarbanes-Oxley Act of 2002.

     (b) Reports on Form 8-K.

     We did not file any reports on Form 8-K during the three-month period ended
June 30, 2006.

SUBSEQUENT EVENTS

     On July 21, 2006,  as amended  August 3 2006, we filed a report on Form 8-K
advising that  effective  July 19, 2006, the firm of Raich Ende Malter & Co. LLP
("REM"),  our  independent  accountant  during the period from November 29, 2004
(inception)  through July 18,

                                                                              36
<PAGE>

2006, was dismissed. Effective July 19, 2006 we retained the firm of KPMG as our
independent  accountant,  to review our unaudited  financial  statements for the
interim  periods  ended June 30,  2006,  September  30,  2006,  and to audit our
financial  statement for our fiscal year ending  December 31, 2006,  and include
such  report as part of our annual  report on Form  10-KSB  for our fiscal  year
ending December 31, 2006.

     On August 7, 2006,  we filed a report on Form 8-K advising  that  effective
July 24, 2006, we entered into a Project Development Agreement (the "Agreement")
with Delta-T Corporation, Williamsburg, Virginia, ("Delta"), wherein Delta shall
provide us professional advice,  business and technical information,  design and
engineering and related  services in order to assist us in assembling all of the
information,  permits, agreements and resources necessary for construction of an
ethanol  plant  having the  capacity to produce 100 million  gallons per year in
Barrie, Ontario, Canada.

     This report also advised that we had  retained  Steven  Reader as our Chief
Operating Officer.

                                                                              37

<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of Section 12 of the Securities and Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                   NORTHERN ETHANOL, INC.
                                   (Registrant)

                                   Dated: August 14, 2006


                                   By:s/ Gordon Laschinger
                                      ------------------------------------------
                                      Gordon Laschinger, Chief Executive Officer


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