EXHIBIT
      10.8

    


    KREIDO
      BIOFUELS, INC.

    88
      West 44th Avenue

    Vancouver,
      British Columbia, Canada

    V5Y
      2V1

    


    Non-Qualified
      Stock Option Agreement 

    


     

    January
      12, 2007

     

    


    Dr.
      Joel
      Balbien

    c/o
      Kreido Laboratories

    1140
      Avenido Acaso

    Camarillo,
      CA 93012


     

    Dear
      Dr.
      Balbien:

     

    I
      am
      pleased to inform you that, subject to the conditions precedent to the
      effectiveness of this Agreement that is set forth in Section 13 of this
      Agreement, Kreido Biofuels, Inc. (the “Company”) has granted you a non-qualified
      stock option to purchase shares of the Company’s Common Stock, par value $0.001
      per share (the “Common Stock”), on the terms and conditions set forth
      below.

     

    The
      grant
      of this stock option is made pursuant to the Kreido Biofuels, Inc. 2006 Stock
      Option Plan (the “Plan”). The terms of the Plan are incorporated into this
      letter and in the case of any conflict between the Plan and this letter, the
      terms of the Plan shall control. This Agreement also references the Employment
      Agreement (the “Employment Agreement”), dated as of November 1, 2006, between
      you and Kreido Laboratories, a California corporation, which Employment
      Agreement the Company will assume at the effective time of the merger (the
      “Merger”) that occurs under the Agreement and Plan of Merger, referred to in
      Section 13 of this Agreement. 

     

    Now,
      therefore, in consideration of the foregoing and the mutual covenants
      hereinafter set forth:

     

    1. Stock
      Option.
      The
      Company hereby grants you an incentive stock option (the “Stock Option”) to
      purchase from the Company One Million Two Hundred Five Thousand Three Hundred
      Eighty-Four (1,205,384) shares of Common Stock at a price of $1.35 per share.
      The date of grant (the “Date of Grant”) of the Stock Option is the date set
      forth above. Unless earlier exercised or terminated in accordance with the
      terms
      hereunder and in the Plan, this Stock Option will expire on the date that is
      the
      tenth (10th)
      anniversary of the Date of Grant.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2. Entitlement
      to Exercise the Stock Option.
      The
      grant of the Stock Option is subject to the following terms and
      conditions:

     

    (a) The
      Stock
      Option shall be vested exercisable in eight (8) quarterly installments of One
      Hundred Fifty Thousand Six Hundred Seventy-Three (150,673) shares each with
      installments vesting on the date of each March, June, September and December
      of
      2007 and 2008 that corresponds to the date that is the effective date of the
      Merger. 

     

    (b) If
      you
      die when any portion of the Stock Option is exercisable, then the person to
      whom
      your rights under the Stock Option shall have passed by will or by the laws
      of
      descent and distribution may exercise any of the exercisable portion of the
      Stock Option within one (1) year after your death; provided,
      that no
      Stock Option may be exercised in any event more than ten (10) years after the
      Date of Grant.

     

    3. Method
      of Exercise & Payment.
      You may
      exercise the vested portion of the Stock Option in whole or in part, by giving
      written notice to the Company. The written notice shall clearly state your
      intent to elect to exercise the Stock Option and the number of shares of Common
      Stock with respect to which the Stock Option is being exercised. Further, the
      written notice shall be signed by you (or, in the case of your death, the person
      exercising the Stock Option) and shall be delivered to the Corporate Secretary
      of the Company at the Company’s principal executive office. Except as otherwise
      provided in the Plan, payment of the exercise price for the number of shares
      of
      Stock being purchased pursuant to any Option shall be made (i) by cash or
      check payable to the order of the Company; (ii) by
      delivery or attestation of shares of Common Stock (valued at their Fair Market
      Value) in satisfaction of all or any part of the exercise price; (iii) by
      delivery of a properly executed exercise notice with irrevocable instructions
      to
      a broker to deliver to the Company the amount necessary to pay the exercise
      price from the sale or proceeds of a loan from the broker with respect to the
      sale of Company Stock or a broker loan secured by the Company Stock;
      (iv) by such other consideration as may be approved by the Committee from
      time to time to the extent permitted by applicable law; or (v) by any
      combination of (i) through (iv) hereof. 

     

    4. Tax
      Withholding.
      As a
      condition of exercise, you agree that at the time of exercise that you will
      pay
      to the Company any applicable withholding taxes, if any, that the Company is
      required to withhold in connection with the exercise of the Stock Option. To
      satisfy the applicable withholding taxes, you may elect to (a) make cash
      payment or authorize additional withholding from your cash compensation;
      (b) deliver freely tradable shares of Common Stock (which will be valued at
      their Fair Market Value as of the date of delivery); or (c) request that
      the Company retain that number of shares of Common Stock that would satisfy
      all
      or a portion of the applicable withholding taxes. 

     

    5. Transferability
      of Stock Option.
      Other
      than upon your death by will or by the laws of descent and distribution, the
      Stock Option is not transferable by you and may be exercised during your
      lifetime only by you. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    6. Termination
      of Stock Option.
      

     

    (a) If
      your
      employment with the Company is terminated for Cause, as such term is defined
      in
      the Employment Agreement, the Stock Option, whether or not vested, shall
      immediately expire effective the date of termination of employment.


    


    (b) If
      you
      terminate your employment with the Company voluntarily without Good Reason,
      as
      such term is defined in the Employment Agreement, all unvested installments
      of
      the Stock Option shall immediately expire effective the date of termination
      of
      employment. The Stock Option, to the extent unexercised, shall expire on the
      later of (a) ninety (90) days after the termination of employment, and (b)
      the
      expiration of the contractual lock-up agreement.

    


    (c) If
      your
      employment with the Company terminates on account of death or Disability, as
      defined below, all unvested installments of the Stock Option shall immediately
      expire effective the date of termination of employment. Vested installments
      of
      the Stock Option, to the extent unexercised, shall expire one (1) year after
      the
      termination of employment.

    


    (d) If
      you
      terminate your employment with the Company (A) in connection with a Change
      of
      Control, as defined in the Employment Agreement, (B) if the Company terminates
      your employment without Cause or (C) if you terminate your employment with
      the
      Company for Good Reason, one-half (1/2) of all unvested installments of the
      Stock Option shall immediately vest up to a maximum of two (2) quarters and
      become exercisable effective the date of your termination of employment, and,
      to
      the extent unexercised, shall expire one (1) year after any such
      event.

     

    7. Adjustments.
      If the
      number of outstanding shares of Common Stock is increased or decreased as a
      result of one or more stock splits, reverse stock splits, stock dividends,
      recapitalizations, mergers, share exchange acquisitions, combinations or
      reclassifications, the number of shares with respect to which you have an
      unexercised Stock Option and the Stock Option price shall be appropriately
      adjusted as provided in the Plan.

     

    8. Delivery
      of Certificate.
      The
      Company may delay delivery of the certificate for shares of Common Stock
      purchased pursuant to the exercise of a Stock Option until (i) it receives
      any required representation by you or completion of any registration or other
      qualification of such shares under any state or federal law regulation that
      the
      Company’s counsel shall determine as necessary or advisable, or (ii) it
      receives advice of counsel that all applicable legal requirements have been
      complied with. As a condition of exercising the Stock Option, you may be
      required to execute a customary written indication of your investment intent
      and
      such other agreements the Company deems necessary or appropriate to comply
      with
      applicable securities laws.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    9. No
      Guaranteed Right of Employment.
      If you
      are employed by the Company, nothing contained herein shall confer upon you
      any
      right to be continued in the employment of the Company or interfere in any
      way
      with the right of the Company to terminate your employment at any time for
      any
      cause.

     

    10. Notice
      of Certain Dispositions.
      You
      agree to notify the Company in writing immediately after you make a disposition
      of any shares acquired upon exercise of this Stock Option if you are required
      to
      report information related to your ownership of Common Stock pursuant to any
      applicable securities laws, or if such disposition occurs before the later
      of
      (a) the date that is two years after the Date of Grant, or (b) the date that
      is
      one year after the date that you acquired such shares upon exercise of this
      Stock Option. 

    


    11. Notices.
      Notices
      hereunder shall be mailed or delivered to the Company at its principal place
      of
      business, and shall be delivered to you in person or mailed or delivered to
      you
      at the address set forth below, or in either case at such other address as
      one
      party may subsequently furnish to the other party in writing. 

    


    12. Choice
      of Law.
      This
      Agreement shall be governed by New York law, without giving effect to the
      conflicts or choice of laws principles thereof.

    


    13. Condition
      Precedent.
      This
      Agreement shall not be or become effective until the merger referred to in
      the
      Agreement and Plan of Merger, dated as of January 12, 2007, between the Company
      and Kreido Laboratories, shall have been consummated.

    


    [Signature
      page follows]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              Kreido
                Biofuels, Inc.

            
	 
 	 
 	 
 
	
            	By:  	/s/
              Philip Lichtenberger
	 	
              
                

              

              Name: Philip Lichtenberger

            
	 	
              
                

              

              Title:  
Executive
                Vice President

            
	 	
              
                

              

            


    

    


    ACKNOWLEDGEMENT
      BY OPTIONEE

    


    The
      foregoing Stock Option is hereby accepted and the terms and conditions thereof
      hereby agreed to by the undersigned as of the Date of Grant specified
      above.

    


    
      	 	 	 
	
            	
            	/s/
              Joel Balbien
	 	
              
Optionee's
              Signature
	 	 
	 	Joel Balbien, Ph.D.
	 	
              
Printed
              Name
	 	 
	 	Optionee's Address:
	 	 
	 	 
	 	
              

            
	 	 
	 	
              

            
	 	 
	 	
              

            


    

    


     

    
      
        
        

      

      
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