**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB/A**





(Mark
      One)





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                FOR THE QUARTERLY PERIOD ENDED**JUNE
                30, 2007**





or





o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
                ACT




For
      the
      transition period from _______________ to _______________





Commission
      File Number: **000-30172**





**Renewal
      Fuels, Inc.**


(Exact
      name of small business issuer as specified in its charter)


******Delaware**
              ******22-1436279**(State
                  or other jurisdiction of incorporation or organization)
              (IRS
                  Employer Identification
                  No.)


**1818
      North Farwell Avenue, Milwaukee, WI 53202**


(Address
      of principal executive offices)





**(414)
      283-2625**


(Issuer’s
      telephone number)


**Tech
      Laboratories, Inc.**


(Former
      name if changed from last report)





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





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





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 27,488,705 shares of common stock, $0.001
      par
      value per share, as of August 13, 2007.





Transitional
      Small Business Disclosure Format (Check one): Yes o No x








**Explanatory
      Notes**





Renewal
      Fuels, Inc. (hereinafter referred to as “us,” “we,” the “Company” or “Renewal”)
      is filing this Amendment No. 1 on Form 10-QSB/A (the “First Amendment”) to its
      Quarterly Report for the fiscal period ended June 30, 2007, which was filed
      with
      the Securities and Exchange Commission (“SEC”) on August 16, 2007 (the “Original
      Report”) in response to certain comments raised by the staff of the
      SEC.    As more fully discussed in Note 13 to the
      accompanying condensed consolidated financial statements, the purpose of this
      Amendment is to restate our unaudited financial statements and notes included
      in
      Part I, Item 1 *Financial Statements* and Part I, Item 2 *Management’s
      Discussion and Analysis* to address the following matters.





·
            We
                previously concluded that an important trademark acquired in a business
                combination had an indefinite life. The accompanying financial statements
                and notes have been revised to provide for an expected life for this
                trademark of ten years. Amortization of this intangible asset is
                reflected
                in statements of operations.





·
            We
                previously recognized as an asset certain deferred financing costs
                in
                connection with our reverse merger with Tech Labs, Inc. Since principles
                of accounting for reverse merger preclude the recognition of assets
                other
                than those of the accounting acquiree, we have revised our balance
                sheet
                to eliminate this asset.





·
            We
                have certain debt agreements and registration rights agreements that
                are
                in default. We have modified our disclosures to provide more information
                about the nature of defaults, the remedies of the investors and our
                conclusions related to the accounting consequences.




This
      Amendment speaks only of the original filing date of the Original Report and,
      except for those Items disclosed in this explanatory note, is unchanged from
      the
      Original Report. This First Amendment does not reflect events after the filing
      of the Original Report or modify or update those disclosures affected by
      subsequent events.  Therefore, you should read this First Amendment
      together with our other reports that update and supersede the information
      contained in this First Amendment.





**RENEWAL
      FUELS, INC.**





**FORM
      10-QSB/A**





**QUARTERLY
      PERIOD ENDED JUNE 30, 2007**





**TABLE
      OF CONTENTS**




PART
                1  FINANCIAL INFORMATIONItem
                1.
            
            Financial
                Statements (Unaudited)Consolidated
                Balance Sheet (Restated)
            
            6Consolidated
                Statements of Operations (Restated)
            
            8Consolidated
                Statement of Stockholders’ Equity (Deficit) (Restated)
            
            9Consolidated
                Statements of Cash Flows (Restated)
            
            10Notes
                to Consolidated Financial Statements
            
            12Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            32Item
                3.
            
            Controls
                and Procedures
            
            50PART
                II OTHER INFORMATIONItem
                1.
            
            Legal
                Proceedings
            
            52Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            52Item
                3.
            
            Defaults
                Upon Senior Securities
            
            52Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            52Item
                5.
            
            Other
                Information
            
            52Item
                6.
            
            Exhibits
            
            53SIGNATURES
            
            
            
            55




4


PART
      1.
 FINANCIAL INFORMATION





FORWARD-LOOKING
      STATEMENTS





This
      Form
      10-QSB contains “forward-looking statements” relating to Renewal Fuels, Inc.
      (formerly Tech Laboratories, Inc.) (referred to as the “Company” or “we”, “us”
or “our” in this Form 10-QSB), which represent the Company’s current
      expectations or beliefs including, but not limited to, statements concerning
      the
      Company’s operations, performance, financial condition and growth. For this
      purpose, any statements contained in this Form 10-QSB that are not statements
      of
      historical fact are forward-looking statements. Without limiting the generality
      of the foregoing, words such as “may”, “anticipation”, “intend”, “could”,
“estimate”, or “continue” or the negative or other comparable terminology are
      intended to identify forward-looking statements. These statements by their
      nature involve substantial risks and uncertainties, such as credit losses,
      dependence on management and key personnel, variability of quarterly results,
      and the ability of the Company to continue its growth strategy and competition,
      certain of which are beyond the Company’s control. Should one or more of these
      risks or uncertainties materialize or should the underlying assumptions prove
      incorrect, actual outcomes and results could differ materially from those
      indicated in the forward-looking statements.





Any
      forward-looking statement speaks only as of the date on which such statement
      is
      made, and the Company undertakes no obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time and it is not possible for
      management to predict all of such factors, nor can it assess the impact of
      each
      such factor on the business or the extent to which any factor, or combination
      of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.


5


**ITEM
      1. FINANCIAL STATEMENTS**


**RENEWAL
      FUELS, INC.**





**UNAUDITED** **CONSOLIDATED BALANCE SHEET**


**AS
      OF JUNE 30, 2007**


(Restated)





**ASSETS****Current
                assets:**Cash
            
            $
            116,030Inventories
            
            
            51,461Prepaid
                expenses and other current assets
            
            
            24,578**Total
                current assets**
            
            
            192,069Property
                and equipment - net
            
            
            57,672Note
                receivable - Biodiesel Solutions
            
            
            200,000Financing
                Fees, net of accumulated amortization of $17,507
            
            
            162,493Intangibles,
                net of accumulated amortization of $14,117
            
            
            292,883Goodwill
            
            
            93,705**Total
                assets**
            
            $
            998,822




(c *ontinued-)*


6


**RENEWAL
                FUELS, INC.**
              
              **UNAUDITED****CONSOLIDATED BALANCE SHEET**
              **AS
                OF JUNE 30, 2007**
              (Restated)
              
              (-*continued)***LIABILITIES
                AND STOCKHOLDERS' EQUITY****(DEFICIT)****Liabilities****Current
                liabilities:**Accounts
                payable
            
            $
            199,409Current
                maturities of convertible debt
            
            
            1,276,686Customer
                deposits
            
            
            2,932**Total
                current liabilities**
            
            
            1,479,027Convertible
                debt, less current maturities
            
            
            764,169**Total
                liabilities**
            
            
            2,243,196**Commitments
                and contingencies****Stockholders’
                equity****(deficit):**Capital
                stock:Preferred
                stock - par value of $.001; 20,000,000 shares authorized;no
                shares issued and outstanding
            
            
            -Common
                stock - par value of $.001; 3,000,000,000 shares
                authorized;23,805,126
                shares issued and outstanding
            
            
            23,805Additional
                paid-in capital
            
            
            4,733,359Accumulated
                deficit
            
            
            (6,001,538
            )**Total
                stockholders’ equity**
            
            
            (1,244,374
            )**Total
                liabilities and stockholders’ equity**
            
            $
            998,822**See
                accompanying notes to consolidated financial
                statements.**




7




**RENEWAL
      FUELS, INC.**





**UNAUDITED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





Successor
                Business
            
            Predecessor
                BusinessThree
                Months Ended
              June
                30, 2007
              Restated
            
            March
                9, 2007
              (Date
                of Inception)
              to
                June 30, 2007 Restated
            
            Three
                Months Ended
              March
                31, 2007
            
            Three
                Months Ended
              June
                30, 2006
            
            Six
                Months Ended
              June
                30, 2006**Sales**
            
            $
            244,087
            
            $
            244,087
            
            $
            104,360
            
            $
            503,061
            
            $
            1,067,427Cost
                of goods sold
            
            
            142,342
            
            
            142,342
            
            
            76,802
            
            
            331,449
            
            
            683,416**Gross
                profit**
            
            
            101,745
            
            
            101,745
            
            
            27,558
            
            
            171,612
            
            
            384,011**Operating
                expenses:**Employee
                compensation and benefits
            
            
            32,696
            
            
            34,272
            
            
            52,320
            
            
            69,430
            
            
            125,544Stock-based
                transaction expense
            
            
            5,131,231
            
            
            5,131,231
            
            
            -
            
            
            -
            
            
            -Occupancy
                and equipment
            
            
            8,257
            
            
            8,257
            
            
            18,666
            
            
            23,900
            
            
            69,930Advertising
            
            
            43,815
            
            
            43,983
            
            
            8,474
            
            
            8,762
            
            
            18,088Professional
                fees
            
            
            317,898
            
            
            349,741
            
            
            8,474
            
            
            2,949
            
            
            12,029Other
                general and administrative
            
            
            100,666
            
            
            100,494
            
            
            19,085
            
            
            26,691
            
            
            80,874Total
                operating expenses
            
            
            5,634,563
            
            
            5,667,979
            
            
            107,019
            
            
            131,732
            
            
            306,465**Operating
                income (loss)**
            
            
            (5,532,818
            )
            
            (5,556,234
            )
            
            (79,461
            )
            
            39,880
            
            
            77,546Interest
                income
            
            
            755
            
            
            755
            
            
            -
            
            
            -
            
            
            -Interest
                expense
            
            
            (413,500
            )
            
            (415,427
            )
            
            -
            
            
            -
            
            
            -Financing
                fees
            
            
            (20,632
            )
            
            (20,632
            )
            
            -
            
            
            -
            
            
            -Net
                income (loss)
            
            $
            (5,966,195
            )
            $
            (6,001,538
            )
            $
            (79,461
            )
            $
            39,880
            
            $
            77,546Net
                income (loss) per share:Basic
            
            $
            (0.25
            )
            $
            (0.25
            )
            $
            (.01
            )
            $
            .01
            
            $
            .01Diluted
            
            $
            (0.25
            )
            $
            (0.25
            )
            $
            (.01
            )
            $
            .01
            
            $
            .01Weighted
                average shares outstanding:Basic
            
            
            23,668,270
            
            
            23,650,442
            
            
            7,000,000
            
            
            7,000,000
            
            
            7,000,000Diluted
            
            
            23,668,270
            
            
            23,650,442
            
            
            7,000,000
            
            
            7,000,000
            
            
            7,000,000**See
                accomSee accompanying notes to consolidated financial
                statements.**


8


**RENEWAL
      FUELS, INC.**





**UNAUDITED** **CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)**


**PERIOD
      FROM INCEPTION (MARCH 9, 2007) TO JUNE 30, 2007**


(Restated )




AdditionalPreferred
                Stock
            
            Common
                Stock
            
            Paid-In
            
            AccumulatedShares
            
            Amount
            
            Shares
            
            Amount
            
            Capital
            
            Deficit
            
            Total**Balances,
                March 9, 2007 (Inception)**
            
            
            -
            
            $
            -
            
            
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Common
                stock sold on March 9, 2007 to founders for cash
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            57,279
            
            
            -
            
            
            57,279Assumption
                of net liabilities
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,677,020
            )
            
            -
            
            
            (1,677,020
            )Stock-based
                transaction expense related to common stock sold to
                founders
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,131,231
            
            
            -
            
            
            5,131,231Common
                stock issued in exchange for net liabilities in a recapitalization
                on
                April 20, 2007
            
            
            -
            
            
            -
            
            
            673,356
            
            
            673
            
            
            (673
            )
            
            -
            
            
            -Preferred
                stock issued in reverse merger
            
            
            343,610
            
            
            343
            
            
            -
            
            
            -
            
            
            (343
            )
            
            -
            
            
            -Conversion
                of preferred stock to common stock on June 21, 2007
            
            
            (343,610
            )
            
            (343
            )
            
            22,907,323
            
            
            22,907
            
            
            (22,564
            )
            
            -
            
            
            -Common
                stock issued on conversion of convertible debentures
            
            
            -
            
            
            -
            
            
            224,447
            
            
            225
            
            
            82,675
            
            
            -
            
            
            82,900Common
                stock warrants issued
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            238,932
            
            
            -
            
            
            238,932Beneficial
                conversion feature of convertible debt instruments issued or
                assumed
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            923,841
            
            
            -
            
            
            923,841Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (6,001,538
            )
            
            (6,001,538
            )**Balances,
                June 30, 2007**
            
            
            -
            
            $
            -
            
            
            23,805,126
            
            $
            23,805
            
            $
            4,553,359
            
            $
            (6,001,538
            )
            $
            (1,244,374
            )




**See
      accompanying notes to consolidated financial
      statements.**


9


**RENEWAL
      FUELS, INC.**





**UNAUDITED** **CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Restated)





Successor
                Business
            
            Predecessor
                BusinessMarch
                9, 2007
              (Date
                of Inception) to
              June
                30, 2007
              (Restated)
            
            Three
              Months
              Ended
              March
                31, 2007
            
            Six
              Months
              Ended
              June
                30, 2006**Cash
                Flows From Operating Activities:**Net
                income (loss)
            
            $
            (6,001,538
            )
            $
            (79,461
            )
            $
            77,546Adjustments
                to reconcile net income (loss) to net cash
              provided
                by (used in) operating activities:Depreciation
                and amortization
            
            
            32,854
            
            
            471
            
            
            8,171Amortization
                of debt discounts
            
            
            355,949
            
            
            -
            
            
            -Stock-based
                transaction expense
            
            
            5,131,231
            
            
            -
            
            
            -Changes
                in operating assets and liabilities, net:Accounts
                receivable
            
            
            -
            
            
            -
            
            
            11,198Inventories
            
            
            (17,035
            )
            
            26,151
            
            
            87,525Other
                current assets
            
            
            (24,577
            )
            
            11,915
            
            
            (1,975
            )Accounts
                payable and accrued expenses
            
            
            (2,490
            )
            
            (5,857
            )
            
            (33,397
            )Accrued
                interest
            
            
            57,551
            
            
            -
            
            
            -Customer
                deposits
            
            
            2,932
            
            
            (12,224
            )
            
            12,793**Net
                Cash Provided By (Used In) Operating Activities**
            
            
            (465,123
            )
            
            (59,005
            )
            
            161,861**Cash
                Flows From Investing Activities:**Acquisition
                of FuelMeister assets
            
            
            (494,426
            )
            
            -
            
            
            -Note
                receivable - Biodiesel Solutions
            
            
            (200,000
            )
            
            -
            
            
            -Purchases
                of property and equipment
            
            
            (1,700
            )
            
            -
            
            
            (759
            )Refund
                of deposit
            
            
            -
            
            
            -
            
            
            5,376**Net
                Cash Provided By (Used In) Investing Activities**
            
            
            (696,126
            )
            
            -
            
            
            4,617**Cash
                Flows From Financing Activities:**Proceeds
                from issuance of common stock
            
            
            57,279
            
            
            -
            
            
            -Proceeds
                from issuance of warrants
            
            
            238,932
            
            
            -
            
            
            -Proceeds
                from issuance of long-term debt
            
            
            1,161,068
            
            
            -
            
            
            -Payment
                of debt issuance costs
            
            
            (180,000
            )
            
            -
            
            
            -Net
                contributions (distributions) from (to) owner
            
            
            -
            
            
            31,953
            
            
            (356,918
            )**Net
                Cash Provided By (Used In) Financing Activities**
            
            
            1,277,279
            
            
            31,953
            
            
            (356,918
            )**Net
                Increase (Decrease) In Cash**
            
            
            116,030
            
            
            (27,052
            )
            
            (190,440
            )Cash
                - Beginning of period
            
            
            -
            
            
            52,626
            
            
            276,850Cash
                - End of period
            
            $
            116,030
            
            $
            25,574
            
            $
            86,410


*(continued-)*


10





**RENEWAL
                FUELS, INC.**
              
              **UNAUDITED****CONSOLIDATED STATEMENT OF CASH FLOWS***(-continued)*Successor
              Business
            
            Predecessor
                Business**Supplemental
                Disclosure Of Cash Flow Information -**Interest
                paid
            
            $
            1,927
            
            $
            -
            
            $
            -Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            -**Supplemental
                Disclosures Of Non-Cash Investing And****Financing
                Activities:**Net
                liabilities assumed in a recapitalization
            
            $
            1,677,020
            
            $
            -
            
            $
            -





**See
      accompanying notes to consolidated financial statements.**




11


**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED JUNE 30, 2007 AND 2006**




**NOTE
      1**  **NATURE
      OF BUSINESS AND GOING CONCERN**





**Reorganization
      of Tech Laboratories, Inc. and Reverse Merger with Renewal Biodiesel,
      Inc.**





On
      April
      20, 2007, Renewal Fuels, Inc., formerly Tech Laboratories, Inc. (the “Company”
or “we”, “us”, “our”), and its wholly-owned subsidiary, Renewal Fuels
      Acquisitions, Inc. (“Renewal Acquisitions”), entered into a merger agreement
      (the “Renewal Merger Agreement”) with Renewal Biodiesel, Inc. (formerly Renewal
      Fuels, Inc.) (“Renewal Biodiesel”). Renewal Biodiesel was incorporated in the
      state of Delaware on March 9, 2007 for the purpose of the acquisition of the
      FuelMeister Business described below. Pursuant to the Renewal Merger Agreement,
      Renewal Acquisitions was merged with and into Renewal Biodiesel. The former
      shareholders of Renewal Biodiesel were issued an aggregate of 343,610 shares
      of
      the Company’s series A convertible preferred stock (the “Preferred Stock”),
      which were immediately convertible at the option of the holders into an
      aggregate of 268,588 shares of our common stock (4,028,827 shares prior to
      the
      1-for-15 reverse stock split described below). Following approval of the Renewal
      Merger Agreement by our shareholders, the Preferred Stock became convertible
      at
      the option of the holders into an aggregate of 22,907,323 shares of our common
      stock (343,610,000 shares prior to the reverse stock split). On June 21, 2007,
      all of the holders converted their shares of Preferred Stock into 22,907,323
      shares of the Company’s common stock.





On
      July
      9, 2007, the Company, which was a New Jersey entity (“Tech Labs-NJ”), entered
      into an Agreement and Plan of Merger with Tech Laboratories, Inc., a
      Delaware entity (“Tech Labs - DE”) under which Tech Labs - NJ and Tech Labs - DE
      were merged with and into the surviving corporation, Tech Labs - DE, whose
      name
      was subsequently changed on August 1, 2007 to Renewal Fuels, Inc. The
      certificate of incorporation and bylaws of the surviving corporation became
      the
      certificate of incorporation and bylaws of the Company, and the directors and
      officers in office of the surviving corporation became the directors and
      officers of the Company.





On
      July
      10, 2007, the majority stockholders of the Company authorized a 1-for-15 reverse
      stock split pursuant to which, on August 1, 2007,  the 357,076,887 shares
      of common stock of the Company (the "Old Shares") that were outstanding at
      June
      30, 2007 automatically converted into 23,805,126 shares of common stock
      (the "New Shares"). All common share and per share amounts in these financial
      statements have been retroactively restated to reflect this reverse stock split.
      The New Shares issued pursuant to the reverse stock split are fully paid and
      non-assessable. All New Shares have the same par value, voting rights and other
      rights as the Old Shares. Stockholders of the Company do not have preemptive
      rights to acquire additional shares of common stock which may be issued. Also
      on
      August 1, 2007, the Company changed its name from Tech Laboratories, Inc. to
      Renewal Fuels, Inc. and the Company’s quotation symbol on the OTC Bulletin Board
      was changed from TLBT to RNWF.





**Acquisition
      of FuelMeister Business**





Renewal
      Biodiesel, Inc. (formerly Renewal Fuels, Inc.)(“Renewal Biodiesel” as
      described below, the “Predecessor” ) all
      tangible and intangible assets of the FuelMeister Business of Biodiesel
      Solutions, Inc. (“BSI”), a Nevada corporation and
      unrelated and autonomous business entity ,
      effective March 30, 2007. As a result, Renewal Biodiesel is engaged in the
      business of designing, developing, manufacturing and marketing personal
      biodiesel processing equipment and accessories to convert used and fresh
      vegetable oil into clean-burning biodiesel. Renewal Biodiesel’s products allow
      customers to make biodiesel fuel, which is capable of powering all diesel fuel
      engines, for a current cost of approximately 70 cents per gallon. Renewal
      Biodiesel has a network of dealers in the United States for sale and
      distribution of its products. Renewal Biodiesel’s manufacturing facilities are
      currently located in Sparks, Nevada.




12





At
      the time of the FuelMeister acquisition, which was transacted before the reverse
      merger discussed above, our current Chief Executive Officer (John King) and
      one
      of our directors (David Marks) served as officers, directors and minority
      shareholders (individually and collectively) of Renewal Biodiesel. However,
      they
      had no affiliation with BSI. While influential, these relationships did not
      give
      rise to common control, which is defined as majority common ownership
      levels.





**Acquisition
      of BSI**





On
      July
      2, 2007, the Company and its wholly-owned subsidiary BSI Acquisitions, Inc.
      (“BSI Acquisitions”) entered into a merger agreement (the “BSI Merger
      Agreement”) with BSI (from whom Renewal Biodiesel had acquired the FuelMeister
      Business). Pursuant to the BSI Merger Agreement, BSI Acquisitions was merged
      with and into BSI and the Company thus acquired all of the remaining business
      of
      BSI, other than the FuelMeister Business which was previously acquired as a
      result of the reverse merger with Renewal Biodiesel. The former shareholders
      of
      BSI were issued an aggregate of 3,266,667 shares of common stock of the Company
      (49,000,000 shares prior to the 1-for-15 reverse stock split), 1,000,000 shares
      of BSI series B convertible preferred stock (the “BSI Preferred Stock”) and
      $500,000 in cash. The Company also issued an aggregate of 66,667 shares of
      common stock of the Company (1,000,000 shares prior to the 1-for-15 reverse
      stock split) and an aggregate of 133,333 options (2,000,000 prior to the reverse
      stock split) to purchase shares of common stock of the Company to the
      individuals, other than officers of BSI, employed by BSI. The BSI Preferred
      Stock is immediately convertible at the option of the holders into common stock
      of the Company at a conversion price per share equal to the greater of (i)
      $0.75, or (ii) the average closing price of the common stock during the ten
      trading days immediately preceding the conversion date. Prior to the acquisition
      of BSI, the Company loaned $200,000 to BSI under an 8% 180 day secured
      promissory note, due November 24, 2007. Upon the acquisition of BSI, the note
      was forgiven and recorded as a capital contribution to BSI.





BSI
      will
      manufacture the BiodieselMaster®, a factory-built biodiesel processing plant
      that is designed to produce 350,000 gallons of biodiesel per year and is
      designed to be appropriately scaled for a variety of customers, including small
      communities, farms, farm co-ops and trucking fleets. The design will provide
      a
      biodiesel production system that is continuous, flexible, efficient, affordable,
      and fully-automated. The automated control system will minimize labor costs
      and
      facilitates remote diagnostics.





**Predecessor
      Business**





As
      described above, under the terms of the Renewal Merger Agreement, we acquired
      100% of the common stock of Renewal Biodiesel in exchange for the issuance
      by us
      of 22,907,323 common shares. Although we were the legal acquirer, Renewal
      Biodiesel was considered to be the accounting acquirer and, as such, the
      acquisition was accounted for as a reverse merger and recapitalization. As
      a
      result, the accompanying unaudited consolidated financial statements represent
      the results of operations and cash flows of the accounting acquirer and
      Successor (Renewal Biodiesel) from the date of its inception on March 9, 2007
      through June 30, 2007. The FuelMeister Business acquired by Renewal Biodiesel
      constitutes our Predecessor business. The accompanying unaudited consolidated
      financial statements, as of June 30, 2007 and for the period March 9, 2007
      (date
      of inception) through, June 30, 2007, are those of the Successor. The statements
      of operations and of cash flows for the three months ended March 31, 2007 and
      for the three and six months ended June 30, 2006, are those of our Predecessor,
      the FuelMeister Business.





13




**Going
      Concern**





Our
      financial statements are prepared using accounting principles generally accepted
      in the United States of America applicable to a going concern, which contemplate
      the realization of assets and the liquidation of liabilities in the normal
      course of business. Since inception, we have incurred losses from operations.
      Furthermore, we will require a significant amount of capital to proceed with
      our
      business plan. As such, our ability to continue as a going concern is contingent
      upon us being able to secure an adequate amount of debt or equity capital to
      enable us to meet our operating cash requirements and successfully implement
      our
      business plan. In addition, our ability to continue as a going concern must
      be
      considered in light of the challenges, expenses and complications frequently
      encountered by entrance into new markets and the competitive environment in
      which we operate.





Our
      predecessor historically funded its cash requirements through operations and
      contributions from the former owner. In connection with the acquisition of
      the
      FuelMeister Business and BSI, we obtained debt financing. We expect we will
      need
      to obtain additional funding through private or public equity and/or debt
      financing to pay for the infrastructure needed to support our planned growth
      but, as a public company, we believe we will have better access to additional
      debt or equity capital.





There
      can
      be no assurance that our plans will materialize and/or that we will be
      successful in raising required capital to grow our business and/or that any
      such
      capital will be available on terms acceptable to us. These factors, among
      others, indicate that we may be unable to continue as a going concern for a
      reasonable period of time. Our financial statements do not include any
      adjustments relating to the recoverability and classification of recorded asset
      amounts or the amounts and classification of liabilities that might be necessary
      should we be unable to continue as a going concern.





**NOTE
      2**  **ACQUISITIONS**





**Reverse
      Merger and Recapitalization**





On
      April
      20, 2007, we entered into a Merger Agreement with Renewal Biodiesel, a Delaware
      corporation formed in 2007 for the purposes of the asset acquisition described
      below. Under the terms of the agreement, we acquired 100% of the common stock
      of
      Renewal Biodiesel in exchange for the issuance by us of 343,610
      shares of our series A convertible preferred stock, which was subsequently
      converted into 22,907,323 common
      shares. The officers and directors of Renewal Biodiesel assumed similar
      positions with us. Although we were the legal acquirer, Renewal Biodiesel was
      considered the accounting acquirer and as such the acquisition was accounted
      for
      as a reverse merger and recapitalization. As a result, the accompanying
      consolidated financial statements represent the results of operations and cash
      flows of the accounting acquirer (Renewal Biodiesel) from the date of its
      inception on March 9, 2007. Immediately prior to the reorganization, we had
      673,356 shares of common stock outstanding (10,100,210 prior to the 1-for-15
      reverse stock split) and net liabilities of $1,677,020, consisting of the
      following, at fair value:





Net
                liabilities assumed:Accounts
                payable
            
            $
            203,992Long
                term debt, including accrued interest
            
            
            1,473,028Net
                liabilities assumed
            
            $
            1,677,020




14




The
      net liabilities assumed primarily represent debt obligations to YA Global
      Investments, L.P. (f/k/a Cornell Capital Partners L.P) (herein “YA Global”) and
      were assumed in connection with the provision of additional long-term debt
      financing provided by YA Global (see Note 7), which additional funding was
      provided simultaneously with the reverse merger and recapitalization. In
      addition, the Company paid $180,000 in fees in connection with the additional
      debt funding provided by YA Global.




**Acquisition
      of Assets of FuelMeister Business**





On
      March
      9, 2007, Crivello Group, LLC (“Crivello”) and its wholly-owned subsidiary,
      Renewal Biodiesel, entered into an Asset Purchase Agreement with Biodiesel
      Solutions, Inc. (“BSI”), which was effective March 30, 2007. Pursuant to the
      Asset Purchase Agreement, BSI sold substantially all of the assets and property
      of its FuelMeister operations (the “FuelMeister Business” , the “Predecessor” or
      the “Predecessor Business”, an unrelated Company) to Renewal Biodiesel, in
      exchange for an aggregate purchase price of $500,000, subject to adjustment.
      Under the terms of the Agreement, the purchase price was subsequently adjusted
      to $494,426 to reflect the inventory on hand at closing. Of the adjusted
      purchase price, $100,000 was paid on execution of the Agreement as a down
      payment, $100,000 was paid at closing, $50,000 was paid on April 11, 2007,
      and
      the balance of the purchase price was paid by delivery of a promissory note,
      as
      amended, in the amount of $244,426. The promissory note was subsequently paid
      on
      April 20, 2007. The $250,000 cash portion of the $494,426 purchase price of
      the
      assets was funded by loans received from Crivello of $200,000 and cash of
      $57,279 received by Renewal Biodiesel from our founders for common stock. The
      loans from Crivello, together with the promissory note for $244,426, were repaid
      from the proceeds of loans from Cornell (see Note 6). The difference of
      $5,131,231 between the fair value of the 22,907,323 common shares issued to
      our
      founders as a result of the reverse merger described above, determined based
      on
      the trading price of $0.2265 per share immediately prior to the reorganization
      and reverse merger, and the amount they paid for their shares of Renewal
      Biodiesel of $57,279 has been recorded as stock-based transaction
      expense.





Renewal
      Biodiesel also entered into a management services agreement with BSI, pursuant
      to which BSI agreed to provide general management and administrative services
      to
      Renewal Biodiesel, as well as the use of its facilities. Renewal Biodiesel
      reimbursed BSI for the direct cost of services and facilities, as provided.
      The
      agreement terminated 90 days after the FuelMeister acquisition or upon ten
      days
      notice by Renewal Biodiesel. As discussed in Note 1, we acquired BSI on July
      2,
      2007, which effectively resulted in termination of the agreement.





The
      acquisition of the FuelMeister Business was accounted for by the purchase method
      in accordance with Financial Accounting Standards Board Statement No. 141 ("FAS
      141") and the results of its operations are included in these consolidated
      financial statements from the date of acquisition. The aggregate purchase price
      determined in accordance with FAS 141 was $494,426.





The
      following is a summary of the net assets acquired at the date of acquisition,
      at
      fair value:





Net
                assets acquired:Inventory
            
            $
            34,426Fixed
                assets
            
            
            9,145Website
                domain
            
            
            50,150Tradename
            
            
            118,000Customer
                lists, engineering drawings and other intangibles
            
            
            189,000Goodwill
            
            
            93,705Net
                assets acquired
            
            $
            494,426





15




**NOTE
      3**  **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Basis
      of** **Presentation**





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America for interim financial information and the instructions to Form 10-QSB
      and Rule 310 of Regulation SB of the Securities and Exchange Commission (the
      "SEC"). Accordingly, these consolidated financial statements do not include
      all
      of the footnotes required by accounting principles generally accepted in the
      United States of America. In management’s opinion, all adjustments (consisting
      of normal and recurring adjustments) considered necessary for a fair
      presentation have been included. Operating results for the three months ended
      June 30, 2007 are not necessarily indicative of the results that may be expected
      for the year ending December 31, 2007.





The
      accompanying unaudited consolidated financial statements, as of June 30, 2007
      and for the period March 9, 2007 (date of inception) through, June 30, 2007,
      are
      those of Renewal Fuels, Inc., the Successor. The statements of operations and
      of
      cash flows for the three months ended March 31, 2007 and for the three and
      six
      months ended June 30, 2006 are those of the FuelMeister Business, our
      Predecessor.





**Accounting
      Policies**





We
      have
      generally adopted the accounting policies of the Predecessor. Unless
      specifically stated, the accounting policies described below are the accounting
      policies of both the Successor and the Predecessor, which do not differ during
      all periods presented.





**Principles
      of Consolidation**





*Successor*





The
      consolidated financial statements include the accounts of Renewal Fuels, Inc.
      (“Renewal”) and its wholly owned subsidiary Renewal Biodiesel, Inc. (“Renewal
      Biodiesel”), from March 9, 2007, the date that Renewal Biodiesel was
      incorporated and, for Renewal, from April 20, 2007, the date of the reverse
      merger between Renewal Biodiesel and Renewal. All inter-company accounts and
      transactions have been eliminated in consolidation.





*Predecessor*





The
      accompanying financial statements of the FuelMeister business (the “FuelMeister
      Business” or the “Predecessor”, a carve-out business of Biodiesel Solutions,
      Inc. and a predecessor business of Renewal Biodiesel, which carve-out business
      was acquired by Renewal Biodiesel on March 30, 2007), are presented on a
      carved-out basis as if it had been an independent reporting entity for the
      periods presented. Certain revenue
      and expenses of Biodiesel have been allocated by management between the
      FuelMeister Business and the operations retained by Biodiesel, based either
      on
      specific attribution of those revenues and expenses or, where necessary and
      appropriate, based on management’s best estimate of an appropriate
      allocation.




**Use
      of Estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting periods
      presented. Estimates that are critical to the accompanying financial statements
      arise from our belief that we will secure an adequate amount of cash to continue
      as a going concern, and that all long-lived assets and inventories are
      recoverable. The markets for our products are characterized by intense
      competition, rapid technological development, evolving standards and short
      product life cycles, all of which could impact the future realization of our
      assets. Estimates and assumptions are reviewed periodically and the effects
      of
      revisions are reflected in the period that they are determined to be necessary.
      It is at least reasonably possible that our estimates could change in the near
      term with respect to these matters.




16




**Revenue
      Recognition**





Revenue
      from equipment and parts and accessories sales are generally recognized at
      the
      date of shipment and revenue from services is recognized when the services
      are
      performed and all substantial contractual obligations have been satisfied.





Our
      revenue recognition policy is consistent with the criteria set forth in SEC
      Staff Accounting Bulletin 104, “Revenue Recognition in Financial Statements”
(“SAB 104”) for determining when revenue is realized or realizable and earned.
      In accordance with the requirements of SAB 104, we recognize revenue when (1)
      persuasive evidence of an arrangement exists; (2) delivery has occurred; (3)
      our
      price to the buyer is fixed or determinable and (4) collectibility of the
      receivables is reasonably assured.





**Cash
      and Cash Equivalents**





We
      consider all highly liquid instruments purchased with an original maturity
      of
      three months or less to be cash equivalents.




**Inventories**





Inventories
      are stated at the lower of cost or market with cost determined using a first-in,
      first-out basis. At June 30, 2007, inventories consisted of finished goods,
      materials, and displays amounting to $12,187 and $37,741 and $1,533,
      respectively.





**Property
      and Equipment**





Property
      and equipment are stated at cost. Major additions are capitalized, while minor
      additions and maintenance and repairs, which do not extend the useful life
      of an
      asset, are expensed as incurred. Depreciation and amortization are provided
      using the straight-line method over the estimated useful lives of the respective
      assets, which range from 3 to 7 years.





We
      evaluate the carrying value of property and equipment when events and
      circumstances warrant such a review. If the carrying values of the assets are
      considered to be impaired, a loss is recognized based on the amount by which
      the
      carrying value exceeds the fair market value of the asset. We have not
      experienced any impairment of our property and equipment.





**Intangible
      Assets**





Intangible
      assets, consisting primarily of customer lists, engineering drawings and other
      intangibles acquired as par t of the acquisition of the FuelMeister Business,
      are amortized over their estimated useful lives, which range from 1 to 15
      years.




17





**Stock-Based
      Compensation**





In
      accordance with Financial Accounting Standards No. 123 (“FAS 123 (Revised)”), *Share-Based
      Payments* ,
      we
      account for equity instruments issued to employees for services based on the
      fair value of the equity instruments issued, and account for equity instruments
      issued to those other than employees based on the fair value of the
      consideration received, or the fair value of the equity instruments, whichever
      is more readily measurable. We anticipate that the shares issued upon exercise
      of any stock option would be obtained from our authorized and unissued
      shares.





**Derivative
      Instruments and Beneficial Conversion Features**





We
      do not
      use derivative instruments to hedge exposures to cash flow, market, or foreign
      currency risks.





We
      review
      the terms of convertible debt and equity instruments we issue to determine
      whether there are embedded derivative instruments, including the embedded
      conversion option, that are required to be bifurcated and accounted for
      separately as a derivative financial instrument. When the ability to physical
      or
      net-share settle the conversion option is deemed to be not within the control
      of
      the company, the embedded conversion option may be required to be accounted
      for
      as a derivative financial instrument liability. In circumstances where the
      convertible instrument contains more than one embedded derivative instrument,
      including the conversion option, that is required to be bifurcated, the
      bifurcated derivative instruments are accounted for as a single, compound
      derivative instrument. In connection with the sale of convertible debt and
      equity instruments, we may also issue freestanding options or warrants. We
      may
      also issue options or warrants to non-employees in connection with consulting
      or
      other services they provide. Depending on their terms, these options and
      warrants may be accounted for as derivative instrument liabilities, rather
      than
      as equity.





Certain
      instruments, including convertible debt and equity instruments and the
      freestanding options and warrants issued in connection with those convertible
      instruments, may be subject to registration rights agreements, which impose
      penalties for failure to register the underlying common stock by a defined
      date.
      These potential cash penalties are accounted for in accordance with FAS No.
      5, *Accounting
      for Contingencies.*




Derivative
      financial instruments are initially measured at their fair value. For derivative
      financial instruments that are accounted for as liabilities, the derivative
      instruments are re-valued at each reporting date, with changes in the fair
      value
      reported as charges or credits to income. For option-based derivative financial
      instruments, we use the Cox-Ross-Rubinstein binomial option pricing model to
      value the derivative instruments. To the extent that the initial fair values
      of
      the freestanding and/or bifurcated derivative instrument liabilities exceed
      the
      total proceeds received, an immediate charge to income is recognized, in order
      to initially record the derivative instrument liabilities at their fair value.
      The classification of derivative instruments, including whether such instruments
      should be recorded as liabilities or as equity, is re-assessed periodically,
      including at the end of each reporting period. If re-classification is required,
      the fair value of the derivative instrument, as of the determination date,
      is
      re-classified. Any previous charges or credits to income for changes in the
      fair
      value of the derivative instrument are not reversed.





When
      the
      embedded conversion option in a convertible debt instrument is not required
      to
      be bifurcated and accounted for separately as a derivative instrument, we review
      the terms of the instrument to determine whether it is necessary to record
      a
      beneficial conversion feature, in accordance with EITF Issues 98-05 and 00-27.
      When the effective conversion rate of the instrument at the time it is issued
      is
      less than the fair value of the common stock into which it is convertible,
      we
      recognize a beneficial conversion feature, which is credited to equity and
      reduces the initial carrying value of the instrument.




18





When
      convertible debt or equity instruments are initially recorded at less than
      their
      face value as a result of allocating some or all of the proceeds received to
      derivative instrument liabilities or to a beneficial conversion feature, the
      discount from the face amount, together with the stated interest on the
      instrument, is amortized over the life of the instrument through periodic
      charges to income, using the effective interest method.





**Registration
      Payment Arrangements**





Certain
      instruments, including convertible debt and equity instruments and the
      freestanding options and warrants issued in connection with those convertible
      instruments, are subject to registration rights agreements, which impose
      penalties for our failure to register the underlying common stock by a defined
      date. These potential cash penalties, which are referred to as registration
      payment arrangements, are recorded when payments are both probable and
      reasonably estimable, in accordance with FAS No. 5, *Accounting
      for Contingencies.* As
      of June 30, 2007 we are in default of certain registration rights agreements
      and
      the investors had certain rights to demand payments. However, the investors
      have
      not demanded payment, nor have they indicated that they will demand payment.
      After consultation with investors and other actions we considered necessary,
      we
      have concluded that the probability of payment has not risen to a level that
      would require an accrual. Further, on November 13, 2007, we obtained an
      agreement with the investors wherein they explicitly waived their rights to
      any
      payments that they may otherwise be entitled to as of that date. Such rights
      were not waived as to periods subsequent to November 13, 2007 and, accordingly,
      we will continue to evaluate the need to accrue payments in future periods
      until
      all of our obligations under the registration rights agreements have been
      fulfilled. (See Note 6-Long Term Debt for additional
      information.)





**Research
      and Development Costs**





Research
      and development costs related to product development are expensed as incurred.
      No such costs were incurred during the periods covered by these financial
      statements.





**Advertising
      Costs**





Advertising
      costs are expensed as incurred. For the three months ended June 30, 2007 and
      the
      period from March 9, 2007 (date of inception) to June 30, 2007, advertising
      costs were $43,815 and $43,983, respectively.





**Shipping
      and Handling Costs**





Shipping
      and handling costs are reported as a component of cost of sales. ******





**Net
      Income (Loss) Per Share**





We
      compute net income (loss) per share in accordance with FAS No. 128, *Earnings
      per Share* (“FAS
      128”), and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions
      of FAS 128 and SAB 98, basic net income (loss) per share is computed by dividing
      the net income (loss) available to common stockholders for the period by the
      weighted average number of common shares outstanding during the period. Diluted
      net income (loss) per share is computed by dividing the net loss for the period
      by the number of common and common equivalent shares outstanding during the
      period. Because of our net losses in 2007, none of these common stock equivalent
      shares are dilutive; accordingly basic and diluted net loss per share are
      identical for each of the periods in the accompanying statements of
      operations.





**Income
      Taxes**




19





*Successor*





We
      account for income taxes under the liability method, in accordance with FAS
      No.
      109, *Accounting
      for Income Taxes* .
      Under
      the liability method of FAS 109, deferred income taxes are recognized for the
      tax consequences of temporary differences by applying enacted statutory rates
      applicable to future years to differences between the tax bases of assets and
      liabilities and their financial statement carrying amounts. Also, the effect
      on
      deferred taxes of a change in tax rates is recognized in income in the period
      that included the enactment date.





*Predecessor*





Through
      December 31, 2006, the Predecessor’s stockholder elected under the Internal
      Revenue Code to be taxed as an S Corporation. In lieu of corporate income taxes,
      the stockholders of S Corporations are taxed on their proportionate share of
      a
      company’s taxable income. Accordingly, no provision or liability for federal
      income taxes has been included in the accompanying Predecessor financial
      statements.





Effective
      January 1, 2007, and in connection with the amendment and restatement of the
      Predecessor’s articles of incorporation, the Predecessor became a C corporation
      and therefore became subject to income taxes. From January 1, 2007, the
      Predecessor accounted for income taxes under the liability method. The
      Predecessor’s financial statements do not include a pro forma provision for
      income taxes (as if it were a C corporation for the periods presented) in
      accordance with FAS 109, because the overall provision (benefit) for all periods
      presented would have been zero as (1) any current income taxes due would have
      been reduced to zero through a deferred income tax benefit (as a result of
      a
      carry forward of prior year net operating losses and because (2) the net
      deferred income tax assets arising from the remaining net operating loss
      carryforwards and other temporary differences existing at March 31, 2007 would
      have been fully reserved by a valuation allowance.





**Impact
      of Recently Issued Accounting Pronouncements**





The
      Financial Accounting Standards Board has recently issued several Financial
      Accounting Standards, as summarized below. None of these statements have had,
      or
      are expected to have, a significant effect on our financial
      statements.





Issued
            
            StatementFebruary
                2006
            
            FAS
                155 - “Accounting for Certain Hybrid Financial Instruments; an amendment
                of Financial Accounting Standard Nos. 133 and 140"March
                2006
            
            FAS
                156 - “Accounting for Servicing of Financial Assets, an amendment of FASB
                Statement No. 140, Accounting for Transfers and Servicing of Financial
                Assets and Extinguishments of Liabilities”June
                2006
            
            FAS
                Interpretation 48 - "Accounting for Uncertainty in Income
                Taxes"September
                2006
            
            FAS
                157 - “Fair Value Measurements”September
                2006
            
            FAS
                158 - “Employers’ Accounting for Defined Benefit Pension and Other
                Postretirement Plans” - an amendment of FASB Statements No. 87, 88, 106,
                and 132(R)”February
                2007
            
            FAS
                159 - “The Fair Value Option for Financial Assets and Financial
                Liabilities—Including an amendment of FASB Statement No.
                115”





20





**NOTE
      4**   **FINANCIAL
      INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK**





We
      believe the book value of our cash, accounts payable and accrued expenses
      approximates their fair values due to their short-term nature.





We
      sell
      products to value added distributors and other customers and generally require
      payment in advance or at the time of sale. Periodically, we extend credit based
      on an evaluation of the customer's financial condition, generally without
      requiring collateral. Our terms for our accounts receivable are generally net
      30
      days. As such, exposure to losses on receivables is principally dependent on
      each customer's financial condition.  We monitor our exposure to credit
      losses and maintain allowances for any anticipated losses.  At June 30,
      2007, we did not have any accounts receivable. Our ability to collect
      receivables arising in the future may be affected by economic
      fluctuations.





We
      maintain all of our cash in deposit accounts with one financial institution,
      which deposit accounts at times may exceed federally insured limits.  We
      have not experienced any losses in such accounts.





**NOTE
      5 PROPERTY AND EQUIPMENT**





At
      June
      30, 2007, property and equipment consists of the following:





Computer
                equipment and software
            
            $
            50,792Production
                and shop equipment
            
            
            7,051Office
                furniture and equipment
            
            
            1,05858,901Less
                accumulated depreciation and amortization
            
            
            1,229Property
                and equipment - net
            
            $
            57,672





Depreciation
      expense is included in other operating expenses in the accompanying statements
      of operations.





**NOTE
      6**  **INTANGIBLE
      ASSETS**





The
      following table summarizes amortized and unamortized intangible
      assets:





As
                of June 30, 2007Gross
                Carrying Amount
            
            Accumulated
                Amortization
            
            Net
                Carrying AmountAmortized
                Intangible Assets:Customer
                lists
            
            $
            70,000
            
            $
            1,167
            
            $
            68,833Engineering
                drawings
            
            
            70,000
            
            
            3,500
            
            
            66,500Non-compete
                agreement
            
            
            46,000
            
            
            5,750
            
            
            40,250Tradename
            
            
            118,000
            
            
            2,950
            
            
            115,050Patent
                application
            
            
            3,000
            
            
            750
            
            
            2,250$
            307,000
            
            $
            14,117
            
            $
            292,883Unamortized
                Intangible Assets:Goodwill
            
            
            93,705$
            93,705Aggregate
                Amortization Expense:Quarter
                ended June 30, 2007
            
            $
            14,117Estimated
                Amortization Expense:Year
                ending December 31, 2007
            
            
            
            
            
            
            
            $
            28,234Year
                ending December 31, 2008
            
            
            
            
            
            
            
            
            54,217Year
                ending December 31, 2009
            
            
            
            
            
            
            
            
            36,217Year
                ending December 31, 2010
            
            
            
            
            
            
            
            
            30,467Year
                ending December 31, 2011
            
            
            
            
            
            
            
            
            30,467Year
                ending December 31, 2012
            
            
            
            
            
            
            
            
            19,967Thereafter
            
            
            
            
            
            
            
            
            93,314$
            292,883




21




Amortized
      intangible assets acquired during the period ended June 30, 2007 have a
      weighted-average amortization period of approximately
      6 years.





**NOTE
      7 LONG-TERM DEBT**





At
      June
      30, 2007, long-term debt consists of the following:





New
                ObligationsCornell
                Capital Partners L.P., $1,000,000 convertible debenture, due April
                20,
                2009, interest at prime + 2.75% (11% at June 30, 2007)
            
            $
            1,000,000Less
                unamortized discount from warrants and beneficial conversion
                feature
            
            
            (385,427
            )614,573Cornell
                Capital Partners L.P., $400,000 convertible debenture, due May 31,
                2009,
                interest at prime + 2.75% (11% at June 30, 2007)
            
            
            400,000Less
                unamortized discount from beneficial conversion feature
            
            
            (396,504
            )3,496Prior
                Obligations (in default)Montgomery
                Equity Partners, Ltd., $300,000 15% convertible debenture, due on
                demand,
                including accrued interest of $67,685
            
            
            367,685Montgomery
                Equity Partners, Ltd., $537,220 15% convertible debenture, due on
                demand,
                including accrued interest of $121,206
            
            
            658,426Cornell
                Capital Partners L.P., $85,100 6.5% convertible promissory note,
                due on
                demand, including accrued interest of $61,000
            
            
            146,100LH
                Financial, $156,080 18.0% convertible promissory note, due on demand,
                including accrued interest of $94,495
            
            
            250,5752,040,855Less:
                current maturities
            
            
            1,276,686Long-term
                debt
            
            $
            764,169





22





On
      April
      20, 2007, the Company entered into a Securities Purchase Agreement (the
      "Purchase Agreement") with Cornell Capital Partners L.P. ("Cornell") providing
      for the sale by the Company to Cornell of its secured convertible debentures
      in
      the aggregate principal amount of $1,400,000 (the "New Debentures") of which
      $1,000,000 was advanced immediately. The second instalment of $400,000 was
      funded on May 31, 2007, following clearance by the Securities and Exchange
      Commission (the “SEC”) of an information statement disclosing shareholder
      approval of the issuance of the Preferred Stock to the former shareholders
      of
      Renewal Biodiesel.





The
      New
      Debentures bear interest at the prime rate plus 2.75% (but not less than 10%)
      and mature on April 20, 2009 and May 31, 2009 (the "Maturity Dates"). The
      Company is not required to make any payments until the Maturity Dates. The
      holder of the New Debentures (the "Holder") may convert at any time principal
      amounts outstanding under the New Debentures into shares of common stock of
      the
      Company at a conversion price per share equal to the lower of (a) $0.60 or
      (b)
      80% of the lowest closing bid price of the common stock during the ten trading
      days immediately preceding the conversion date. The Company has the right to
      redeem a portion or all amounts outstanding under the New Debentures prior
      to
      the Maturity Dates at a 15% redemption premium provided that (i) the closing
      bid
      price of the common stock is less than the fixed conversion price of the New
      Debentures; (ii) the underlying shares are subject to an effective registration
      statement; and (iii) no event of default has occurred and is continuing. The
      New
      Debentures contain standard anti-dilution adjustments for stock splits and
      similar events. In the event that the Company sells or otherwise issues common
      stock at a price below the current conversion price, the fixed conversion price
      will be reduced to such lower price. If an Event of Default occurs, as defined
      in the New Debentures, the holder may demand immediate repayment of all amounts
      due under the New Debentures. In addition to non-payment of principal or
      interest when due, defaults under other obligations and bankruptcy or similar
      events, the Events of Default include a Change in Control of the Company, the
      Company’s failure to file, achieve or maintain effectiveness of the required
      registration statement (see below) if registration has been demanded by the
      Holder of the New Debentures, and the failure to maintain the listing of the
      Company’s common stock on a recognized exchange. Certain of these Events may
      constitute derivative instruments. When the risks and rewards of such derivative
      instruments are not clearly and closely related to the risks and rewards
      associated with the New Debentures, the effect of these Events is considered
      in
      valuing any compound derivative instrument that may be bifurcated from the
      New
      Debentures.





The
      obligations to Cornell, together with prior obligations to Cornell described
      below, are secured by a security interest in the Company’s assets, including its
      intellectual property. In addition, the Company pledged the shares of Renewal
      Biodiesel to Cornell as additional security for the obligations to
      Cornell.





Under
      the
      Purchase Agreement, the Company also issued to Cornell five-year warrants to
      purchase 1,200,000 shares of common stock at an exercise price of $0.15 per
      share.





In
      connection with the Purchase Agreement, the Company also entered into a
      registration rights agreement with Cornell (the "Registration Rights Agreement")
      providing for the filing of a registration statement (the "Registration
      Statement") with the SEC registering the common stock issuable upon conversion
      of the New Debentures and exercise of the warrants. Upon written demand from
      the
      Holder, the Company is obligated to file a Registration Statement within 45
      days
      of such demand and to use its best efforts to cause the Registration Statement
      to be declared effective no later than 150 days following receipt of such
      demand. The Company is also required to ensure that the Registration Statement
      remains in effect until all of the shares of common stock issuable upon
      conversion of the New Debentures and exercise of the warrants have been sold
      or
      may be sold without volume restrictions pursuant to Rule 144(k) promulgated
      by
      the SEC. In the event of a default of its obligations under the Registration
      Rights Agreement, including its agreement with respect to the filing and
      effectiveness dates for the Registration Statement, the Company is required
      to
      pay to Cornell, as liquidated damages, for each thirty day period that the
      Registration Statement has not been filed or declared effective, as the case
      may
      be, a cash amount equal to 2% of the face amount of the Debentures, not to
      exceed 24%. As of August 13, 2007, no demand for registration has been received
      by the Company.




23




**Prior
      Obligations** **(in
      default)**





On
      April
      20, 2007, as part of the net liabilities assumed on the reverse merger, the
      Company assumed certain existing obligations to Cornell and other entities.
      These obligations included two existing 15% convertible debenture obligations
      dated December 27, 2005 due to Montgomery Equity Partners, Ltd, an affiliate
      of
      Cornell (the “Old Debentures”), in the face amounts of $537,220 and $300,000,
      together with accrued interest at April 20, 2007 of $105,310 and $58,808,
      respectively. The Old Debentures were due on December 27, 2006 and,
      accordingly, are in default for non-payment of principal and
      interest .
      In
      connection with one of these Old Debentures, the Company previously issued
      warrants to purchase 6,666 shares of common stock at an exercise price of $0.015
      per share. As amended on May 31, 2007, the Old Debentures are
      convertible into shares of common stock at a conversion price per share equal
      to
      the lesser of (a) $0.60 or (b) 80% of the lowest closing bid price of the common
      stock during the ten trading days immediately preceding the conversion
      date .





In
      connection with these Old Debentures, the Company was obligated to file a Registration Statement with the SEC, registering the shares
      issuable on conversion of the Old Debentures and the Old Warrants. The Company did not
      filed the required registration statement (which was required to be filed by
      March 27, 2006 and effective by May 26, 2006). As
      a result, under
      the terms of the Old Debentures, the Company was required
      to pay to Cornell, as liquidated damages, for each thirty day period that the
      Registration Statement has not been filed or declared effective, as the case
      may
      be, a cash amount equal to 2% of the face amount of the Old Debentures. However,
      recognition of damages is subject to consideration of both the probability
      of
      incurring damages and whether amounts are estimable. Based upon direct dialog,
      and as further discussed in the next paragraph, the Company did not record
      damages in any of the periods presented.





On
      November 13, 2007, the Company confirmed its conclusions related to
      non-recognition of liquidated damages that could arise from registration rights
      afforded investors of the Prior Obligations, in default, described in Note
      7,
      and obtained a formal waiver of any amounts due under those arrangements through
      the date of the waiver. The waiver does not extend to periods beyond the
      effective date and, accordingly, those investors may acquire rights to
      liquidated damages in future periods. As provided in the Company’s policies for
      accounting for registration payment arrangements, continuous evaluation of
      the
      probability of incurring damages is required and will be performed
      periodically.





The
      Company also assumed the remaining portions of a convertible promissory note
      that was originally issued in 2000. A portion of the note is held by Cornell
      and
      a portion is held by entities associated with LH Financial. The notes are
      convertible into shares of common stock at a conversion price per share equal
      to
      85% of the average of the five lowest closing bid prices of the common stock
      during the 22 trading days immediately preceding the conversion date. During
      the
      period April 21, 2007 to June 30, 2007, Cornell converted an aggregate principal
      amount of $82,900 of the promissory note held by it into 224,447 common shares.
      Subsequent to June 30, 2007, Cornell converted the remaining principal amount
      of
      the note held by it of $85,100, together with all accrued interest, aggregating
      $61,000, into 350,359 shares of common stock.




24





The
      remaining Prior Obligations as of June 30, 2007 are in default for non-payment
      of principal and interest when such amounts became due. The investors rights
      under these circumstances provide for acceleration (or post-maturity date,
      demand payment) in cash at the face value plus accrued interest or shares,
      based
      upon the contractual conversion option embedded in the arrangements. On November
      13, 2007, the Company received a waiver of default remedies under the remaining
      Prior Obligations that was effective for periods through that date. The waiver
      does not extend to periods subsequent to November 13, 2007. While the investors
      have not indicated their intention to call the Prior Obligations, they have
      the
      right to do so and, accordingly, the Company is required to carry these
      obligations as current liabilities until receipt of a waiver that is effective
      for a period beyond a year or the settlement of the arrangement through payment
      or conversion.




**Subsequent
      Event - Additional Financing**





On
      July
      2, 2007, the Company entered into an additional Securities Purchase Agreement
      (the "Additional Purchase Agreement") with Cornell providing for the sale by
      the
      Company to Cornell of its secured convertible debentures in the aggregate
      principal amount of $2,700,000 (the "Additional Debentures") of which $2,000,000
      was advanced immediately. The second installment of $700,000 will be funded
      within two business days after the Company has unconditionally booked and
      received at least a 50% deposit for the sale of at least one BiodieselMaster
      Unit.





The
      interest rate, repayment terms, conversion rights, conversion price,
      anti-dilution provisions, redemption provisions, events of default and
      registration requirements of the Additional Debentures are identical to those
      of
      the New Debentures described above, except that the fixed element of the
      conversion price is $0.75, not $0.60.





The
      obligations to Cornell, together with prior obligations to Cornell, are secured
      by a security interest in the Company’s assets and the assets of its
      subsidiaries, including their intellectual property. In addition, the Company
      pledged the shares of BSI to Cornell as additional security for the obligations
      to Cornell.





Under
      the
      Additional Purchase Agreement, the Company also issued to Cornell five-year
      warrants to purchase 2,250,000 shares of common stock at an exercise price
      of
      $0.90 per share.





**Derivative
      Instrument Liabilities and Beneficial Conversion Feature**





In
      accounting for the Convertible Debentures and the associated Warrants, the
      Company has considered the requirements of EITF
      Issue 00-19, "Accounting for Derivative Financial Instruments Indexed To, and
      Potentially Settled In, a Company's Own Common Stock". Because
      the number of shares that may be required to be issued on conversion of the
      Convertible Debentures is dependent on the price of the Company’s common stock,
      the number of shares ultimately required is indeterminate. However, full
      conversion of the outstanding Convertible Debentures and exercise of outstanding
      Warrants (including those Debentures and Warrants issued subsequent to June
      30,
      2007), together with currently outstanding common stock and all other currently
      existing requirements to issue common stock, require the Company to have
      approximately 45 million common shares authorized. The Company is authorized
      to
      issue 3 billion common shares. As a result, management of the Company believes
      it will have sufficient authorized shares available to physically settle all
      contracts that currently require delivery of common shares. Furthermore,
      management of the Company, together with investors associated with management,
      control a majority of the outstanding common shares of the Company. Accordingly,
      management of the Company believes it is in a position to secure shareholder
      approval of an increase in the authorized number of shares, should such an
      increase be required in the future. As a result of management’s conclusion that
      it will have sufficient authorized shares available to settle all outstanding
      contracts requiring delivery of common shares, the conversion option embedded
      in
      the Convertible Debentures has not been bifurcated and the Warrants issued
      in
      connection with the Convertible Debentures have been accounted for as equity
      instruments.




25





The
      Company has also reviewed the terms of the Convertible Debentures to determine
      whether there are embedded derivative instruments, other than the conversion
      option, that may be required to be bifurcated and accounted for separately
      as
      derivative instrument liabilities. Certain events of default associated with
      the
      Convertible Debentures, including failure to effect or maintain registration
      when required, the failure to maintain the listing of the Company’s common stock
      on a recognized exchange and similar events, have risks and rewards that are
      not
      clearly and closely associated with the risks and rewards of the debt
      instruments in which they are embedded. However, events of default serve only
      to
      permit the holder to demand repayment and do not require the Company to pay
      any
      premium on default. Accordingly, these embedded derivative instruments are
      considered to have minimal, if any, value.





If
      the
      effective conversion price for a Convertible Debenture is less than the market
      value of the underlying shares at the time the debenture is issued, the Company
      recognizes a beneficial conversion feature in accordance with EITF Issues 98-05
      and 00-27. The value of the beneficial conversion feature, which is credited
      to
      additional paid-in capital, reduces the initial carrying amount of the
      debenture. During the period ended June 30, 2007, the Company recorded
      beneficial conversion features aggregating $923,841.





The
      discount from the face amount of the Convertible Debentures represented by
      the
      value initially assigned to any associated Warrants and to any beneficial
      conversion feature is amortized over the period to the due date of each
      Convertible Debenture, using the effective interest method. Included in the
      beneficial conversion feature of $923,841 recorded during the period ended
      June
      30, 2007 is $333,574 related to debentures assumed by the Company on the reverse
      merger described in Note 2. Because those debentures are past due, the discount
      from the face amount of the debentures was immediately expensed and is included
      in interest expense for the period.




For
      warrants and option-based derivative instruments, the Company estimates fair
      value using the Cox-Ross-Rubinstein binomial valuation model, based on the
      market price of the common stock on the valuation date, an expected dividend
      yield of 0%, a risk-free interest rate based on constant
      maturity rates published by the U.S. Federal Reserve applicable to the remaining
      term of the instruments ,
      and an
      expected life equal to the remaining term of the instruments. Because
      of the limited historical trading period of our common stock, the expected
      volatility of our common stock over the remaining life of the conversion options
      and Warrants has been estimated at 123%, based on a review of the volatility
      of
      entities considered by management as most comparable to our
      business.





**NOTE
      8 LEASE COMMITMENTS**





***Operating
      Lease***





Prior
      to
      the acquisition of BSI on July 2, 2007, the Company leased operating space
      and
      other services from BSI under a 90 day agreement, which expired on June 30,
      2007.





BSI’s
      operating facility is leased under an operating lease agreement. The lease
      term
      is from November 1, 2004 through October 31, 2007. Payments required under
      this
      lease range from approximately $4,300 to $4,500 per month, plus a share of
      the
      operating costs, estimated to be $900 per month. Beginning in January 2006,
      Biodiesel entered into an additional operating lease for additional facilities.
      The lease term is from January 1, 2006 to October 31, 2008. Payments required
      under this lease approximate $11,000 per month, plus a share of operating costs,
      estimated to be $3,000 per month.




26





**NOTE
      9 CAPITAL STOCK**





The
      authorized capital stock of the Company is 3,020,000,000 shares, consisting
      of
      3,000,000,000 shares of Common Stock, par value $0.001 per shares and 20,000,000
      shares of Preferred Stock, par value $0.001 per share.





The
      Board
      of Directors is authorized to divide the 20,000,000 shares of Preferred Stock
      into one or more series, and to determine for each such series its designation,
      the number of shares of such series, the powers, preferences and rights and
      the
      qualifications, limitations or restrictions for the shares of such series.
      The
      Board of Directors has designated 343,610 shares as Series A Convertible
      Preferred Stock. These shares were issued in exchange for the acquisition of
      Renewal Biodiesel, as described in Notes 1 and 2. On June 21, 2007 all of the
      holders converted their shares of Series A Convertible Preferred Stock into
      22,907,323 shares of the Company’s common stock. At June 30, 2007, no shares of
      Preferred Stock were outstanding.





**Common
      Stock**





Holders
      of the Company’s common stock are entitled to one vote for each share on all
      matters submitted to a stockholder vote. Holders of common stock do not have
      cumulative voting rights. Therefore, holders of a majority of the shares of
      common stock voting for the election of directors can elect all of the
      directors. Holders of the Company’s common stock representing a majority of the
      voting power of the Company’s capital stock issued, outstanding and entitled to
      vote, represented in person or by proxy, are necessary to constitute a quorum
      at
      any meeting of stockholders. A vote by the holders of a majority of the
      Company’s outstanding shares is required to effectuate certain fundamental
      corporate changes such as liquidation, merger or an amendment to the Company’s
      articles of incorporation.





Holders
      of the Company’s common stock are entitled to share in all dividends that the
      Board of Directors, in its discretion, declares from legally available funds.
      In
      the event of liquidation, dissolution or winding up, each outstanding share
      entitles its holder to participate pro rata in all assets that remain after
      payment of liabilities and after providing for each class of stock, if any,
      having preference over the common stock. The Company’s common stock has no
      pre-emptive rights, no conversion rights and there are no redemption provisions
      applicable to the Company’s common stock.





**Preferred
      Stock**





Holders
      of the Company’s Preferred Stock are entitled to one vote for each share on all
      matters submitted to a preferred stockholder vote. Holders do not have a right
      to vote with the common stockholders. Holders of Preferred Stock do not have
      cumulative voting rights. Holders of the Company’s Preferred Stock representing
      a majority of the voting power of the Company’s Preferred Stock issued,
      outstanding and entitled to vote, represented in person or by proxy, are
      necessary to constitute a quorum at any meeting of Preferred stockholders.
      Holders of the Company’s Preferred Stock are entitled to share in all dividends
      that the Board of Directors, in its discretion, declares from legally available
      funds.





**NOTE
      10 STOCK OPTION PLANS**





On
      July
      10, 2007, the majority stockholders approved the 2007 Stock Incentive Stock
      Plan
      (the "2007 Incentive Plan") and authorized 1,000,000 shares of common stock
      for
      issuance of stock awards and stock options thereunder. As of August 13, 2007,
      no
      stock awards or stock options have been issued under the 2007 Incentive
      Plan.




27





Under
      the
      2007 Incentive Plan, options may be granted which are intended to qualify as
      Incentive Stock Options ("ISOs") under Section 422 of the Internal Revenue
      Code
      of 1986 (the "Code") or which are not ("Non-ISOs") intended to qualify as
      Incentive Stock Options thereunder. The primary purpose of the 2007 Incentive
      Plan is to attract and retain the best available personnel for the Company
      by
      granting stock awards and stock options in order to promote the success of
      the
      Company's business and to facilitate the ownership of the Company's stock by
      employees. The 2007 Incentive Plan will be administered by the Company's Board
      of Directors, as the Board of Directors may be composed from time to time.





Under
      the
      2007 Incentive Plan, stock awards and options may be granted to key employees,
      officers, directors or consultants of the Company. The purchase price of the
      common shares subject to each ISO shall not be less than the fair market value
      (as set forth in the 2007 Incentive Plan), or in the case of the grant of an
      ISO
      to a Principal Stockholder, not less that 110% of fair market value of such
      common shares at the time such Option is granted. The purchase price of the
      common shares subject to each Non-ISO shall be determined at the time such
      Option is granted, but in no case less than 85% of the fair market value of
      such
      common shares at the time such Option is granted.





**NOTE
      11 OTHER COMMITMENTS AND CONTINGENCIES**





As
      described in Note 6, the Company entered into a Registration Rights Agreement
      with Cornell providing for the filing of a registration statement with the
      SEC
      registering the common stock issuable upon conversion of the debentures and
      exercise of the warrants sold to Cornell. Upon written demand from Cornell,
      the
      Company is obligated to file a Registration Statement within 45 days and to
      use
      its best efforts to cause the Registration Statement to be declared effective
      no
      later than 150 days following receipt of such demand. The Company is also
      required to ensure that the Registration Statement remains in effect until
      all
      of the shares of common stock issuable upon conversion of the debentures and
      exercise of the warrants have been sold or may be sold without volume
      restrictions pursuant to Rule 144(k). In the event of a default of its
      obligations under the Registration Rights Agreement, the Company is required
      to
      pay to Cornell, for each thirty day period that the Registration Statement
      has
      not been filed or declared effective, a cash amount equal to 2% of the face
      amount of the Debentures, not to exceed 24%. As of August 13, 2007, no demand
      for registration has been received by the Company. See
      Note 12, below, for related events.




As
      described below in Note 11, on July 10, 2007 the Company executed a letter
      of
      intent to acquire North Shore Energy Technologies ("North Shore"), a sustainable
      energy company planning to build a bio-refinery capable of economically
      converting wood waste into highly-versatile methanol.





**NOTE
      12 SUBSEQUENT EVENTS**





**Acquisition
      of BSI**





On
      July
      2, 2007, the Company and its wholly-owned subsidiary BSI Acquisitions, Inc.
      (“BSI Acquisitions”) entered into a merger agreement (the “BSI Merger
      Agreement”) with Biodiesel Solutions, Inc. (“BSI”), from whom Renewal Biodiesel
      had acquired the FuelMeister Business. Pursuant to the BSI Merger Agreement,
      BSI
      Acquisitions was merged with and into BSI and the Company thus acquired all
      of
      the remaining business of BSI, other than the FuelMeister Business which was
      previously acquired as a result of the reverse merger with Renewal Biodiesel.
      The former shareholders of BSI were issued an aggregate of 3,266,667 shares
      of
      common stock of the Company (49,000,000 shares prior to the 1-for-15 reverse
      stock split), 1,000,000 shares of BSI series B convertible preferred stock
      (the
“BSI Preferred Stock”) and $500,000 in cash. The Company also issued an
      aggregate of 66,667 shares of common stock of the Company (1,000,000 shares
      prior to the 1-for-15 reverse stock split) and an aggregate of 133,333 options
      (2,000,000 prior to the reverse stock split) to purchase shares of common stock
      of the Company to the individuals, other than officers of BSI, employed by
      BSI.
      The BSI Preferred Stock is immediately convertible at the option of the holders
      into common stock of the Company at a conversion price per share equal to the
      greater of (i) $0.75, or (ii) the average closing price of the common stock
      during the ten trading days immediately preceding the conversion date. Prior
      to
      the acquisition of BSI, the Company loaned $200,000 to BSI under an 8%, 180
      day
      secured promissory note, due November 24, 2007. Upon the acquisition of BSI,
      the
      note was forgiven and recorded as a capital contribution to BSI.




28





BSI
      manufactures the BiodieselMaster®, a factory-built biodiesel processing plant
      that is designed to produce 350,000 gallons of biodiesel per year and which
      is
      appropriately scaled for a variety of customers, including small communities,
      farms, farm co-ops and trucking fleets. The design provides a biodiesel
      production system that is continuous, flexible, efficient, affordable, and
      fully-automated. The automated control system minimizes labor costs and
      facilitates remote diagnostics.





**Additional
      Financing**





On
      July
      2, 2007, as described in Note 6, the Company entered into a Securities Purchase
      Agreement (the "Additional Purchase Agreement") with Cornell providing for
      the
      sale by the Company to Cornell of its secured convertible debentures in the
      aggregate principal amount of $2,700,000 (the "Additional Debentures") of which
      $2,000,000 was advanced immediately. The second installment of $700,000 will
      be
      funded within two business days after the Company has unconditionally booked
      and
      received at least a 50% deposit for the sale of at least one BiodieselMaster
      Unit. Under the Additional Purchase Agreement, the Company also issued to
      Cornell five-year warrants to purchase 2,250,000 shares of common stock at
      an
      exercise price of $0.90 per share.





**Change
      of Domicile**





On
      July
      9, 2007, the Company, which was a New Jersey entity (“Tech Labs-NJ”), entered
      into an Agreement and Plan of Merger with Tech Laboratories, Inc., a
      Delaware entity (“Tech Labs - DE”) under which Tech Labs - NJ and Tech Labs - DE
      were merged with and into the surviving corporation, Tech Labs - DE, whose
      name
      was subsequently changed on August 1, 2007 to Renewal Fuels, Inc. The
      certificate of incorporation and bylaws of the surviving corporation became
      the
      certificate of incorporation and bylaws of the Company, and the directors and
      officers in office of the surviving corporation became the directors and
      officers of the Company.





**Reverse
      Stock Split**





On
      July
      10, 2007, the majority stockholders of the Company authorized a 1-for-15 reverse
      stock split pursuant to which, on August 1, 2007,  the 357,076,887 shares
      of Common Stock of the Company (the "Old Shares") that were outstanding at
      June
      30, 2007 automatically converted into 23,805,126 shares of common stock
      (the "New Shares"). All common share and per share amounts in these financial
      statements have been retroactively restated to reflect this reverse stock split.
      The New Shares issued pursuant to the reverse stock split are fully paid and
      non-assessable. All New Shares have the same par value, voting rights and other
      rights as Old Shares. Stockholders of the Company do not have preemptive rights
      to acquire additional shares of common stock which may be issued. Also on August
      1, 2007, the Company changed its name from Tech Laboratories, Inc. to Renewal
      Fuels, Inc. and the Company’s quotation symbol on the OTC Bulletin Board was
      changed from TLBT to RNWF.





**Proposed
      Acquisition**




29




On
      July
      10, 2007, the Company announced that it has signed a letter of intent to acquire
      North Shore Energy Technologies ("North Shore"), a sustainable energy company
      planning to build a bio-refinery capable of economically converting wood waste
      into highly-versatile methanol.






North
      Shore has completed initial planning for a facility which is designed to produce
      approximately 43 million gallons per year of bio-Methanol from wood waste,
      to be
      supplied by one of the largest timber operators in the U.S. The wood waste
      feedstock has been committed from timbering operations in the local market,
      with
      more than adequate supply for the North Shore facility. The facility will be
      located on the site of existing forestry operations of the feedstock supply
      partner. The facility is projected to be fully operational in 2009, subject
      to
      receipt of adequate funding, as well as completion of customary engineering,
      permitting and other requirements.




As
      described in Note 7, on October 5, 2007, 1,343,750 of the Company’s common
      shares were issued by the transfer agent upon completion of a request received
      on September 21, 2007 to convert $215,000 of the Company’s convertible
      debentures.





As
      further discussed in Note 7, on November 13, 2007, the Company received a
      written waiver affirming that any damages, payments or penalties associated
      with
      default notes and related arrangements, including registration rights agreements
      were waived through November 13, 2007. However, no demand for any amounts had
      been made by the investors. The Company can not give any assurances that the
      investors will not demand registration related payments or payment of principal
      and interest on debentures following the effective date of the
      waiver.




**NOTE
      13 RESTATEMENTS**





The
      accompanying unaudited consolidated financial statements have been restated
      for
      the matters discussed below. All associated footnote disclosures have been
      revised for the matters giving rise to the financial statement restatements.
      In
      addition, certain of our footnotes have been augmented to provide expanded
      information about certain transactions and accounting therefore.





*Intangible
      assets and related amortization expense:*





As
      discussed in Note 2 Acquisitions, on March 9, 2007 we acquired the net assets
      of
      Fuelmiester and accounted for the acquisition as a business combination under
      FASB 141. As part of this transaction, we recorded the fair value assigned
      to
      the Trade Name acquired and concluded that the Trade Name had an indefinite
      life
      and accordingly recorded no amortization related to this intangible. We have
      subsequently determined that the an estimated life of 10 years is more
      reasonable and, accordingly the unaudited financial statements and notes to
      the
      financial statements included in Part 1, Item 1 *Financial
      Statements* of the
      Original Report are hereby restated to reflect a life of 10 years and to record
      the related amortization expense of the Trade Name.





*Deferred
      finance costs, related amortization and paid-in capital:*





As
      discussed in Note 2 Acquisitions ,
      on
      April 20, 2007, we entered into a Merger Agreement in 2007. Under the terms
      of
      the agreement, we acquired 100% of the common stock of Renewal Biodiesel in
      exchange for the issuance by us of 343,610
      shares of our series A convertible preferred stock, which was subsequently
      converted into 22,907,323 common
      shares. The net liabilities assumed primarily represented debt obligations
      and
      were assumed in connection with the provision of additional long-term debt
      financing provided by Cornell, which additional funding was provided
      simultaneously with the reverse merger and recapitalization. In our original
      filing, the net liabilities assumed were recorded as deferred financing costs
      incurred in connection with the additional debt funding rather than paid-in
      capital (arising from the reverse merger reorganization) and were then amortized
      by periodic charges to income on a straight-line basis over the life of that
      debt funding. We have subsequently determined that the acquired debt should
      have
      been recorded as a reduction to stockholders equity and, accordingly
      t he
      unaudited financial statements and notes have been restated to reclassify the
      acquired debt as a reduction to stockholders equity and to reverse the
      amortization charges taken against income.





*Reconciliation
      of accounts as previously reported and as restated:*




30





The
      following table illustrates the effects on the account classifications resulting
      from the above restatements:


**As**
              **Reported**
            
            **Restatement**
              **Adjustments**
            
            
            
            **As**
              **Restated****Balance
                Sheet as of June 30, 2007**Finance
                fees net
            
            $
            1,678,896
            
            $
            (1,516,403
            )
            
            (A
            )
            $
            162,493Intangible
                assets, net
            
            
            177,833
            
            
            115,050
            
            
            (B
            )
            
            292,883Paid-in
                capital
            
            
            6,410,378
            
            
            (1,677,020
            )
            
            (A
            )
            
            4,733,359Accumulated
                Deficit
            
            
            (6,159,204
            )
            
            157,666
            
            
            (C
            )
            
            (6,001,538
            )**Statement
                of Operations, Three Months Ended June 30, 2007**Other
                general and administrative
            
            
            97,716
            
            
            2,950
            
            
            (B
            )
            
            100,666Deferred
                Financing fees
            
            
            181,249
            
            
            (160,617
            )
            
            (A
            )
            
            20,632Net
                income (loss) per shareBasic
            
            
            (0.26
            )
            
            0.01
            
            
            (C
            )
            
            (0.25
            )Diluted
            
            
            (0.26
            )
            
            0.01
            
            
            (C
            )
            
            (0.25
            )**Statement
                of Operations, March 9, 2007 (Date of Inception) to June 30,
                2007**Other
                general & administrative
            
            
            97,544
            
            
            2,950
            
            
            (B
            )
            
            100,494Deferred
                Financing fees
            
            
            181,249
            
            
            (160,617
            )
            
            (A
            )
            
            20,632Net
                income (loss) per shareBasic
            
            
            (0.26
            )
            
            0.01
            
            
            (C
            )
            
            (0.25
            )Diluted
            
            
            (0.26
            )
            
            0.01
            
            
            (C
            )
            
            (0.25
            )




Notes
      to
      adjustments:





(A)
      Net
      liabilities assumed in the acquisition of FuelMeister were originally recorded
      as deferred financing fees and were amortized over the life of the financing
      arrangement obtained for the purpose of funding the acquisition. We have
      reclassified these net liabilities and reduced stockholders equity with a charge
      to additional paid in capital. We have reversed the amortization charges taken
      against income.




(B)
      Trade
      name acquired in the acquisition of FuelMeister was originally assigned an
      indefinite life. We have now assigned a life of 10 years to the intangible
      asset
      and we are amortizing this asset on a straight line basis over 10
      years.





(C)
      Net
      income and Retained Earnings has been adjusted to reflect the impact of the
      reversal of financing fees and charge for amortization expense.




31


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




The
      following discussion and other sections of this Form 10-QSB contain
      forward-looking statements that involve a number of risks and uncertainties.
      These forward-looking statements are made pursuant to the “safe-harbor”
provisions of the Private Securities Litigation Reform Act of 1995 and are
      made
      based on management’s current expectations or beliefs, as well as assumptions
      made by, and information currently available to, management. All statements
      regarding future events, our future financial performance and operating results,
      our business strategy and our financing plans are forward-looking statements.
      In
      many cases, you can identify forward-looking statements by terminology, such
      as
“may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative
      of such terms and other comparable terminology. These statements are only
      predictions. Known and unknown risks, uncertainties and other factors could
      cause our actual results to differ materially from those projected in the
      forward-looking statements.





THE
      INFORMATION CONTAINED IN THIS FORM 10-QSB IS NOT A COMPLETE DESCRIPTION OF
      OUR
      BUSINESS OR THE RISKS ASSOCIATED WITH AN INVESTMENT IN US. READERS ARE REFERRED
      TO DOCUMENTS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION,
      WHICH IDENTIFY IMPORTANT RISK FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
      FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS.




**Overview**





As
      of the
      end of the quarter, June 30, 2007, Renewal Fuels, Inc. (“Renewal”) had one
      business segment, Renewal Biodiesel.





Renewal
      Biodiesel was incorporated in the state of Delaware on March 9, 2007 and
      acquired the business, fixed assets and inventory of FuelMeister from Biodiesel
      Solutions, Inc. (“BSI”) effective March 30, 2007. Renewal Biodiesel is engaged
      in the business of designing, developing, manufacturing and marketing personal
      biodiesel processing equipment and accessories to convert used and fresh
      vegetable oil into clean-burning biodiesel. Renewal Biodiesel’s products allow
      customers to make biodiesel fuel, which is capable of powering all diesel fuel
      engines, for a current cost of approximately 70 cents per gallon. Renewal
      Biodiesel has developed a network of dealers in the United States for sale
      and
      distribution of its products. Renewal Biodiesel’s manufacturing facilities are
      currently located in Sparks, Nevada.





**HISTORY**





**Reorganization
      of Tech Laboratories, Inc. to Renewal Fuels, Inc.**





On
      April
      20, 2007, Renewal Fuels, Inc., formerly Tech Laboratories, Inc., and its
      wholly-owned subsidiary Renewal Fuels Acquisitions, Inc. (“Renewal
      Acquisitions”), entered into a merger agreement (the “Renewal Merger Agreement”)
      with Renewal Biodiesel, Inc. (formerly Renewal Fuels, Inc.) (“Renewal
      Biodiesel”). Pursuant to the Renewal Merger Agreement, Renewal Acquisitions was
      merged with and into Renewal Biodiesel. The former shareholders of Renewal
      Biodiesel were issued an aggregate of 343,610 shares of the Company’s series A
      convertible preferred stock (the “Preferred Stock”), which were immediately
      convertible at the option of the holders into an aggregate of 268,588 shares
      of
      our common stock (4,028,827 shares prior to the 1-for-15 reverse stock split
      described below). Following approval of the Renewal Merger Agreement by our
      shareholders, the Preferred Stock became convertible at the option of the
      holders into an aggregate of 22,907,323 shares of our common stock (343,610.000
      shares prior to the reverse stock split). On June 21, 2007, all of the holders
      converted their shares of Preferred Stock into 22,907,323 shares of the
      Company’s common stock.




32




On
      July
      9, 2007, the Company, which was a New Jersey entity (“Tech Labs-NJ”), entered
      into an Agreement and Plan of Merger with Tech Laboratories, Inc., a
      Delaware entity (“Tech Labs - DE”) under which Tech Labs - NJ and Tech Labs - DE
      were merged with and into the surviving corporation, Tech Labs - DE, whose
      name
      was subsequently changed on August 1, 2007 to Renewal Fuels, Inc. The
      certificate of incorporation and bylaws of the surviving corporation became
      the
      certificate of incorporation and bylaws of the Company, and the directors and
      officers in office of the surviving corporation became the directors and
      officers of the Company.





On
      July
      10, 2007, the majority stockholders of the Company authorized a 1-for-15 reverse
      stock split pursuant to which, on August 1, 2007,  the 357,076,887 shares
      of Common Stock of the Company (the "Old Shares") that were outstanding as
      of
      June 30, 2007 automatically converted into 23,805,126 shares of common
      stock (the "New Shares"). All common share and per share amounts in these
      financial statements have been retroactively restated to reflect this reverse
      stock split. The reason for the reverse stock split is to increase the per
      share
      stock price. The Company believes that if it is successful in maintaining a
      higher stock price, the stock will generate greater interest among professional
      investors and institutions. If the Company is successful in generating interest
      among such entities, it is anticipated that the shares of its common stock
      would
      have greater liquidity and a stronger investor base. No assurance can be given,
      however, that the market price of the New Shares will rise in proportion to
      the
      reduction in the number of outstanding shares resulting from the reverse stock
      split. The New Shares issued pursuant to the reverse stock split are fully
      paid
      and non-assessable. All New Shares have the same par value, voting rights and
      other rights as Old Shares. Stockholders of the Company do not have preemptive
      rights to acquire additional shares of common stock which may be issued. Also
      on
      August 1, 2007, the Company changed its name from Tech Laboratories, Inc. to
      Renewal Fuels, Inc. and the Company’s quotation symbol on the OTC Bulletin Board
      was changed from TLBT to RNWF.





Tech
      Laboratories, Inc. had no active business operations immediately prior to the
      merger. John King, our Chief Executive Officer and a principal stockholder,
      and
      David Marks, our Chairman and a principal stockholder, were the officers and
      directors of Renewal Biodiesel.





Immediately
      prior to the reorganization, Renewal Biodiesel issued an aggregate of 5,727,979
      shares of its common stock to 23 accredited investors for an aggregate
      consideration of $57,279. Under the terms of the agreement, we acquired 100%
      of
      the 5,727,979 shares of common stock of Renewal Biodiesel in exchange for the
      issuance by us of 343,610 shares of series A preferred stock, which were
      subsequently converted into 23,907,323 common shares (approximately 97% of
      the
      outstanding common shares immediately after the reorganization). The average
      share price paid for the 5,727,979 shares of Renewal Biodiesel exchanged for
      our
      common shares was $0.01. Current officers, directors and principal stockholders
      of ours, who beneficially own in the aggregate approximately 80% of our
      outstanding common stock, owned the following aggregate shares of common stock
      of Renewal Biodiesel:





Name
            
            Common
                Shares
              Received
            
            Renewal
                Biodiesel Shares Owned
            
            Average
                Price PaidCrivello
                Group LLC (1)
            
            
            666,666
            
            
            166,700
            
            $
            0.01Frank
                P. Crivello SEP IRA (1)
            
            
            13,333,333
            
            
            3,334,000
            
            $
            0.01John
                King
            
            
            2,300,000
            
            
            575,115
            
            $
            0.01David
                Marks (2)
            
            
            2,700,000
            
            
            675,135
            
            $
            0.01Other
                investors as a group (17)
            
            
            3,907,324
            
            
            977,029
            
            $
            0.0122,907,323
            
            
            5,727,979




33




(1)Mr.
                Crivello is also the managing member of Crivello Group,
                LLC.(2)Of
                the shares attributed to Mr. Marks, 200,000 shares are registered
                in the
                name of the Irrevocable Children’s Trust of which Mr. Marks is a trustee
                and 200,000 are registered in the name of Phoenix Investors, LLC
                of which
                Mr. Marks is Managing Director.





Although
      we were the legal acquirer, Renewal Biodiesel was considered the accounting
      acquirer and as such the acquisition was accounted for as a reverse merger
      and
      recapitalization. The officers and directors of Renewal Biodiesel assumed
      similar positions with us. As a result, the accompanying consolidated financial
      statements represent the results of operations and cash flows of the accounting
      acquirer (Renewal Biodiesel) from the date of its inception on March 9, 2007.





The
      fair
      value of the common stock issued to the shareholders of Renewal Biodiesel was
      estimated to be $0.2265 per share, based on the trading price of our common
      stock immediately prior to the reorganization and reverse merger. The difference
      between the fair value of the shares issued and the amount paid by the
      shareholders of Renewal Biodiesel for their shares resulted in an immediate
      expense of $5,131,231.





**Acquisition
      of Operating Assets from Predecessor Business -
      FuelMeister**





On
      April
      20, 2007, Renewal Fuels, Inc., formerly Tech Laboratories, Inc. (the “Company”
or “we”, “us”, “our”), and its wholly-owned subsidiary Renewal Fuels
      Acquisitions, Inc. (“Renewal Acquisitions”), entered into a merger agreement
      (the “Renewal Merger Agreement”) with Renewal Biodiesel, Inc. (formerly Renewal
      Fuels, Inc.) (“Renewal Biodiesel”). Renewal Biodiesel was incorporated in the
      state of Delaware on March 9, 2007 for the purpose of the acquisition of the
      FuelMeister Business described below. Pursuant to the Renewal Merger Agreement,
      Renewal Acquisitions was merged with and into Renewal Biodiesel. The former
      shareholders of Renewal Biodiesel were issued an aggregate of 343,610 shares
      of
      the Company’s series A convertible preferred stock (the “Preferred Stock”),
      which were immediately convertible at the option of the holders into an
      aggregate of 268,588 shares of our common stock (4,028,827 shares prior to
      the
      1-for-15 reverse stock split described below). Following approval of the Renewal
      Merger Agreement by our shareholders, the Preferred Stock became convertible
      at
      the option of the holders into an aggregate of 22,907,323 shares of our common
      stock (343,610,000 shares prior to the reverse stock split). On June 21, 2007,
      all of the holders converted their shares of Preferred Stock into 22,907,323
      shares of the Company’s common stock.





On
      March
      9, 2007, Crivello Group, LLC (“Crivello”) and its wholly-owned subsidiary,
      Renewal Biodiesel, entered into an Asset Purchase Agreement with Biodiesel Solutions,
      Inc. (“BSI”), which closed on March 30, 2007. Pursuant to the Asset Purchase
      Agreement, BSI sold substantially all of the assets and property of its
      FuelMeister operations (the “FuelMeister Business”, the “Predecessor” or the
“Predecessor Business”, an unrelated Company) to Renewal Biodiesel, in exchange
      for an aggregate purchase price of $500,000, subject to adjustment. Under the
      terms of the Agreement, the purchase price was subsequently adjusted to $494,426
      to reflect the inventory on hand at closing. Of the adjusted purchase price,
      $100,000 was paid on execution of the Agreement as a down payment, $100,000
      was
      paid at closing, $50,000 was paid on April 11, 2007, and the balance of the
      purchase price was paid by delivery of a promissory note, as amended, in the
      amount of $244,426. The promissory note was subsequently paid on April 20,
      2007.
      The $494,426 purchase price of the assets was funded with loans received from
      Cornell Capital Partners L.P. and cash received from our founders for common
      stock.




34





**Financing
      With Cornell Capital Partners, L.P.**





On
      April
      20, 2007, the Company entered into a Securities Purchase Agreement (the
      "Purchase Agreement") with Cornell Capital Partners L.P. ("Cornell") providing
      for the sale by the Company to Cornell of its secured convertible debentures
      in
      the aggregate principal amount of $1,400,000 (the "New Debentures") of which
      $1,000,000 was advanced immediately. The second instalment of $400,000 was
      funded on May 31, 2007, following clearance by the Securities and Exchange
      Commission (the “SEC”) of an information statement disclosing shareholder
      approval of the issuance of the Preferred Stock to the former shareholders
      of
      Renewal Biodiesel.





The
      New
      Debentures bear interest at the prime rate plus 2.75% (but not less than 10%)
      and mature on April 20, 2009 and May 31, 2009 (the "Maturity Dates"). The
      Company is not required to make any payments until the Maturity Dates. The
      holder of the New Debentures (the "Holder") may convert at any time principal
      amounts outstanding under the New Debentures into shares of common stock of
      the
      Company at a conversion price per share equal to the lower of (a) $0.60 or
      (b)
      80% of the lowest closing bid price of the common stock during the ten trading
      days immediately preceding the conversion date. The Company has the right to
      redeem a portion or all amounts outstanding under the New Debentures prior
      to
      the Maturity Dates at a 15% redemption premium provided that (i) the closing
      bid
      price of the common stock is less than the fixed conversion price of the New
      Debentures; (ii) the underlying shares are subject to an effective registration
      statement; and (iii) no event of default has occurred and is continuing. The
      New
      Debentures contain standard anti-dilution adjustments for stock splits and
      similar events. In the event that the Company sells or otherwise issues common
      stock at a price below the current conversion price, the fixed conversion price
      will be reduced to such lower price. If an Event of Default occurs, as defined
      in the New Debentures, the holder may demand immediate repayment of all amounts
      due under the New Debentures. In addition to non-payment of principal or
      interest when due, defaults under other obligations and bankruptcy or similar
      events, the Events of Default include a Change in Control of the Company, the
      Company’s failure to file, achieve or maintain effectiveness of the required
      registration statement (see below) if registration has been demanded by the
      Holder of the New Debentures, and the failure to maintain the listing of the
      Company’s common stock on a recognized exchange.





The
      obligations to Cornell, together with prior obligations to Cornell described
      below, are secured by a security interest in the Company’s assets, including its
      intellectual property. In addition, the Company pledged the shares of Renewal
      Biodiesel to Cornell as additional security for the obligations to
      Cornell.





Under
      the
      Purchase Agreement, the Company also issued to Cornell five-year warrants to
      purchase 1,200,000 shares of common stock at an exercise price of $0.15 per
      share.





In
      connection with the Purchase Agreement, the Company also entered into a
      registration rights agreement with Cornell (the "Registration Rights Agreement")
      providing for the filing of a registration statement (the "Registration
      Statement") with the SEC registering the common stock issuable upon conversion
      of the New Debentures and exercise of the warrants. Upon written demand from
      the
      Holder, the Company is obligated to file a Registration Statement within 45
      days
      of such demand and to use its best efforts to cause the Registration Statement
      to be declared effective no later than 150 days following receipt of such
      demand. The Company is also required to ensure that the Registration Statement
      remains in effect until all of the shares of common stock issuable upon
      conversion of the New Debentures and exercise of the warrants have been sold
      or
      may be sold without volume restrictions pursuant to Rule 144(k) promulgated
      by
      the SEC. In the event of a default of its obligations under the Registration
      Rights Agreement, including its agreement with respect to the filing and
      effectiveness dates for the Registration Statement, the Company is required
      to
      pay to Cornell, as liquidated damages, for each thirty day period that the
      Registration Statement has not been filed or declared effective, as the case
      may
      be, a cash amount equal to 2% of the face amount of the Debentures, not to
      exceed 24%. As of August 13, 2007, no demand for registration has been received
      by the Company.




35




**Settlement
      with Stursberg & Veith**





On
      June
      30, 2005, the law firm of Stursberg & Veith (“S&V”), former counsel to
      the Company, filed a lawsuit claiming that they were owed $161,179 plus
      interest, costs, and disbursements. On December 5, 2005, a judgment was rendered
      by the court to make payment of $204,834, including interest. In order to settle
      this matter without further expense or delay, on April 25, 2007, the Company
      and
      S&V entered into a settlement agreement pursuant to which the Company agreed
      to pay S&V the sum of $100,000 on or before April 30, 2007. Upon such
      payment, under the terms of the agreement, each party released the other from
      any liabilities or claims.





**Acquisition
      of BSI**





On
      July
      2, 2007, the Company and its wholly-owned subsidiary BSI Acquisitions, Inc.
      (“BSI Acquisitions”) entered into a merger agreement (the “BSI Merger
      Agreement”) with Biodiesel Solutions, Inc. (“BSI”), from whom Renewal Biodiesel
      had acquired the FuelMeister Business. Pursuant to the BSI Merger Agreement,
      BSI
      Acquisitions was merged with and into BSI and the Company thus acquired all
      of
      the remaining business of BSI, other than the FuelMeister Business which was
      previously acquired as a result of the reverse merger with Renewal Biodiesel.
      The former shareholders of BSI were issued an aggregate of 3,266,667 shares
      of
      common stock of the Company (49,000,000 shares prior to the 1-for-15 reverse
      stock split), 1,000,000 shares of BSI series B convertible preferred stock
      (the
“BSI Preferred Stock”) and $500,000 in cash. The Company also issued an
      aggregate of 66,667 shares of common stock of the Company (1,000,000 shares
      prior to the 1-for-15 reverse stock split) and an aggregate of 133,333 options
      (2,000,000 prior to the reverse stock split) to purchase shares of common stock
      of the Company to the individuals, other than officers of BSI, employed by
      BSI.
      The BSI Preferred Stock is immediately convertible at the option of the holders
      into common stock of the Company at a conversion price per share equal to the
      greater of (i) $0.75, or (ii) the average closing price of the common stock
      during the ten trading days immediately preceding the conversion date. Prior
      to
      the acquisition of BSI, the Company loaned $200,000 to BSI under an 8%, 180
      day
      secured promissory note, due November 24, 2007. Upon the acquisition of BSI,
      the
      note was forgiven and recorded as a capital contribution to BSI.





BSI
      will
      manufacture the BiodieselMaster®, a factory-built biodiesel processing plant
      that is designed to produce 350,000 gallons of biodiesel per year and which
      is
      designed to be appropriately scaled for a variety of customers, including small
      communities, farms, farm co-ops and trucking fleets. The design will provide
      a
      biodiesel production system that is continuous, flexible, efficient, affordable,
      and fully-automated. The automated control system will minimize labor costs
      and
      facilitates remote diagnostics.





**Additional
      Financing With Cornell Capital Partners, L.P.**





On
      July
      2, 2007, the Company entered into an additional Securities Purchase Agreement
      (the "Additional Purchase Agreement") with Cornell providing for the sale by
      the
      Company to Cornell of its secured convertible debentures in the aggregate
      principal amount of $2,700,000 (the "Additional Debentures") of which $2,000,000
      was advanced immediately. The second installment of $700,000 will be funded
      within two business days after the Company has unconditionally booked and
      received at least a 50% deposit for the sale of at least one BiodieselMaster
      Unit.




36





The
      interest rate, repayment terms, conversion rights, conversion price,
      anti-dilution provisions, redemption provisions, events of default and
      registration requirements of the Additional Debentures are identical to those
      of
      the New Debentures described above, except that the fixed element of the
      conversion price is $0.75, not $0.60.





The
      obligations to Cornell, together with prior obligations to Cornell, are secured
      by a security interest in the Company’s assets and the assets of its
      subsidiaries, including their intellectual property. In addition, the Company
      pledged the shares of BSI to Cornell as additional security for the obligations
      to Cornell.





Under
      the
      Additional Purchase Agreement, the Company also issued to Cornell five-year
      warrants to purchase 2,250,000 shares of common stock at an exercise price
      of
      $0.90 per share.




37


***RESULTS
      OF OPERATIONS***





Although
      the revenue generating activities of FuelMeister, the predecessor business,
      remained significantly intact after the acquisition, there have been changes
      in
      our marketing strategy, administrative costs (including those expenses related
      to public equity market participation) and financing activities. As a result,
      we
      believe that the expenses of the predecessor business are not representative
      of
      our current business, financial condition or results of operations. Accordingly,
      where practicable we have included various forward looking statements regarding
      effects of our new operating structure.





*The
      discussion that follows of Results of Operations is in the following
      sections:*





· **
            *Results
                of operations for the three months ended June 30, 2007
                (successor);*





· **
            *Results
                of operations for the period March 9, 2007 (date of inception) through
                June 30, 2007 (successor);*





· **
            *Results
                of operations for the three months ended June 30, 2006
                (predecessor);*





· **
            *Results
                of operations for the three months ended March 31, 2007
                (predecessor);*





· **
            *Results
                of operations for the six months ended June 30, 2006
                (predecessor);*




***RESULTS
      OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2007***





The
      information contained in this section is that of the successor, Renewal Fuels,
      Inc., for the three months ended June 30, 2007 (unaudited).





**Net
                Sales**
            
            $
            244,087
            
            
            100.0
            %Cost
                of sales
            
            
            142,342
            
            
            58.3
            %**Gross
                Profit**
            
            
            101,745
            
            
            41.7
            %**Operating
                Expenses:**Stock-based
                transaction expense
            
            
            5,131,231
            
            
            2102.2
            %General
                and administrative expenses
            
            
            451,260
            
            
            184.9
            %Advertising
                expenses
            
            
            43,815
            
            
            18.0
            %Occupancy
                and equipment
            
            
            8,257
            
            
            3.4
            %Total
                Operating Expenses
            
            
            5,634,563
            
            
            2308.5
            %**Operating
                Income (Loss)**
            
            
            (5,532,818
            )
            
            (2266.7
            )%Net
                financial expense
            
            
            (433,377
            )
            
            (177.6
            )%**Net
                Income (Loss)**
            
            $
            (5,966,195
            )
            
            (2444.0
            )%





**Revenues**





For
      the
      three months ended June 30, 2007, revenues were $244,087.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales for the three months ended June 30, 2007 was $142,342 or 58.3% of revenues
      for the quarter. As a result, gross profit margin was $101,745 or 41.7% for
      the
      three months ended June 30, 2007.





**Advertising
      Expenses**





Advertising
      expenses were $43,815, or 18% of revenues, for the three months ended June
      30,
      2007.




38





**General
      and Administrative Expenses**





General
      and administrative expenses for the three months ended June 30, 2007 were
      $ 451,260 ,
      consisting of professional fees of $317,898, together with administrative
      expenses, insurance, and other non-manufacturing related expenses.





**Stock
      Based Transaction Expense**





Stock
      based transaction expense for the period was $5,131,231, representing the
      difference between the fair value of our common shares issued to the
      shareholders of Renewal Biodiesel in the reverse merger and reorganization
      and
      the amount they paid for their shares of Renewal Biodiesel.





**Occupancy
      and Equipment**





Occupancy
      and equipment expense, consisting of rent, depreciation, amortization, and
      other
      miscellaneous expenses, amounted to $8,257 for the three months ended June
      30,
      2007.





**Net
      Financial (Income) Expense**





Net
      financial (income) expense of $ 433,377
      consisted primarily of interest expense of $413,500 for the three months ended June 30,
      2007.





**Provision
      for Income Taxes**





During
      the three months ended June 30, 2007, we experienced an operating loss for
      tax
      purposes. FuelMeister, our Predecessor, had historically experienced operating
      losses, and as FuelMeister’s management were uncertain as to whether FuelMeister
      would be able to utilize these tax losses before they expire, they provided
      a
      reserve for the income tax benefits associated with FuelMeister’s net future tax
      assets which primarily related to its cumulative net operating losses. We have
      adopted the same policy to reserve such net tax assets until such time
      profitability is reasonably assured and it becomes more likely than not that
      we
      will be able to utilize such assets.





**Net
      Loss**





As
      a
      result of the above, we reported a net loss of $ 5,966,195
      for the three months ended June 30, 2007.





***RESULTS
      OF OPERATIONS FOR THE PERIOD MARCH 9, 2007 (DATE OF INCEPTION) THROUGH JUNE
      30,
      2007***





The
      information contained in this section is that of the successor, Renewal Fuels,
      Inc., for the period March 9, 2007 (date of inception) through June 30, 2007
      (unaudited).





**Net
                Sales**
            
            $
            244,087
            
            
            100.0
            %Cost
                of sales
            
            
            142,342
            
            
            58.3
            %**Gross
                Profit**
            
            
            101,745
            
            
            41.7
            %**Operating
                Expenses:**Stock-based
                transaction expense
            
            
            5,131,231
            
            
            2102.2
            %General
                and administrative expenses
            
            
            484,508
            
            
            198.5
            %Advertising
                expenses
            
            
            43,983
            
            
            18.0
            %Occupancy
                and equipment
            
            
            8,257
            
            
            3.4
            %Total
                Operating Expenses
            
            
            5,667,979
            
            
            2322.1
            %**Operating
                Income (Loss)**
            
            
            (5,566,234
            )
            
            (2266.7
            )%Net
                financial expense
            
            
            (435,304
            )
            
            (178.3
            )%**Net
                Income (Loss)**
            
            $
            (6,001,538
            )
            
            (2458.8
            )%




39




**Revenues**





For
      the
      period March 9, 2007 (date of inception) through June 30, 2007, revenues were
      $244,087.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales for the period March 9, 2007 (date of inception) through June 30, 2007
      was
      $142,342, or 58.3% of revenues for the period. As a result, gross profit margin
      for the period was $101,745 or 41.7%.





**Advertising
      Expenses**





Advertising
      expenses were $43,983, or 18% of revenues for the period March 9, 2007(date
      of
      inception) through June 30, 2007.





**General
      and Administrative Expenses**





General
      and administrative expenses for the period were $484,508 ,
      consisting of administrative expenses, insurance, legal and other
      non-manufacturing related expenses. Of these expenses, professional fees,
      including legal, consulting, and accounting fees, were $349,741.





**Stock
      Based Transaction Expense**





Stock
      based transaction expense for the period was $5,131,231, representing the
      difference between the fair value of our common shares issued to the
      shareholders of Renewal Biodiesel in the reverse merger and reorganization
      and
      the amount they paid for their shares of Renewal Biodiesel.





**Occupancy
      and Equipment**





Occupancy
      and equipment expense, consisting of rent, depreciation, amortization, and
      other
      miscellaneous expenses, amounted to $8,257 for the period March 9, 2007 (date
      of
      inception) through June 30, 2007.





**Net
      Financial (Income) Expense**





Net
      financial (income) expense of 435,304 consisted primarily of interest expense
      of
      $415,427 for the period March 9, 2007 (date of inception) through June 30,
      2007.





**Provision
      for Income Taxes**





During
      the period March 9, 2007 (date of inception) through June 30, 2007, we
      experienced an operating loss for tax purposes. FuelMeister, our Predecessor,
      had historically experienced operating losses, and as FuelMeister’s management
      were uncertain as to whether FuelMeister would be able to utilize these tax
      losses before they expire, they provided a reserve for the income tax benefits
      associated with FuelMeister’s net future tax assets which primarily related to
      its cumulative net operating losses. We have adopted the same policy to reserve
      such net tax assets until such time profitability is reasonably assured and
      it
      becomes more likely than not that we will be able to utilize such
      assets.





40




**Net
      Loss**





As
      a
      result of the above, we reported a net loss of $ 6,001,538
      for the period March 9, 2007 (date of inception) through June 30, 2007.




***RESULTS
      OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2006
      (PREDECESSOR)***





The
      information contained in this section is that of our predecessor, the
      FuelMeister Business, for the three months ended June 30, 2006
      (unaudited).





**Net
                Sales**
            
            $
            503,061
            
            
            100.0
            %Cost
                of sales
            
            
            331,449
            
            
            65.9
            %**Gross
                Profit**
            
            
            171,612
            
            
            34.1
            %**Operating
                Expenses:**General
                and administrative expenses
            
            
            99,070
            
            
            19.7
            %Advertising
                expenses
            
            
            8,762
            
            
            1.7
            %Occupancy
                and equipment
            
            
            23,900
            
            
            4.8
            %Total
                Operating Expenses
            
            
            131,732
            
            
            26.2
            %**Operating
                Income (Loss)**
            
            
            39,880
            
            
            7.9
            %Net
                financial expense
            
            
            -
            
            
            0.0
            %**Net
                Income (Loss)**
            
            $
            39,880
            
            
            7.9
            %





**Revenues**





For
      the
      three months ended June 30, 2006, revenues were $503,061. **Cost
      of Sales and Gross Profit**





Cost
      of
      sales for the three months ended June 30, 2006 was $331,449, or 65.9% of
      revenues, resulting in a gross profit margin of $171,612 or 34.1%.





**Advertising
      Expenses**





Advertising
      expenses were $8,762, or 1.7% of revenues, for the three months ended June
      30,
      2006.





**General
      and Administrative Expenses**





General
      and administrative expenses, consisting of payroll, administrative expenses,
      insurance, legal and other non-manufacturing related expenses, were $99,070
      for
      the three months ended June 30, 2006. Payroll accounted for most of the expense
      with $69,430 for the three months ended June 30, 2006.




41





**Occupancy
      and Equipment**





Occupancy
      and equipment expense, consisting of rent, depreciation, amortization, and
      other
      miscellaneous expenses, amounted to $23,900 for the three months ended June
      30,
      2006.





**Provision
      for Income Taxes**





During
      the three months ended June 30, 2006, FuelMeister experienced an operating
      loss
      for tax purposes. FuelMeister had historically experienced operating losses,
      and
      as FuelMeister’s management were uncertain as to whether FuelMeister would be
      able to utilize these tax losses before they expire, they provided a reserve
      for
      the income tax benefits associated with FuelMeister’s net future tax assets
      which primarily related to its cumulative net operating losses.





**Net
      Income**





As
      a
      result of the above, FuelMeister reported net income of $39,880 for the three
      months ended June 30, 2006.





***RESULTS
      OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007
      (PREDECESSOR)***





The
      information contained in this section is that of our predecessor, the
      FuelMeister Business, for the three months ended March 31, 2007
      (unaudited).





**Net
                Sales**
            
            $
            104,360
            
            
            100.0
            %Cost
                of sales
            
            
            76,802
            
            
            73.6
            %**Gross
                Profit**
            
            
            27,558
            
            
            26.4
            %**Operating
                Expenses:**General
                and administrative expenses
            
            
            79,879
            
            
            76.5
            %Advertising
                expenses
            
            
            8,479
            
            
            8.1
            %Occupancy
                and equipment
            
            
            18,666
            
            
            17.9
            %Total
                Operating Expenses
            
            
            107,042
            
            
            102.6
            %**Operating
                Income (Loss)**
            
            
            (79,461
            )
            
            (76.1)
            %Net
                financial expense
            
            
            -
            
            
            0.0
            %**Net
                Income (Loss)**
            
            $
            (79,461
            )
            
            (76.1)
            %




42




**Revenues**





For
      the
      three months ended March 31, 2007, FuelMeister’s revenue was $104,360.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales for the three months ended March 31, 2007 was $76,802, or 73.6% of
      revenues resulting in a gross profit margin of $27,558 or 26.4%.





**Advertising
      Expenses**





Advertising
      expenses were $8,474, or 8.1% of revenues, for the three months ended March
      31,
      2007.





**General
      and Administrative Expenses**





General
      and administrative expenses, consisting of payroll, administrative expenses,
      insurance, legal and other non-manufacturing related expenses were $79,879
      for
      the three months ended March 31, 2007. Payroll accounted for most of the expense
      with $52,320 for the three months ended March 31, 2007.





**Occupancy
      and Equipment**





Occupancy
      and equipment expense, consisting of rent, depreciation, amortization, and
      other
      miscellaneous expenses, amounted to $18,666 for the three months ended March
      31,
      2007.




**Provision
      for Income Taxes**





During
      the three months ended March 31, 2007, FuelMeister experienced operating and
      tax
      losses. FuelMeister had historically experienced operating losses, and as
      FuelMeister’s management were uncertain as to whether FuelMeister would be able
      to utilize these tax losses before they expire, they provided a reserve for
      the
      income tax benefits associated with FuelMeister’s net future tax assets which
      primarily relate to its cumulative net operating losses.





**Net
      Loss**





As
      a
      result of the above, FuelMeister reported a net loss of $79,461 for the three
      months ended March 31, 2007.




***RESULTS
      OF OPERATIONS FOR THE SIX MONTHS ENDED*** ***JUNE
      30, 2006 (PREDECESSOR)***





The
      information contained in this section is that of our predecessor, FuelMeister,
      for the six months ended June 30, 2006 (unaudited).




43




**Net
                Sales**
            
            $
            1,067,427
            
            
            100.0
            %Cost
                of sales
            
            
            683,416
            
            
            64.0
            %**Gross
                Profit**
            
            
            384,011
            
            
            36.0
            %**Operating
                Expenses:**General
                and administrative expenses
            
            
            218,447
            
            
            20.5
            %Advertising
                expenses
            
            
            18,088
            
            
            1.7
            %Occupancy
                and equipment
            
            
            69,930
            
            
            6.6
            %Total
                Operating Expenses
            
            
            306,465
            
            
            28.7
            %**Operating
                Income (Loss)**
            
            
            77,546
            
            
            7.2
            %Net
                financial expense
            
            
            -
            
            
            0.0
            %**Net
                Income (Loss)**
            
            $
            77,546
            
            
            7.2
            %





**Revenues**





For
      the
      six months ended June 30, 2006, FuelMeister’s revenue was $1,067,427.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales was $683,416 for the six months ended June 30, 2006 or 64.0% of revenues,
      resulting in a gross profit margin of $384,011 or 36.0%.





**Advertising
      Expenses**





Advertising
      expenses were $18,088, or 1.7% of revenues, for the six months ended June 30,
      2006.





**General
      and Administrative Expenses**





General
      and administrative expenses, consisting of payroll, administrative expenses,
      insurance, legal and other non-manufacturing related expenses, were $218,447
      for
      the six months ended June 30, 2006. Payroll accounted for most of the expense
      with $125,544 for the six months ended June 30, 2006.





**Occupancy
      and Equipment**





Occupancy
      and equipment expense, consisting of rent, depreciation, amortization, and
      other
      miscellaneous expenses, amounted to $69,930 for the six months ended June 30,
      2006.




44




**Provision
      for Income Taxes**





During
      the six months ended June 30, 2006, FuelMeister experienced operating and tax
      losses. FuelMeister had historically experienced operating losses, and as
      FuelMeister’s management were uncertain as to whether FuelMeister would be able
      to utilize these tax losses before they expire, they provided a reserve for
      the
      income tax benefits associated with FuelMeister’s net future tax assets which
      primarily relate to its cumulative net operating losses.




**Net
      Income**





As
      a
      result of the above, FuelMeister reported net income of $77,546 for the six
      months ended June 30, 2006.


45


**Critical
      Accounting Policies and Estimates**





The
      preparation of financial statements in conformity with United States generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amount of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could differ from those estimates. Our
      management routinely makes judgments and estimates about the effects of matters
      that are inherently uncertain.





Our
      critical accounting policies are those where we have made the most difficult,
      subjective or complex judgments in making estimates, and/or where these
      estimates can significantly impact our financial results under different
      assumptions and conditions. Our critical accounting policies are:




·
            Revenue
                Recognition




·
            Allowance
                for Doubtful Accounts





·
            Derivative
                Financial Instruments·
            Warranty
                Obligations·
            Inventory
                Obsolescence





**Revenue
      recognition**





In
      accordance with Staff Accounting Bulletin 104 - Revenue Recognition in Financial
      Statements (“SAB 104”), revenue is generally recognized and earned when all of
      the following criteria are satisfied a) persuasive evidence of sales
      arrangements exist; b) delivery has occurred; c) the sales price is fixed or
      determinable, and d) collectibility is reasonably assured. It is the fourth
      criterion that requires us to make significant estimates. In those cases where
      all four criteria are not met, we defer recognition of revenue until the period
      these criteria are satisfied. In some cases where collectibility is an issue,
      we
      defer revenue recognition until the cash is actually received.





**Allowance
      for doubtful accounts**





The
      allowance for doubtful accounts is evaluated on a regular basis and adjusted
      based upon management's best estimate of probable losses inherent in
      receivables, based on historical experience, including the historical loss
      experience of the Predecessor. Receivables are determined to be past due if
      they
      have not been paid by the payment due dates. Debts are written off against
      the
      allowance when deemed to be uncollectible. Subsequent recoveries, if any, are
      credited to the allowance when received.





**Derivative
      financial instruments**





In
      connection with the sale of debt or equity instruments, we may sell options
      or
      warrants to purchase our common stock. In certain circumstances, these options
      or warrants may be classified as derivative liabilities, rather than as equity.
      Additionally, the debt or equity instruments may contain embedded derivative
      instruments, such as conversion options, which in certain circumstances may
      be
      required to be bifurcated from the associated host instrument and accounted
      for
      separately as a derivative instrument liability.





The
      identification of, and accounting for, derivative instruments is complex. Any
      derivative instrument liabilities are re-valued at the end of each reporting
      period, with changes in the fair value of the derivative liability recorded
      as
      charges or credits to income, in the period in which the changes occur. For
      options, warrants and bifurcated conversion options that are accounted for
      as
      derivative instrument liabilities, we determine the fair value of these
      instruments using the Cox-Ross-Rubinstein binomial option pricing model. That
      model requires assumptions related to the remaining term of the instruments
      and
      risk-free rates of return, our current common stock price and expected dividend
      yield, and the expected volatility of our common stock price over the life
      of
      the instruments. Because of the limited trading history for our common stock,
      we
      have estimated the future volatility of our common stock price based on not
      only
      the history of our stock price but also the experience of other entities
      considered comparable to us. The identification of, and accounting for,
      derivative instruments and the assumptions used to value them can significantly
      affect our financial statements.




46





**Product
      warranties**





At
      the
      time a sale is recognized, the company records the estimated future warranty
      costs. These costs are estimated based on historical warranty claims. For the
      current period we used the historical warranty experience of the predecessor
      company. Warranty provisions are included as a component of cost of
      sales.





**Inventory
      obsolescence**





We
      evaluate our inventory for excess and obsolescence on a quarterly basis. In
      preparing our evaluation, we look at the expected demand for our products for
      the next six to twelve months in order to determine whether or not such raw
      materials, WIP and finished goods require a change in the inventory reserve
      in
      order to record the inventory at net realizable value. After discussions with
      the senior management team, a reserve is established so that inventory is
      appropriately stated at the lower of cost or net realizable value.





**Recent
      Accounting Pronouncements**





***Impact
      of Recently Issued Accounting Pronouncements*** **** -
      The
      Financial Accounting Standards Board has recently issued several Financial
      Accounting Standards, as summarized below. None of these statements have had,
      or
      are expected to have, a significant effect on our financial statements or those
      of our Predecessor.





Issued
            
            StatementFebruary
                2006
            
            FAS
                155 - “Accounting for Certain Hybrid Financial Instruments; an amendment
                of Financial Accounting Standard Nos. 133 and 140" (“FAS
                155”)March
                2006
            
            FAS
                156 - “Accounting for Servicing of Financial Assets, an amendment of FASB
                Statement No. 140, Accounting for Transfers and Servicing of Financial
                Assets and Extinguishments of Liabilities”June
                2006
            
            FAS
                Interpretation 48 - "Accounting for Uncertainty in Income
                Taxes"September
                2006
            
            FAS
                157 - “Fair Value Measurements”September
                2006
            
            FAS
                158 - “Employers’ Accounting for Defined Benefit Pension and Other
                Postretirement Plans” - an amendment of FASB Statements No. 87, 88, 106,
                and 132(R)”February
                2007
            
            FAS
                159 - “The Fair Value Option for Financial Assets and Financial
                Liabilities—Including an amendment of FASB Statement No.
                115”


47


**Liquidity
      and Capital Resources**





**QUARTER
      ENDED JUNE 30, 2007 FOR RENEWAL FUELS, INC.**





In
      connection with our founding and the acquisition of FuelMeister’s business and
      certain of its assets, we received $57,279 in proceeds from the sale of our
      common stock and secured $1,400,000 in convertible debt financing during the
      three months ended June 30, 2007. At June 30, 2007, we had cash on hand of
      $116,030.





During
      the period from inception on March 9, 2007 through June 30, 2007, we had a
      net
      loss of $6,001,538 which included non-cash items totaling $5,520,033 consisting
      primarily of stock-based transaction expense and amortization of debt discount
      and financing fees.





Substantially
      all of our debt has variable interest rates and, accordingly, a change in
      interest rates will affect our results of operations. However, interest is
      generally payable on maturity, rather than currently, and thus our cash flows
      from operations would not be immediately impacted in the short-term by an
      adverse change in interest rates. As described below, on July 2, 2007, we
      obtained additional convertible debt financing from Cornell, which was used
      to
      fund the acquisition of BSI, also described below, and for working capital
      .





Net
      cash
      used in investing activities was $696,126, of which $494,426 was used in the
      acquisition of assets from FuelMeister, our Predecessor, and $200,000 was
      provided as a loan to BSI, which we acquired on July 2, 2007, as described
      below.





Net
      cash
      provided by financing activities was $1,277,279 consisting of $1,400,000 of
      proceeds from the sale of convertible debt and warrants to Cornell, less
      $180,000 of fees incurred and $57,279 in proceeds from the sale of our common
      stock to our founders. At June 30, 2007, our primary debt has terms of
      approximately 21 months with interest rates ranging from 11% to 15%. All of
      our
      debt is convertible by the holder into shares of our common stock.





**Subsequent
      Acquisition and Financing Activities**





**Acquisition
      of BSI**





On
      July
      2, 2007, the Company and its wholly-owned subsidiary BSI Acquisitions, Inc.
      (“BSI Acquisitions”) entered into a merger agreement (the “BSI Merger
      Agreement”) with Biodiesel Solutions, Inc. (“BSI”), from whom Renewal Biodiesel
      had acquired the FuelMeister Business. Pursuant to the BSI Merger Agreement,
      BSI
      Acquisitions was merged with and into BSI and the Company thus acquired all
      of
      the remaining business of BSI, other than the FuelMeister Business which was
      previously acquired as a result of the reverse merger with Renewal Biodiesel.
      The former shareholders of BSI were issued an aggregate of 3,266,667 shares
      of
      common stock of the Company (49,000,000 shares prior to the 1-for-15 reverse
      stock split), 1,000,000 shares of BSI series B convertible preferred stock
      (the
“BSI Preferred Stock”) and $500,000 in cash. . The Company also issued an
      aggregate of 66,667 shares of common stock of the Company (1,000,000 shares
      prior to the 1-for-15 reverse stock split) and an aggregate of 133,333 options
      (2,000,000 prior to the reverse stock split) to purchase shares of common stock
      of the Company to the individuals, other than officers of BSI, employed by
      BSI.
      The BSI Preferred Stock is immediately convertible at the option of the holders
      into common stock of the Company at a conversion price per share equal to the
      greater of (i) $0.75, or (ii) the average closing price of the common stock
      during the ten trading days immediately preceding the conversion date. Prior
      to
      the acquisition of BSI, the Company loaned $200,000 to BSI under an 8% 180
      day
      secured promissory note, due November 24, 2007. Upon the acquisition of BSI,
      the
      note was forgiven and recorded as a capital contribution to BSI.




48





BSI
      will
      manufacture the BiodieselMaster®, a factory-built biodiesel processing plant
      that is designed to produce 350,000 gallons of biodiesel per year and which
      is
      designed to be appropriately scaled for a variety of customers, including small
      communities, farms, farm co-ops and trucking fleets. The design will provide
      a
      biodiesel production system that is continuous, flexible, efficient, affordable,
      and fully-automated. The automated control system will minimize labor costs
      and
      facilitates remote diagnostics.





**Additional
      Financing With Cornell Capital Partners, L.P.**





On
      July
      2, 2007, the Company entered into a Securities Purchase Agreement (the
      "Additional Purchase Agreement") with Cornell providing for the sale by the
      Company to Cornell of its secured convertible debentures in the aggregate
      principal amount of $2,700,000 (the "Additional Debentures") of which $2,000,000
      was advanced immediately. The second installment of $700,000 will be funded
      within two business days after the Company has unconditionally booked and
      received at least a 50% deposit for the sale of at least one BiodieselMaster
      Unit.





The
      Additional Debentures bear interest at the prime rate plus 2.75% (but not less
      than 10%) and mature two years from the date of issuance (the "Maturity Date").
      The Company is not required to make any payments until the Maturity Date. The
      holder of the Additional Debentures may convert at any time amounts outstanding
      into shares of common stock at a conversion price per share equal to the lesser
      of (i) $0.75, or (ii) 80% of the lowest closing bid price of the common stock
      during the ten trading days immediately preceding the conversion date.





The
      Company has the right to redeem a portion or all amounts outstanding under
      the
      Additional Debentures prior to the Maturity Date at a 15% redemption premium
      provided that (i) the average volume weighted average price of the Company’s
      common stock is less than the conversion price of the Additional Debentures;
      (ii) the underlying shares are subject to an effective registration statement;
      and (iii) no event of default has occurred and is continuing.





The
      obligations to Cornell, together with prior obligations to Cornell, are secured
      by a security interest in the Company’s assets and the assets of its
      subsidiaries, including their intellectual property. In addition, the Company
      pledged the shares of BSI to Cornell as additional security for the obligations
      to Cornell.





Under
      the
      Additional Purchase Agreement, the Company also issued to Cornell five-year
      warrants to purchase 2,250,000 shares of common stock at an exercise price
      of
      $0.90 per share.





In
      connection with the Additional Purchase Agreement, the Company also amended
      its
      registration rights agreement with Cornell (the "Registration Rights Agreement")
      providing for the filing of a registration statement (the "Registration
      Statement") with the SEC registering the common stock issuable upon conversion
      of the Additional Debentures and exercise of the warrants. Upon written demand
      from the Holder, the Company is obligated to file a Registration Statement
      within 45 days of such demand. The Company is obligated to use its best efforts
      to cause the Registration Statement to be declared effective no later than
      150
      days following receipt of a written demand for the filing of a Registration
      Statement and to ensure that the Registration Statement remains in effect until
      all of the shares of common stock issuable upon conversion of the New Debentures
      and Additional Debentures and exercise of the warrants have been sold or may
      be
      sold without volume restrictions pursuant to Rule 144(k) promulgated by the
      SEC.
      In the event of a default of its obligations under the Registration Rights
      Agreement, including its agreement with respect to the filing and effectiveness
      dates for the Registration Statement, the Company is required to pay to Cornell,
      as liquidated damages, for each thirty day period that the registration
      statement has not been filed or declared effective, as the case may be, a cash
      amount equal to 2% of the face amount of the New Debentures and Additional
      Debentures, not to exceed 24%.




49





**Off-Balance
      Sheet Arrangements**





We
      currently have no off balance sheet arrangements.







**Qualitative
      and Quantitative Disclosures about Market Risk**





We
      are
      exposed to certain market risks which exist as part of our ongoing business
      operations. We currently do not engage in derivative and hedging transactions
      to
      mitigate the affects of the risks below. Because the operating structure of
      our
      business is different from that of our predecessor, FuelMeister, we have
      described only those risks as they apply to our current operating environment.





**Interest
      Rates**





Changes
      in U.S. interest rates would affect the interest paid on our borrowings and/or
      earned on our cash and cash equivalents. Based on our overall interest rate
      exposure at June 30, 2007, a near-term change in interest rates, based on
      historical small movements, would not materially affect our operations or the
      fair value of interest rate sensitive instruments. Our debt instruments have
      variable interest rates and terms and, therefore, a significant change in
      interest rates could have a material adverse effect on our financial position
      or
      results of operations if we are unable to change the prices we charge to
      customers for our products.





We
      considered the historical volatility of short term interest rates and determined
      that it was reasonably possible that an adverse change of 100 basis points
      could
      be experienced in the near term. Based on our borrowings at June 30, 2007,
      a
      hypothetical 1.00% (100 basis-points) increase in interest rates would result
      in
      additional expenses of approximately $6,000 for the quarter or an annual
      increase in expenses of approximately $24,000.





**Foreign
      Currency Fluctuations**





Currently
      we do not have significant transactions transacted in currencies other than
      the
      U.S. dollar.





We
      currently do not engage in hedging. However, we may do so in the future.








**ITEM
      3. Controls And Procedures.**





**Disclosure
      Controls and Procedures**




We
      carried out an evaluation of the effectiveness of the design and operation
      of
      our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities
      Exchange Act of 1934 (the “Exchange Act”) under the supervision and with the
      participation of our chief executive officer, chief financial officer and other
      members of our management team. Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission’s rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in our reports filed under the Exchange Act is
      accumulated and communicated to management, including our Chief Executive
      Officer and Chief Financial Officer, to allow timely decisions regarding
      required disclosure. Accordingly,  our
      disclosure controls and procedures are designed to provide reasonable assurance
      of achieving their objectives. However, any
      system of controls can provide only reasonable, and not absolute, assurance
      that
      the objectives of the control system are met. In addition, the design of any
      control system is based in part upon certain assumptions about the likelihood
      of
      future events.




50




Based
      upon the initial evaluation of the effectiveness of the design and operation
      of
      our disclosure controls and procedures as relating to our Quarterly Report
      on
      Form 10-QSB for the Quarterly Period ended June 30, 2007, the Chief Executive
      Officer and Chief Financial Officer concluded that our disclosure controls
      and
      procedures were effective in timely alerting them to material information
      required to be included in our Exchange Act filings. Notwithstanding the
      aforementioned process, certain errors subsequently came to our attention that,
      ultimately, required the filing of restated quarterly financial statements
      for
      this period and augmentation of certain disclosures, each of which is more
      fully
      described in the accompanying financial statements. As a result, we have
      reconsidered our process for evaluation and our conclusions.





We
      continue to believe that our disclosure controls and procedures are reasonably
      effective to achieve the objectives set forth in the first paragraph above.
      Our
      basis for this conclusion is largely based on the fact that those matters giving
      rise to the restatements were, in fact, included in our overall review and
      evaluation. However, the outcome of the original accounting for these matters
      and transactions followed interpretations of accounting guidance that ultimately
      was incorrect. We intend to further evaluate our disclosure controls and
      procedures process in order to develop measures that will afford a higher level
      of assurance in meeting the objective of this process. However, those measures
      have not yet been identified or implemented at this time.





**Management’s
      Report on Internal Control Over Financial Reporting**




We
      will
      be required by the Sarbanes-Oxley Act to include an assessment of our internal
      control over financial reporting firm in our Annual Report on Form 10-KSB
      beginning with our filing for our fiscal year ending December 31, 2007 and
      attestation from an independent registered public accounting firm in our Annual
      Report on Form 10-KSB beginning with our filing for our fiscal year ending
      December 31, 2008.




**Changes
      in Internal Control Over Financial Reporting**




There
      have been no changes in our internal controls over financial reporting during
      the quarter ended June 30, 2007, which have materially affected, or are
      reasonably likely to materially affect, our internal control over financial
      reporting.


51





**PART
      II - OTHER INFORMATION**





**ITEM
      1.** **Legal
      Proceedings** **.**





On
      June
      30, 2004, the law firm of Stursberg & Veith (“S&V”), former counsel to
      the Company, filed a lawsuit claiming that they were owed $161,179 plus
      interest, costs, and disbursements. On December 5, 2005, a judgment was rendered
      by the court to make payment of $204,834, including interest. In order to settle
      this matter without further expense or delay, on April 25, 2007, the Company
      and
      S&V entered into a settlement agreement pursuant to which the Company agreed
      to pay S&V the sum of $100,000 on or before April 30, 2007. Upon payment,
      under the terms of the agreement, each party released the other from any
      liabilities or claims.




**ITEM
      2.** **Unregistered
      Sales Of Equity Securities And Use Of Proceeds** **.**





None.





**ITEM
      3.** **Defaults
      Upon Senior Securities** **.**





None.





**ITEM
      4.** **Submission
      Of Matters To A Vote Of Security Holders** **.**





In
      connection with the merger of Renewal Fuels Acquisitions, Inc., (a wholly-owned
      subsidiary of the Company), with and into Renewal Fuels, Inc. the former
      shareholders of Renewal Fuels, Inc. were issued an aggregate of 343,610 shares
      of Series A Convertible Preferred Stock of the Company on April 20, 2007. The
      shares of Series A Convertible Preferred Stock were immediately convertible
      at
      the option of the holders into an aggregate of 268,588 shares of the Company’s
      common stock; however, after obtaining shareholder approval, the Series A
      Convertible Preferred Stock became convertible into an aggregate of 22,907,323
      shares of the Company’s common stock.





On
      April
      12, 2007, shareholders representing 51.66% of the Company’s outstanding common
      stock approved the full conversion of the Series A Convertible Preferred Stock,
      and on June 21, 2007 all of the holders of the Series A Convertible Preferred
      Stock converted their shares of preferred stock and were issued 22,907,323
      shares of the Company’s common stock.





On
      April
      12, 2007, shareholders representing 51.66% of the Company’s outstanding common
      stock also approved the merger of the Company with and into Tech Laboratories,
      Inc., a newly formed Delaware corporation, to result in a change of the
      Company’s domicile from New Jersey to Delaware, and on July 9, 2007 the Company
      entered into an Agreement and Plan of Merger and merged with and into Tech
      Laboratories, Inc., a Delaware corporation.




**ITEM
      5.** **Other
      Information** **.**





None.





52


**ITEM
      6.** **Exhibits** **.**





**Exhibit
                Number**
            
            **Description**3.1
            
            Amendment
                to Certificate of Incorporation of Tech Laboratories, Inc.
                (1)3.2
            
            Amended
                and Restated By-laws of Tech Laboratories, Inc. (1)10.1
            
            Agreement
                and Plan of Merger, dated April 20, 2007, among Tech Laboratories,
                Inc.,
                Renewal Fuels Acquisitions, Inc. and Renewal Fuels, Inc.
                (1)10.2
            
            Asset
                Purchase Agreement, dated March 30, 2007, among Crivello Group, LLC,
                Renewal Fuels, Inc. and Biodiesel Solutions, Inc. (1)10.3
            
            Securities
                Purchase Agreement, dated April 20, 2007, by and between Tech
                Laboratories, Inc. and Cornell Capital Partners L.P.
                (1)10.4
            
            $1,000,000
                principal amount Secured Convertible Debenture, dated April 20, 2007,
                by
                and between Tech Laboratories, Inc. and Cornell Capital Partners
                L.P.
                (1)10.5
            
            Warrant
                to purchase 18,000,000 shares of Common Stock of Tech Laboratories,
                Inc.
                dated April 20, 2007 (1)10.6
            
            Registration
                Rights Agreement, dated April 20, 2007, by and between Tech Laboratories,
                Inc. and Cornell Capital Partners L.P. (1)10.7
            
            Pledge
                and Escrow Agreement, dated April 20, 2007, by and between Tech
                Laboratories, Inc., David Gonzalez and Cornell Capital Partners L.P.
                (1)10.8
            
            Restated
                Security Agreement, dated April 20, 2007, by and between Tech
                Laboratories, Inc. and Cornell Capital Partners L.P.
                (1)10.9
            
            Services
                Agreement between Renewal Fuels, Inc. and Biodiesel Solutions, Inc.,
                dated
                as of March 30, 2007 (1)10.10
            
            Settlement
                Agreement between Tech Laboratories, Inc. and Stursburg & Veith, dated
                as of April 25, 2007 (1)10.11
            
            Amendment
                No. 1 to Secured Convertible Debenture No. TCHL-1-1, dated May 31,
                2007,
                by and between Tech Laboratories, Inc. and Cornell Capital Partners
                L.P.
                (2)10.12
            
            Amended
                and Restated $1,000,000 principal amount Secured Convertible Debenture,
                dated May 31, 2007, by and between Tech Laboratories, Inc. and Cornell
                Capital Partners L.P. (2)10.13
            
            Amendment
                No. 1 to Secured Convertible Debenture No. TCHL-1-2, dated May 31,
                2007,
                by and between Tech Laboratories, Inc. and Cornell Capital Partners
                L.P.
                (2)10.14
            
            $400,000
                principal amount Secured Convertible Debenture, dated May 31, 2007,
                by and
                between Tech Laboratories, Inc. and Cornell Capital Partners L.P.
                (2)10.15
            
            $300,000
                principal amount Secured Convertible Debenture, dated December 27,
                2005,
                by and between Tech Laboratories, Inc. and Montgomery Equity Partners,
                Ltd. (incorporated by reference to the exhibits to Registrant’s Form 8-K
                filed on January 10, 2006).




53




10.16
            
            Amendment
                No. 1 to Secured Convertible Debenture No. MEP-2, dated May 31, 2007,
                by
                and between Tech Laboratories, Inc. and Montgomery Equity Partners,
                Ltd.
                (2)10.17
            
            Amended
                and Restated $537,220 principal amount Secured Convertible Debenture,
                dated December 27, 2005, by and between Tech Laboratories, Inc. and
                Montgomery Equity Partners, Ltd. (incorporated by reference to the
                exhibits to Registrant’s Form 8-K filed on January 10,
                2006).10.18
            
            Amendment
                No. 1 to Secured Convertible Debenture No. MEP-3, dated May 31, 2007,
                by
                and between Tech Laboratories, Inc. and Montgomery Equity Partners,
                Ltd.
                (2)10.19
            
            Agreement
                and Plan of Merger, dated July 2, 2007, among Tech Laboratories,
                Inc., BSI
                Acquisitions, Inc. and Biodiesel Solutions, Inc. (3)10.20
            
            Securities
                Purchase Agreement, dated July 2, 2007, by and between Tech Laboratories,
                Inc. and Cornell Capital Partners L.P. (3)10.21
            
            $2,000,000
                principal amount Secured Convertible Debenture, dated July 2, 2007,
                by and
                between Tech Laboratories, Inc. and Cornell Capital Partners L.P.
                (3)10.22
            
            Warrant
                to purchase 33,750,000 shares of Common Stock of Tech Laboratories,
                Inc.
                dated July 2, 2007 (3)10.23
            
            Amendment
                No. 1 to Registration Rights Agreement, dated July 2, 2007, by and
                between
                Tech Laboratories, Inc. and Cornell Capital Partners L.P.
                (3)10.24
            
            Security
                Agreement, dated July 2, 2007, by and between Biodeisel Solutions,
                Inc.,
                Renewal Fuels, Inc. and Cornell Capital Partners L.P.
                (3)31.1
            
            Certification
                by Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a),
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
            
            Certification
                by Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a),
                as
                adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
                200232.1
            
            Certification
                by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            
            Certification
                by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(1)Incorporated
                by reference to Form 8-K filed on April 26, 2007
              
              (2)Incorporated
                by reference to Form 8-K filed on June 8, 2007
              
              (3)Incorporated
                by reference to Form 8-K filed on July 6,
                2007


54


**SIGNATURES**





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


**TECH
              LABORATORIES, INC.**Dated:April
              8, 2008
            By:
            /s/ John
              KingJohn
              King,Chief Executive Officer and Chief Financial
                Office
              (Principal Financial and Accounting Officer)


55