UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
      FOR THE QUARTERLY PERIOD ENDEDSEPTEMBER 30,
      2008





or





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





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).


Yes
oNo x




State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date: 38,775,518 shares of common stock, $0.001 par
value per share, as of November 14, 2008.




Indicate
by a check mark whether the registrant is (check one):




an
accelerated filer o     a
non accelerated filer o      or
a smaller reporting company x




Transitional
Small Business Disclosure Format (Check one): Yes oNo x








RENEWAL FUELS,
INC.





FORM
10-Q





QUARTERLY
PERIOD ENDED SEPTEMBER 30, 2008





TABLE
OF CONTENTS




PART
      1  FINANCIAL INFORMATION
            3Item
      1.
            Financial
      Statements (Unaudited)
            3Condensed
      Consolidated Balance Sheet
            4Condensed
      Consolidated Statements of Operations
            5Condensed
      Consolidated Statements of Cash Flows
            6Notes
      to Condensed Consolidated Financial Statements
            7Item
      2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            14Item
      3.
            Qualitative
      and Quantitative Disclosure About Market Risk
            21Item
      4.
            Controls
      and Procedures
            21PART
      II OTHER INFORMATIONItem
      1.
            Legal
      Proceedings
            22Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            22Item
      3.
            Defaults
      Upon Senior Securities
            22Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            22Item
      5.
            Other
      Information
            22Item
      6.
            Exhibits
            23SIGNATURES
            
            26CERTIFICATIONSCertification
      of CEO & CFO Pursuant to 13a-14(a) under the Exchange
    ActCertification
      of CEO & CFO Pursuant to 18 U.S.C Section 1350








2








PART 1.
 FINANCIAL INFORMATION





FORWARD-LOOKING
STATEMENTS




This Form
10-Q 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-Q), 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-Q 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.  The potential risks, uncertainties and
other factors that could cause our actual results to differ materially from
those expressed or implied herein can be found in our periodic reports filed
with the Securities and Exchange Commission.





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.







3





Renewal
      Fuels, IncConsolidated
      Balance SheetSeptember
      30, 2008
            
            
            December
      31, 2007(Unaudited)
            
            
            (Audited)ASSETSCurrent
      Assets:Cash
            
            $
            31,371
            
            
            $
            98,212Accounts
      Receivable
            
            
            11,554
            
            
            
            270,000Inventories
            
            
            354,742
            
            
            
            96,883Other
      Current Assets
            
            
            77,551
            
            
            
            80,318Total
      Current Assets
            
            
            475,218
            
            
            
            545,413Property,
      Plant and Equipment-net
            
            
            284,435
            
            
            
            349,305Finance
      Fees-net
            
            
            169,993
            
            
            
            349,993Intangibles-net
            
            
            214,230
            
            
            
            417,025Goodwill
            
            
            93,705
            
            
            
            323,684Total
      Assets
            
            $
            1,237,581
            
            
            $
            1,985,420LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)LiabilitesCurrent
      Liabilities:Accounts
      Payable
            
            $
            387,905
            
            
            $
            265,691Accounts
      Payable-Related Party
            
            
            -
            
            
            
            48,000Other
      Payables
            
            
            288,664
            
            
            
            232,223Discontinued
      Liabilities
            
            
            288,664
            
            
            
            -Current
      Maturities of Convertible Debt
            
            
            3,618,182
            
            
            
            2,691,875Note
      Payable-Related Party
            
            
            508,717
            
            
            
            150,888Convertible
      preferred stock of subsidiary (preference in liquidation -
      $1,000,000)
            
            
            800,000
            
            
            
            800,000Total
      Liabilites
            
            
            5,841,596
            
            
            
            4,188,677Stockholder's
      deficiency:Capital
      Stock:Preferred
      stock, Class A-par value of $.001;20,000,000
      shares authorized; No shares issued
            
            
            -
            
            
            
            -Common
      stock-par value of $.001; 3,000,000,000 sharesauthorized;
      38,775,518 and 28,832,455 shares issued andoutstanding
      September 30, 2008 and December 31, 2007 respectively
            
            
            38,775
            
            
            
            28,832Additional
      Paid in Capital
            
            
            8,996,873
            
            
            
            8,890,236Accumulated
      Deficiency
            
            
            (13,639,663
            )
            
            
            (11,122,325
            )Total
      Stockholder's Deficiency
            
            
            (4,604,015
            )
            
            
            (2,203,257
            )Total
      Liabilities and Stockholder's Deficiency
            
            $
            1,237,581
            
            
            $
            1,985,420







See Accompanying Notes to Condensed
Consolidated Financial Statements


4





RENEWAL FUELS,
      INCCONSOLIDATED
      STATEMENT OF OPERATIONS(Unaudited)Three
      Months
              Ended
              September
      30,
              2008
            
            
            Three
      Months
              Ended
              September
      30,
              2007
      (Restated)
            
            
            Nine
      Months
              Ended
              September
      30,
              2008
            
            
            Period
      from
              March
      9, 2007
              (Date
      of
              Inception)
      to September 30,
              2007
      (Restated)Sales
            
            $
            631,694
            
            
            $
            148,800
            
            
            $
            1,857,529
            
            
            $
            392,887Net
      Sales
            
            
            631,694
            
            
            
            148,800
            
            
            
            1,857,529
            
            
            
            392,887Cost
      of Goods Sold
            
            
            437,523
            
            
            
            109,048
            
            
            
            1,235,067
            
            
            
            251,390Gross
      Profit
            
            
            194,171
            
            
            
            39,752
            
            
            
            622,462
            
            
            
            141,497Operating
      Expenses:Employee
      compensation and benefits
            
            
            82,325
            
            
            
            243,101
            
            
            
            435,426
            
            
            
            277,373Stock-based
      transaction expense
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            5,131,231Occupancy
      and equipment
            
            
            105,896
            
            
            
            71,045
            
            
            
            181,900
            
            
            
            79,302Advertising
            
            
            21,442
            
            
            
            96,187
            
            
            
            73,216
            
            
            
            140,170Research
      and development
            
            
            -
            
            
            
            3,140,000
            
            
            
            -
            
            
            
            3,140,000Professional
      Fees
            
            
            56,723
            
            
            
            80,150
            
            
            
            319,406
            
            
            
            429,891Other
      general and administrative
            
            
            63,391
            
            
            
            217,665
            
            
            
            388,153
            
            
            
            315,209Amortization
      of Intangible Assets
            
            
            67,617
            
            
            
            45,268
            
            
            
            260,267
            
            
            
            58,707Total
      Operating Expenses
            
            
            397,394
            
            
            
            3,893,416
            
            
            
            1,658,368
            
            
            
            9,571,883Operating
      (Loss)
            
            
            (203,223
            )
            
            
            (3,853,664
            )
            
            
            (1,035,906
            )
            
            
            (9,430,386
            )Interest
      Income
            
            
            -
            
            
            
            68
            
            
            
            -
            
            
            
            823Interest
      Expense
            
            
            (433,036
            )
            
            
            (221,050
            )
            
            
            (1,077,838
            )
            
            
            (636,477
            )Financing
      Fees
            
            
            -
            
            
            
            (55,750
            )
            
            
            -
            
            
            
            (73,757
            )Discontinued
      Operations
            
            
            22,939
            
            
            
            -
            
            
            
            (373,868
            )
            
            
            -Other
      Income (Expenses)
            
            
            -
            
            
            
            (23,326
            )
            
            
            (29,727
            )
            
            
            (23,326
            )Net
      (Loss)
            
            $
            (613,320
            )
            
            $
            (4,153,722
            )
            
            $
            (2,517,339
            )
            
            $
            (10,163,123
            )Net
      (Loss) per share:Basic
      and Diluted
            
            $
            (0.02
            )
            
            $
            (0.16
            )
            
            $
            (0.08
            )
            
            $
            (0.41
            )Continued
      Operations
            
            $
            (0.01
            )
            
            $
            -
            
            
            $
            (0.06
            )
            
            $
            -Discontinued
      Operations
            
            $
            0.00
            
            
            $
            -
            
            
            $
            (0.01
            )
            
            $
            -Weighted
      average shares outstanding:Basic
            
            
            37,669,291
            
            
            
            26,228,929
            
            
            
            33,278,840
            
            
            
            24,795,793Diluted
            
            
            37,669,291
            
            
            
            26,228,929
            
            
            
            33,278,840
            
            
            
            24,795,793





See
Accompanying Notes to Condensed Consolidated Financial Statements


5




RENEWAL FUELS,
      INCCONSOLIDATED
      STATEMENT OF CASH FLOWS(Unaudited)Nine
      Months Ended September 30, 2008
            
            
            Period
      from
              March
      9,2007
              (Date
      ofInception)
      to September 30,2007 (Restated)Cash
      Flows From Operating ActivitiesNet
      Loss
            
            $
            (2,517,338
            )
            
            $
            (10,163,124
            )Adjustments
      to reconcile net income (loss) to net cashprovided
      by (used in) operating activities:Depreciation
      and amortization
            
            
            294,193
            
            
            
            142,356Accretion
      of debt discounts
            
            
            664,556
            
            
            
            634,550Stock-based
      transaction expense
            
            
            -
            
            
            
            5,131,231Provided
      services
            
            
            36,000
            
            
            
            -Research
      and Development
            
            
            -
            
            
            
            3,140,000Loss
      on disposed fixed assets
            
            
            -
            
            
            
            22,931Loss
      on Discontinued Operations
            
            
            373,868
            
            
            
            --Changes
      in operating assets and liabilities, netInventories
            
            
            (257,859
            )
            
            
            (12,856
            )Accounts
      receivable
            
            
            258,446Other
      current assets
            
            
            25,448
            
            
            
            (83,016
            )Accrued
      Interest
            
            
            443,118Discontinued
      Liabilities
            
            
            288,664
            
            
            
            -Accounts
      payable and accrued expenses
            
            
            80,118
            
            
            
            (316,707
            )Net
      Cash Provided by (Used in) Operating Activities
            
            
            (310,786
            )
            
            
            (1,504,635
            )Cash
      Flows From Investing Activities:Acquisition
      of FuelMeister assets
            
            
            -
            
            
            
            (494,426
            )Acquisition
      of Biodiesel Solutions
            
            
            -
            
            
            
            (422,014
            )Purchases
      of property and equipment
            
            
            (13,097
            )
            
            
            (46,081
            )Net
      Cash Flows Used In Investing Activities
            
            
            (13,097
            )
            
            
            (962,521
            )Cash
      Flows From Financing ActivitiesProceeds
      from issuance of common stock
            
            
            -
            
            
            
            57,279Proceeds
      from issuance of warrants
            
            
            -
            
            
            
            1,343,337Proceeds
      from issuance of beneficial conversion feature
            
            
            
            
            
            
            938,554Proceeds
      from issuance of long-term debt
            
            
            -
            
            
            
            1,118,109Payment
      of debt issuance costs
            
            
            -
            
            
            
            (450,000
            )Payment
      of fractional shares
            
            
            
            
            
            
            (68
            )Proceeds
      from note payables
            
            
            257,042
            
            
            
            -Net
      Cash Provided by Financing Activities
            
            
            257,042
            
            
            
            3,007,211Net
      Increase (Decrease) In Cash
            
            
            (66,841
            )
            
            
            540,056Cash-Beginning
      of period
            
            
            98,212
            
            
            
            -Cash-End
      of period
            
            $
            31,371
            
            
            $
            540,056SUPPLEMENTAL
      DISCLOSURE OF CASH ITEMS:Interest
      Paid
            
            $
            -
            
            
            $
            1,927Income
      Taxes Paid
            
            $
            418
            
            
            $
            -SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING & FINANCING
    ACTIVITIES:Stock
      warrants exercised
            
            $
            238,932
            
            
            $
            -Net
      liabilities assumed in a capitalization
            
            $
            -
            
            
            $
            1,677,020Provided
      services by Phoenix Investors, LLC
            
            $
            36,000
            
            
            $
            -Debt
      conversion to common stock
            
            $
            116,580
            
            
            $
            -




See
Accompanying Notes to Condensed Consolidated Financial Statements


6


RENEWAL FUELS, INC. and
Subsidiaries





NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





AS OF SEPTEMBER 30,
2008


(UNAUDITED)








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. 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. 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 shares of common stock of
the Company that were outstanding at July 31, 2007 (the “Old Shares”)
automatically converted into new 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.




Renewal
Biodiesel, Inc. (formerly Renewal Fuels, Inc.)(“Renewal Biodiesel”) acquired all
tangible and intangible assets of the FuelMeister Business of Biodiesel
Solutions, Inc. (“BSI”), a Nevada corporation, 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.




In
September 2007, the Company purchased two greenhouses which were later
transferred to our Renewal Plantations, Inc subsidiary (“RPI”), which was formed
as a wholly owned subsidiary on February 11, 2008.  RPI is engaged in
the growth of cellulosic feedstock for the biofuels industry.  A
Management Service Agreement between RPI and Emerald Energy, LLC (“Service
Agreement”) was consummated on February 11, 2008, providing for the completion
of the greenhouse installation and operation of the facility.  We are
establishing customers for the products to be produced by
RPI.  Recently, RPI learned that the root sections processed and
planted by Emerald Energy, LLC in April and May 2008 did not
survive.  According to Emerald Energy, LLC, the PH level of the soil
wasn’t proper for the sustained growth of the root sections.  RPI has
replenished and replanted a number of root sections and has engaged an
independent grower to supervise the conditions and growth of the roots. RPI and
Emerald Energy are in discussions to modify its Management Services Agreement
accordingly.





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.




7


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 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





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





The
consolidated financial statements include the accounts of Renewal Fuels, Inc.
(“Renewal”), the accounts of Renewal Biodiesel, the accounts of Biodiesel
Solutions, Inc. (“BSI”), and the accounts of Renewal Plantations, Inc (“RPI”).
All inter-company accounts and transactions have been eliminated in
consolidation.





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





Inventory





Inventories
consisted of the following at:





September
      30,
              2008
            
            
            December
      31,
              2007Raw
      materials
            
            $
            295,947
            
            
            $
            95,342Work-in-process
            
            
            58,795
            
            
            
            1,541$
            354,742
            
            
            $
            96,883





Intangible
Assets





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





Goodwill





Goodwill was recognized in July of 2007
due to the acquisitions of BSI.  On June 30, 2008, goodwill was
written off in connection to discontinued operations.





Derivative
Instruments and Beneficial Conversion Features





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




8




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.




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.




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





Interim
Condensed Consolidated Financial Statements





The
condensed consolidated financial statements as of September 30, 2008 and for the
three months ended September 30, 2008 and 2007 and for the nine months ended
September 30, 2008 and March 9, 2007 (Date of Inception) to September 30, 2007
are unaudited.   In the opinion of management, such condensed
consolidated financial statements include all adjustments (consisting of normal
recurring accruals) necessary for the fair representation of the consolidated
financial position and the consolidated results of
operations.   The consolidated results of operations for the
periods presented are not necessarily indicative of the results to be expected
for the full year.  The interim condensed consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements for the year end December 31, 2007 appearing in Form 10KSB filed on
April 15, 2008.





Impact
of Recently Issued Accounting Pronouncements





Management
believes that no new pronouncements will have a material affect on the
financials.





NOTE  3
DISCONTINUED OPERATIONS





On April
15, 2008, BSI ceased its development operations of factory-built biodiesel
equipment called BiodieselMaster® due to rising input costs and the development
of more efficient means of converting vegetable oil into biodiesel
fuel.  The Company sold productive and shop equipment previously used
in BSI operations for $13,264 on July 9, 2008.  The Company wrote off
$373,868 of intangibles, goodwill, and remainder of the fixed
assets.





NOTE  4
LEGAL PROCEEDINGS





On August
22, 2008, legal proceedings were filed against BSI for balance due on lease
related expenses and unpaid rent.  The Company has accrued $92,224 in
unpaid lease charges.  An attorney has been hired to represent
BSI.




9


NOTE 5 INTANGIBLE ASSETS





The
following table summarizes amortized intangible assets:





Amortized Intangible
      Assets
            
            As
      of December 31, 2007
            
            As
      of September 30, 2008Gross
              Amount
            
            
            Accumulated
      Amortization
            
            
            Net
              Amount
            
            Expensed/
              Written
      Off
            
            Carrying
              AmountCustomer
      Lists
            
            $
            70,000
            
            
            $
            3,500
            
            
            $
            66,500
            
            $
            3,500
            
            $
            63,000Engineering
      drawings
            
            
            70,000
            
            
            
            10,500
            
            
            
            59,500
            
            
            9,500
            
            
            50,000Non-compete
      agreement
            
            
            146,000
            
            
            
            50,492
            
            
            
            95,508
            
            
            95,508
            
            
            -Tradename
            
            
            118,000
            
            
            
            8,850
            
            
            
            109,150
            
            
            8,850
            
            
            101,300Patent
      application
            
            
            3,000
            
            
            
            2,250
            
            
            
            750
            
            
            750
            
            
            -Employment agreements
            
            
            114,000
            
            
            
            28,383
            
            
            
            85,617
            
            
            85,617
            
            
            -$
            521,000
            
            
            $
            103,975
            
            
            $
            417,025
            
            $
            203,725
            
            $
            214,300Financing
      Fees
            
            $
            480,000
            
            
            $
            130,007
            
            
            $
            349,993
            
            $
            180,000
            
            $
            169,993Aggregate Amortization
      ExpenseNine
      months ended September 30, 2008
            
            $
            260,267




Estimated
      Intangible Amortization Expense:Quarter
      ending December 31, 2008
            
            
            
            
            
            
            
            
            
            
            67,617Year
      ending December 31, 2009
            
            
            
            
            
            
            
            
            
            
            140,460Year
      ending December 31, 2010
            
            
            
            
            
            
            
            
            
            
            30,467Year
      ending December 31, 2011
            
            
            
            
            
            
            
            
            
            
            30,467Year
      ending December 31, 2012
            
            
            
            
            
            
            
            
            
            
            19,967Thereafter
            
            
            
            
            
            
            
            
            
            
            95,315





NOTE 6  DEBT




At
      September 30, 2008 short-term debt consists of the
      following:YA
      Global Investments, L.P., $300,000 convertible debenture, due December 31,
      2009, including interest at prime + 2.75% or minimum 10% (10% at September
      30, 2008) (accrued interest as of September 30, 2008 is $22,521) in
      default
            
            $
            322,521Less
      unamortized discount from warrants and beneficial conversion
      feature
            
            
            (297,034
            )25,487YA Global
      Investments, L.P., $1,000,000 convertible debenture, due April 20, 2009,
      including interest at prime + 2.75% or minimum 10% (10% at September 30,
      2008) (accrued interest as of September 30, 2008 is $150,195) in
      default
            
            
            1,150,195Less unamortized
      discount from warrants and beneficial conversion feature
            
            
            (168,554
            )981,641YA Global
      Investments, L.P., $400,000 convertible debenture, due May 31, 2009,
      including interest at prime + 2.75% or minimum 10% (10% at September 30,
      2008) (accrued interest as of September 30, 2008 is $55,018) in
      default
            
            
            455,018Less unamortized
      discount from beneficial conversion feature
            
            
            (333,953
            )121,065YA Global
      Investments, L.P., $2,000,000 convertible debenture, due July 2, 2009,
      including interest at prime + 2.75% or minimum 10% (10% at September 30,
      2008) (accrued interest as of September 30, 2008 is $256,384) in
      default
            
            
            2,256,384Less
      unamortized discount from warrants and beneficial conversion
      feature
            
            
            (880,626
            )1,375,758Montgomery Equity
      Partners, Ltd., $300,000 15% convertible debenture, due on demand,
      including accrued interest of $206,216 through September 30, 2008 in
      default
            
            
            506,216Montgomery Equity
      Partners, Ltd., $205,640 15% convertible debenture, due on demand,
      including accrued interest of $116,542 through September 30, 2008 in
      default
            
            
            322,182LH
      Financial, $156,080 18% convertible promissory note, due on demand,
      including accrued interest of $129,753 through September 30, 2008 in
      default
            
            
            285,833Total current,
      convertible debt obligations, including accrued interest
            
            $
            3,618,182







10







On
December 31, 2007, the Company entered into an Amendment Agreement (the
"Amendment Agreement") with YA Global, amending the Additional Purchase
Agreement of July 2, 2007, to provide for the sale by the Company to YA Global
of its secured convertible debentures in the aggregate principal amount of
$300,000 (the "Second Additional Debentures").   As part of the
Amendment Agreement, the Company agreed that it would comply with the
requirement to have unconditionally booked and received at least a 50% deposit
for the sale of at least one BiodieselMaster® unit no later than January 31,
2008.  The Company also agreed to have signed a definitive joint
venture with Eco Plantations no later than January 31, 2008.  The
Company has not complied with these undertakings and, accordingly, all its
obligations to YA Global are in default.   Concurrently with the
additional funding from YA Global, certain stockholders and management of the
Company loaned $150,000 to the Company (see Note 8) and the Company covenanted
to YA Global that, as long as the debentures issued by the Company to YA Global
are outstanding, that these loans would not be repaid without the express
written consent of YA Global.




As part
of the Amendment Agreement dated December 31, 2007, the Company also agreed to
reduce the exercise price of the 1,200,000 warrants issued to YA Global on April
20, 2007 from $0.15 per share to $0.001 per share and to reduce the exercise
price of 1,200,000 of the 2,250,000 warrants issued to YA Global on July 2, 2007
from $0.90 per share to $0.001 per share.  The cost of these
reductions in the exercise price was estimated at $78,337, based on the value of
the warrants immediately before and after the change in the exercise
prices,  using the Cox-Ross-Rubenstein binomial model, based on the
market price of $0.23, estimated volatility of 123%, a risk free rate of 3.45%
and the remaining life of the warrants.  On March 27, 2008, YA Global
completed a cashless exercise of the 1,200,000 warrants originally issued on
April 20,2007 and wereissued 1,186,813 shares of
common stock.




The
interest rate, repayment terms, conversion rights, conversion price,
anti-dilution provisions, redemption provisions, events of default and
registration requirements of the second Additional Debentures are identical to
those of the New Debentures described above, except that the fixed element of
the conversion price is $0.05, not $0.60.




All of
the above obligations to YA Global, together with prior obligations to YA Global
described below, are secured by a security interest in our assets and the assets
of our subsidiaries, including their intellectual property.  In
addition, we pledged the shares of Renewal Biodiesel and BSI to YA Global as
additional security for the obligations to YA Global.





(a)$1,400,000
Convertible Debentures





On April
20, 2007, we entered into a Securities Purchase Agreement (the "Purchase
Agreement") with YA Global Investments, L.P. (“YA Global”) providing for the
sale to YA Global of our 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 installment 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"). We are 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 our common stock 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. We have 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 we sell or otherwise issue 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 our Control, the our 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 our common stock on a recognized
exchange.




Under the
Purchase Agreement, we also issued to YA Global five-year warrants to purchase
1,200,000 shares of common stock at an exercise price of $0.15 per share. The
warrants were valued at $238,932 using the Cox-Ross-Rubenstein binomial model,
based on the market price at the time they were issued of $0.2265, estimated
volatility of 123%, a risk free rate of 4.75% and the five year life of the
warrants.




11




In
connection with the Purchase Agreement, we also entered into a registration
rights agreement with YA Global (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, we
are 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. We are 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, we are required to pay to YA Global, 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%. No demand for registration
has been received by us and the Debenture is in default.





$2,700,000 Convertible Note
Financing




On July
2, 2007, we entered into an additional Securities Purchase Agreement (the
"Additional Purchase Agreement") with YA Global providing for the sale to YA
Global of our 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 was to be funded within two
business days after we have 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.




Under the
Additional Purchase Agreement, we also issued to YA Global five-year warrants to
purchase 2,250,000 shares of common stock at an exercise price of $0.90 per
share. The warrants were valued at $1,104,405 using the Cox-Ross-Rubenstein
binomial model, based on the market price at the time they were issued of $0.60,
estimated volatility of 123%, a risk free rate of 4.90% and the five year life
of the warrants.  The Additional Debentures are in default and no
demand for payment has been received by us.




(b)
Prior
obligations





On April
20, 2007, as part of the net liabilities assumed on the reverse merger, we
assumed certain existing obligations to YA Global 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 YA
Global (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. In connection
with one of these Old Debentures, we previously issued warrants to purchase
6,667 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. Through the nine months
ended September 30, 2008, YA Global converted $116,800 of Old Debenture into
8,756,250 shares of common stock.




In
connection with these Old Debentures, we are obligated to file a Registration
Statement with the SEC, registering the shares issuable on conversion of the Old
Debentures and the Old Warrants. We have not filed the required registration
statement (which was required to be filed by March 27, 2006 and effective by May
26, 2006). Under the terms of the Old Debentures, we are required to pay to YA
Global, 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. We have received a
letter dated November 14, 2007 from YA Global waiving, as of that date, all
rights to collect any and all liquidated damages arising from any default under
any of the convertible debenture agreements. Because any common shares obtained
by YA Global on conversion of the Old Debentures may now be freely sold by them
under Rule 144(k), without volume restrictions and without registration, we do
not believe we will be subject to any penalties after November 14, 2007 for not
filing the required registration statement.




12




We also assumed the remaining portions
of a convertible promissory note that was originally issued in 2000. A portion
of the note is held by YA Global 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. In 2007, YA Global converted their entire
principal amount of $168,000 plus all accrued interest thereon of $61,000 into
574,807 common shares.





Default





The prior
obligations assumed in the reverse merger are past due and are therefore in
default.  As noted above, as part of the December 31, 2007 Amendment
Agreement, the Company agreed that it would comply with the requirement to have
unconditionally booked and received at least a 50% deposit for the sale of at
least one BiodieselMaster® unit no later than January 31, 2008.  The
Company also agreed to have signed a definitive joint venture with Eco
Plantations no later than January 31, 2008.  The Company has not
complied with these undertakings and, accordingly, all its obligations to YA
Global are in default.  As a result, all of the Company’s convertible
debt obligations are in default, permitting the holders to demand immediate
payment, and have therefore been classified as current at September 30,
2008.





Forbearance
Agreement





On April
28, 2008, the Company entered into a Forbearance Agreement (the “Agreement”)
with Montgomery Equity Partners, Ltd. (“Montgomery”) and YA
Global.  This secured convertible indebtedness of Montgomery and YA
Global (collectively, “Lenders”) had an aggregate principal balance, as of April
21, 2008, of approximately $4,249,720, and aggregate accrued unpaid interest of
approximately $562,920.




Pursuant
to the Agreement, the Company gave formal written notice to the Lenders of
events constituting defaults under the notes and other documents evidencing and
securing the Indebtedness (the “Loan Documents”), that are continuing, including
the Company’s failure to repay a portion of the indebtedness that had
matured.




Pursuant
to the Agreement, Lenders agreed to forbear from exercising their rights and
remedies under the Loan Documents until September 30, 2008, unless and until
there is a new default under the Loan Documents.  In connection with
the Forbearance Agreement, the Company agreed (a) to amend the warrant entitling
YA Global to purchase 1,050,000 common shares of the Company, to reduce the
exercise price to $.001 per share; (b) to increase the interest rate payable on
the Indebtedness to 13% per annum; (c) to allow the Company to prepay the
indebtedness at any time prior to September 30,2008; (d) to extend the maturity
of the portion of the debentures due December 28, 2006 (evidencing a portion of
the Indebtedness in the aggregate principal amount of $549,720, and being the
only portion of the indebtedness that has or will mature prior to September 30,
2008) to September 30, 2008; and (e) for the Company’s cash deposits, to enter
into a Deposit Account Control Agreement with a bank that, upon the earlier of a
new default under the Loan Documents or September 30, 2008, gives YA Global
exclusive and immediate control over the Company’s cash deposits in such
account.




The
Company has not received demand for payment under the Agreement and is in
default.





NOTE 7  NOTES PAYABLES





On
December 13, 2007, we issued two notes, each with a principal amount of $50,000
(an aggregate of $100,000) to two stockholders.  The Notes have a
maturity date of February 11, 2008 and bear interest of 12% per annum. We are
precluded from repaying the Notes without the express written consent of YA
Global.   On January 24, 2008, an amendment was issued on both
notes increasing the aggregate amount of each note to $55,500.  As of
September 30, 2008, each note had a balance of $60,714, including accrued
interest.  The Company has not made any payments on the notes and the
notes are in default.





NOTE
8  RELATED PARY - NOTES PAYABLES





On
December 13, 2007, we issued a note with the principal amount of $50,000 to
Phoenix Investors, LLC (“Phoenix”).  David Marks, the sole member of
the Board of Directors, is the managing member of Phoenix.  On April
21, 2008, the Company revised the note into a Loan and Security Agreement (the
“Agreement”).  Phoenix will provide funds of up to $500,000 (the
“Loan” and all amounts loaned pursuant to the Agreement will hereinafter be
referred to as “Term Loans”) from time to time upon the written request of
RPI.  The Loan has a maturity date of July 15, 2008 and bears an
interest rate of 13%.  In connection with the Loan, Phoenix shall be
paid a loan original fee of $50,000 and receive warrants to purchase 20,000,000
shares of the common stock of the Company. The warrants are exercisable for a
period of five years at an exercise price of $0.05 per share.  As of
September 30, 2008, the balance of the note is $382,739, including accrued
interest and the loan origination fee.  The loan is in default, which
increased the interest rate to 17%.




13






We
utilize space and employees in Milwaukee, Wisconsin of an entity controlled by
the Chairman of the Board of Directors. The fair value of the space and work
done by the employees is $6,000 per month. As of September 30, 2008, $100,000 is
included in the Phoenix note.




NOTE 9 OTHER COMMITMENTS AND
CONTINGENCIES





As
described in Note 6, the Company entered into a Registration Rights Agreement
with YA Global 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 YA Global. Upon written demand from YA Global,
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 YA Global, 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%.




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




We
believe transparency and clarity are the primary goals of successful financial
reporting. We remain committed to increasing the transparency of our financial
reporting, providing our shareholders with informative financial disclosures and
presenting an accurate view of our financial position and operating
results.




Management’s
Discussion and Analysis of Financial Condition and Results of Operations
(“MD&A”) is designed to provide a reader of our financial statements with a
narrative from the perspective of our management on our financial condition,
results of operations, liquidity, and certain other factors that may affect our
future results. Our MD&A is presented in the following
sections:




●
            Overview





●
            History





●
            Business
      Strategy, Core Philosophies, and Current
  Operations





●
            Results
      of Operations




●
            Liquidity
      and Capital Resources





●
            Off-Balance-Sheet
      Arrangements





●
            Qualitative
      and Quantitative Disclosures About Market
Risk





●
            Outlook





The
following discussion and other sections of this Form 10-Q 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.




14




THE
INFORMATION CONTAINED IN THIS FORM 10-Q 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, September 30, 2008, Renewal Fuels, Inc. (“Renewal”) had
three wholly-owned subsidiaries - Renewal Biodiesel, Inc. (“Renewal Biodiesel”),
Biodiesel Solutions, Inc. (“BSI”), and Renewal Plantations, Inc
(“RPI”).




Renewal
Biodiesel was incorporated in the state of Delaware on March 9, 2007 and
acquired the business, fixed assets and inventory of the FuelMeister business of
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.




BSI was
established to manufacture a factory-built biodiesel processing plant that is
designed to produce 350,000 gallons of biodiesel per year, appropriately scaled
for a variety of customers, including small communities, farms, farm co-ops and
trucking fleets. The design was to provide a biodiesel production system that is
continuous, flexible, efficient, affordable, and fully-automated. The automated
control system would minimize labor costs and facilitate remote diagnostics.
BSI’s manufacturing facilities were located in Sparks, Nevada, adjacent to the
manufacturing facilities for Renewal Biodiesel.  As of April 15, 2008
BSI ceased development operations due to rising input costs and the development
of more efficient means of converting vegetable oil into biodiesel fuel.
Employment agreements for BSI employees have been terminated as of April 15,
2008.  The Company sold productive and shop equipment previously used
in BSI operations on July 9, 2008.  The Company wrote off $373,868 of
intangibles, goodwill, and remainder of the fixed assets.




RPI is
engaged in the growth of cellulosic feedstock for the biofuels
industry.  Through a service agreement with a third party, we are
establishing nurseries for the growth of unique high density, short-rotation
trees, which are designed to provide a very high concentration of biomass per
acre.  A Management Service Agreement between RPI and Emerald Energy,
LLC (“Service Agreement”) was consummated on February 11, 2008, providing for
the completion of the greenhouse installation and operation of the
facility.  We are establishing customers for the products to be
produced by RPI.  Recently, RPI learned that the root sections
processed and planted by Emerald Energy, LLC in April and May 2008 did not
survive.  According to Emerald Energy, LLC, the PH level of the soil
wasn’t proper for the sustained growth of the root sections.  RPI has
engaged an independent grower to grow the replaced root
sections.  These root sections appear to be growing
normally.  RPI and Emerald Energy, LLC are in ongoing discussions
about how to modify their relationship given these developments.





HISTORY





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





On April
20, 2007, Tech Laboratories, Inc. entered into a Merger Agreement with Renewal
Biodiesel, a Delaware corporation formed in 2007 for the purposes of the asset
acquisition of the FuelMeister Business 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 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





The net
liabilities assumed primarily represent debt obligations to YA Global
Investments, L.P. (“YA Global”) and were assumed in connection with the
provision of additional long-term debt financing provided by YA Global (see Note
7 in our accompanying consolidated financial statements included in this
Report), which additional funding was provided simultaneously with the reverse
merger and recapitalization. Accordingly, the net liabilities assumed were
recorded as deferred financing costs incurred in connection with the additional
debt funding provided by YA Global and are being amortized by periodic charges
to income on a straight-line basis over the life of that debt funding. In
addition, the Company paid $180,000 in fees in connection with the additional
debt funding provided by YA Global.




15




Tech
Laboratories had no active business operations immediately prior to the merger.
Mr. John King, former Chief Executive Officer and Mr. David Marks, Chairman were
officers and directors and were minority shareholders 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




(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.




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 which was effective on August 1, 2007. As a result, the shares
of common stock of the Company (the "Old Shares") that were outstanding at July
31, 2007 automatically converted into 23,805,126 shares of common stock
(the "New Shares"). All common share and per share amounts in our 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.




16


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 YA Global (see Note 7 in the accompanying
consolidated financial statements). 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.




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





BUSINESS STRATEGY, CORE
PHILOSOPHIES, CURRENT OPERATIONS





Renewal
Fuels is dedicated to technologies that enable the production of high quality
fuels from a variety of non-food feedstock sources and waste streams. We believe
that developed and emerging technologies to produce fuels from waste will
provide an important alternative to feedstock sources which compete with uses
for food.




Renewal
Fuels’ business model includes strategic partnerships and acquisitions in the
expanding biofuels industry. Increasing political and social responsiveness,
combined with exciting developments in biofuel technology, has created an
unprecedented environment for organic growth as well as growth through
acquisitions. Our focused business model is designed to facilitate high profit
margins and security of feedstock pricing.




The
management of Renewal Fuels is establishing relationships with multiple biofuel
entities with projects, products, and technologies at various stages of
development, fitting the Company’s mission. The company is currently seeking
additional technologies and businesses to add to its portfolio, which currently
includes the businesses described below.




Renewal
manufactures and markets the FuelMeister® line of personal biodiesel processors
from its facility in Sparks, NV. The FuelMeister allows a user to make biodiesel
from waste vegetable oil, for personal use. The FuelMeister line of biodiesel
processors are produced from industrial-grade materials. In general, it takes
approximately 1/2 hour hands-on time per batch of biodiesel fuel production. The
products offered are not do-it-yourself kits, but complete systems with all key
components needed to make biodiesel ‘at home’ with ease and
confidence.




FuelMeister
biodiesel processors are supplied with a user safety kit, oil titration and
field test kit, high quality steel methanol pump, and easy prime oil draw tube.
Quick disconnect fittings allow for future expansion and more convenient
connection of tanks. If capacity needs change, additional modular tanks, lids,
and accessories can be added to the FuelMeister II platform. A customer can
start making biodiesel the same day the system arrives. All that is required is
a barrel of used fryer oil (typically collected at no charge from local
restaurants), lye (at a typical cost of 20¢/gallon of biodiesel), a barrel of
racing methanol (at a typical cost of 50¢ /gallon of biodiesel), a barrel for
the finished biodiesel, AC power, and a water hose. Renewal’s products are
designed specifically to allow shipment by UPS in order to minimize customers’
freight expenses.  Any machines operating on diesel fuel, including
cars, trucks, generators, tractors, furnaces, etc. may be powered with the
biodiesel produced with the FuelMeister II biodiesel production
system.




17


RPI is
engaged in the growth of cellulosic feedstock for the biofuels
industry.  Through a service agreement with another party, we are
establishing nurseries for the growth of unique high density, short-rotation
trees, which are designed to provide a very high concentration of biomass per
acre.  We are currently completing installation of the nurseries and
establishing customers for the products to be produced by RPI. A Management
Service Agreement between RPI and Emerald Energy, LLC was consummated on
February 11, 2008, providing for the completion of the greenhouse installation
and operation of the facility.  Root sections were purchased for
$50,000 in 2008.  In April and May of 2008, the root sections did not
survive due to growing circumstances.  In August 2008, RPI has
replenished and replanted a number of root sections and has engaged an
independent grower to supervise the conditions and growth of the roots. RPI and
Emerald Energy are in discussions to modify its Management Services Agreement
accordingly.





RESULTS OF
OPERATIONS





Although
the revenue generating activities of the FuelMeister Business, 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 the 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 September 30, 2008 and 2007(
      Unaudited);●
            Results
      of operations for the nine months ended September 30, 2008 and the period
      March 9, 2007 (date of inception) through September 30, 2007 (
      Uunaudited);





RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND
2007




Revenues





For the
three months ended September 30, 2008, revenues were $631,694, an increase when
compared with the three months ended September 30, 2007 of $148,800 is due to
sales of the Fuelmeister product while fuel prices were high.  Even
though sales have increased, quarter by quarter, the sales are slowly decreasing
due to fuel prices decreasing, hence the demand for the Fuelmeister product has
decreased.





Cost
of Sales and Gross Profit





Cost of
sales for the three months ended September 30, 2008 was $437,523, resulting in a
gross profit of $194,171 for the three months ended September 30, 2008 an
increase when compared to three months ended September 30, 2007 of $109,048 and
a gross profit of $39,752 due to an increase in sales of the Fuelmeister
product.





Employee
Compensation and Benefits





Employee
compensation and benefits were $82,325 for the three months ended September 30,
2008 a decrease when compared to three months ended September 30, 2007 of
$243,101 due to the termination of BSI employees on April 14, 2008.





Occupancy
and Equipment





Occupancy
and equipment expenses, consisting of rent, depreciation, and other
miscellaneous expenses, amounted to $105,896 for the three months ended
September 30, 2008 an increase when compared with the three months ended
September 30, 2007 of $71,045 due to balance owed on the building lease for
BSI.





Advertising
Expenses





Advertising
expenses were $21,442 for the three months ended September 30, 2008 decreased
when compared with the three months ended September 30, 2007 of $96,187 due to
less advertising and website costs because of discontinued operations at
BSI.





Professional
Fees





Professional
fees, consisting primarily of accounting, attorney and accountant fees, were
$56,723 for the three months ended September 30, 2008 decreased when compared
with the three months ended September 30, 2007 of $80,150 is due to the costs
associated with the acquisitions and mergers in 2007.




18


Research
and development




Stock-based
transaction expense was $5,131,231 for the three months ended September 30,
2007, associated with the acquisition of Fuelmeister.





General
and Administrative Expenses





General
and administrative expenses, consisting of administrative expenses, insurance
and other non-manufacturing related expenses were $63,391 for the three months
ended September 30, 2008 decreased when compared with the three months ended
September 30, 2007 of $217,665 due to BSI no longer operating.





Amortization
of Intangible Assets





Amortization
of intangible assets was $67,617 for the three months ended September 30, 2008,
increased when compared to the three months ended September 30, 2007 of $45,268
primarily due to the amortization of assets acquired in the acquisition of
Fuelmeister and BSI.





Interest
Expense





Interest
expense, of $433,036 for the three months ended September 30, 2008increased when
compared with the three months ended September 30, 2007 of $221,050 due to the
interest and debt discount associated with all convertible debenture
obligations.





Discontinued
Operations




Discontinued
operations for the three months ended September 30, 2008 of $22,939 compared to
the three months ended September 30, 2007 of $0 is due to discontinued
operations of BSI in 2008.





Net
Loss





As a
result of the above, we reported a net loss of $613,320 for the three months
ended September 30, 2008 and a net loss of $4,153,722 for the three months ended
September 30, 2007.





RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 and MARCH 9, 2007
(DATE OF INCEPTION) TO SEPTEMBER 30, 2007.





Revenues





For the
nine months ended September 30, 2008, revenues were $1,857,529 increased when
compared with period of March 9, 2007 (Date of Inception) to September 30, 2007
of $392,887 due to sales of the Fuelmeister product which are higher due to
higher gas prices.  Even though sales have increased, year by year,
the sales have slowly decreased due to fuel prices dropping and the demand for
the Fuelmeister product has decreased.





Cost
of Sales and Gross Profit





Cost of
sales for the nine months ended September 30, 2008 was $1,235,067 resulting in a
gross profit of $622,462 for the nine months ended September 30, 2008 increased
when compared to $251,390 and a gross profit of $141,497 for March 9, 2007
(Date of Inception) to September 30, 2007 due successful sales and production of
the Fuelmeister product.





Employee
Compensation and Benefits





Employee
compensation and benefits were $435,426 for the nine months ended September 30,
2008 increased when compared to March 9, 2007 (Date of Inception) to September
30, 2007 of $277,373 due to overtime associated with the sales of the
Fuelmeister product.





Stock-based
Transaction Expense




Stock-based
transaction expense was $0 for the nine months ended September 30, 2008 compared
to $5,131,231 for March 9, 2007 (Date of Inception) to September 30, 2007 due to
the acquisition of the Fuelmeister product.





Occupancy
and Equipment





Occupancy
and equipment expenses, consisting of rent, depreciation, and other
miscellaneous expenses, amounted to $181,900 for the nine months ended September
30, 2008 increased when compared with March 9, 2007 (Date of Inception) to
September 30, 2007 of 79,302 due to facility production for the FuelMeister
product and balance owed for the building lease for BSI.




19


Advertising
Expenses





Advertising
expenses were $73,216 for the nine months ended September 30, 2008 decreased
when compared with March 9, 2007 (Date of Inception) to September 30, 2007 of
$140,170 due to BSI no longer operating and lower advertising for the
Fuelmeister product.





Research
and development





Stock-based
transaction expense was $0 for the nine months ended September 30, 2008 compared
to $3,140,000 for March 9, 2007 (Date of Inception) to September 30, 2007 due to
the acquisition of the RBI.





Professional
Fees





Professional
fees, consisting primarily of accounting and attorney fees were $319,406 for the
nine months ended September 30, 2008 decreased when compared with March 9, 2007
(Date of Inception) to September 30, 2007 of $429,891 due to acquisition and
merger costs in 2007, where we had no acquisitions and mergers in
2008.





General
and Administrative Expenses





General and administrative expenses,
consisting of administrative expenses, insurance and other non-manufacturing
related expenses were $388,153 for the nine months ended September 30, 2008
increased when compared with March 9, 2007 (Date of Inception) to September 30,
2007 of $315,209 due to additional costs associated with the
Fuelmeister.





Amortization
of Intangible Assets





Amortization
of intangible assets was $260,267 for the nine months ended September 30, 2008
increased when compared to March 9, 2007 (Date of Inception) to September
30, 2007 of $58,707 due to a full nine months in 2008 for the amortization of
assets acquired in the acquisition Fuelmeister and BSI.





Interest
Expense





Interest
expense of interest expense of $1,077,838 for the nine months ended September
30, 2008 increased when compared with March 9, 2007 (Date of Inception) to
September 30, 2007, interest of $636,477 due to all of the convertible debenture
obligations for 2008.





Discontinued
Operations





Discontinued
operations of $(373,868) for the nine months ended September 30, 2008 compared
to $0 for March 9, 2007 (Date of Inception) to September 30, 2007 is due to BSI
no longer operating in 2008.





Net
Loss





As a
result of the above, we reported a net loss of $2,517,339 for the nine months
ended September 30, 2008 and a net loss of $10,163,124 for March 9, 2007 (Date
of Inception) to September 30, 2007.





LIQUIDITY AND CAPITAL
RESOURCES





Cash
and Cash Flows From Operations:





The
accompanying condensed consolidated financial statements have been prepared
assuming we will continue as a going concern. During the nine months ended
September 30, 2008, we had a net loss of $2,517,339 which included non-cash
items totaling $1,746,948, consisting primarily of depreciation, amortization of
financing fees, convertible debt, and discontinuation of operations. Our
existence is dependent on management’s ability to develop profitable operations
and successful integration of our acquired businesses.




Net cash
used in investing activities was $13,097, which is the purchase of depreciable
assets.




Net cash
provided by financing activities was $257,042 which was provided by proceeds
from note payables from stockholders. We currently do not have sufficient cash
reserves to meet all of our anticipated obligations for the next twelve months
and there can be no assurance that we will ultimately close on the necessary
financing. We currently expect that funding from related parties, third-party
financing, or equity may be a continuing source of liquidity to fund our
operations.





OFF-BALANCE SHEET
ARRANGEMENTS





We
currently have no off balance sheet arrangements, other than the property leases
described in the footnotes to the financial statements.





20


CRITICAL ACCOUNTING
POLICIES





Going
Concern




Our
ability to continue as a going concern is dependent on our ability to obtain
additional funds through debt and equity funding as well as increasing sales of
biodiesel units.   With these sales the Company anticipates that
it will become less reliant on short-term financing.




Concentrations
of Credit Risk




The
Company has several customers that accounted for the total revenue for the nine
months ended September 30, 2008.




Revenue
Recognition




The
Company recognizes sales when earned.  At the time of the transaction,
the Company assesses payment terms associated with the transaction and whether
collectibility is reasonably assured.  If a significant portion of a
fee is due after the normal payment terms, the Company accounts for the fee as
not being fixed and determinable.  In these cases, the Company
recognizes revenue as the fees become due.  Where the Company provides
a sale at a specific point in time and there are no remaining obligations, the
Company recognizes revenue upon completion of the sale.




ITEM 3. - QUALITATIVE AND
QUANTITATIVE DISCLOSURE ABOUT MARKET RISK





None.





ITEM4.-CONTROLS AND
PROCEDURES.





Disclosure
Controls and Procedures




As
required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end
of the period covered by this report, we have carried out an evaluation of the
effectiveness of the design and operation of our company’s disclosure controls
and procedures. Under the direction of our Chief Executive Officer and Chief
Financial Officer, we evaluated our disclosure controls and procedures and
internal control over financial reporting and concluded that (i) there continue
to be material weaknesses in the Company’s internal controls over financial
reporting, that the weaknesses constitute a “deficiency” and that this
deficiency could result in misstatements of the foregoing accounts and
disclosures that could result in a material misstatement to the consolidated
financial statements for the current period that would not be detected, (ii)
accordingly, our disclosure controls and procedures were not effective as
of  September 30, 2008, and (iii) no change in internal controls over
financial reporting occurred during the quarter ended September 30, 2008, that
has materially affected, or is reasonably likely to materially affect,  our
internal control over financial reporting; provided, however, that it is to be
noted that, based on the above described material weakness, our management,
including our CEO and CFO have concluded that we did not maintain effective
internal control over financial reporting as of September 30, 2008.




Disclosure
controls and procedures and other procedures are designed to ensure that
information required to be disclosed in our reports or submitted under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported
within the time period 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 Securities Exchange Act of 1934 is
accumulated and communicated to management including our president and financial
officer as appropriate, to allow timely decisions regarding required
disclosure.




On April
15, 2008, Bryan Chance, age 38, was appointed as Chief Executive Officer and
Chief Financial Officer of the Company.  Mr. Chance is a certified
public accountant and has served as Chief Financial Officer of Titan Global
Holdings, Inc. since January 24, 2006 and as President and Chief Executive
Officer since August 18, 2006.  Mr. Chance also served as Chief
Financial Officer for Aslung Pharmaceutical, a privately held generic
pharmaceutical manufacturing company from 2000 to 2002 and has held financial
and mergers and acquisition leadership positions in companies such as Caresouth,
Nursefinders, Home Health Corporation of America, the Baylor Healthcare System,
Columbia/HCA and Price Waterhouse, LLP.  By appointing someone who is
qualified as a CPA and has considerable experience serving as a Chief Financial
Officer, the Company has endeavored to provide the financial leadership that the
Company requires in order to eliminate the weaknesses in its internal controls
over financial reporting and otherwise design, implement and maintain a
sufficient systems of internal financial controls.




Changes
in Internal Control Over Financial Reporting




There
have been no changes in our internal controls over financial reporting during
the quarter ended September 30, 2008, which have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.





21





PART
II - OTHER INFORMATION





ITEM
1. Legal Proceedings.





On August
22, 2008, an injunction was filed against BSI in the state of Nevada and county
of Washoe.  The injunction orders BSI to pay $92,224, which is the
balance due for lease related expenses and unpaid rent, remove all personal
property from the premises at 1395 Greg St, #102, Sparks, Nevada; where BSI
resided, remove all environmental hazards, and repair and restore premises to
original condition.  An attorney has been hired to represent
BSI.  We do not believe that the injunction will prevail over
damages.





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





None.





ITEM 3. Defaults Upon Senior Securities.





See Notes to Condensed Consolidated
Financial Statements, Note 6 Debt





YA Global
Investments, L.P., $300,000 convertible debenture, due December 31,
2009


YA Global
Investments, L.P., $1,000,000 convertible debenture, due April 20,
2009


YA Global
Investments, L.P., $400,000 convertible debenture, due May 31, 2009


YA Global
Investments, L.P., $2,000,000 convertible debenture, due July 2,
2009


Montgomery
Equity Partners, Ltd., $300,000 15% convertible debenture, due on
demand


Montgomery
Equity Partners, Ltd., $208,920 15% convertible debenture, due on
demand


LH
Financial, $156,080 18% convertible promissory note, due on demand


Phoenix
Investors, LLC, $341,651, due July 15, 2008, due on demand





Forbearance
Agreement





On April
28, 2008, the Company entered into a Forbearance Agreement (the “Agreement”)
with Montgomery Equity Partners, Ltd. (“Montgomery”) and YA
Global.  This secured convertible indebtedness of Montgomery and YA
Global (collectively, “Lenders”) had an aggregate principal balance, as of April
21, 2008, of approximately $4,249,720, and aggregate accrued unpaid interest of
approximately $562,920.




Pursuant
to the Agreement, the Company gave formal written notice to the Lenders of
events constituting defaults under the notes and other documents evidencing and
securing the Indebtedness (the “Loan Documents”), that are continuing, including
the Company’s failure to repay a portion of the indebtedness that had
matured.




Pursuant
to the Agreement, Lenders agreed to forbear from exercising their rights and
remedies under the Loan Documents until September 30, 2008, unless and until
there is a new default under the Loan Documents.  In connection with
the Forbearance Agreement, the Company agreed (a) to amend the warrant entitling
YA Global to purchase 1,050,000 common shares of the Company, to reduce the
exercise price to $.001 per share; (b) to increase the interest rate payable on
the Indebtedness to 13% per annum; (c) to allow the Company to prepay the
indebtedness at any time prior to September 30,2008; (d) to extend the maturity
of the portion of the debentures due December 28, 2006 (evidencing a portion of
the Indebtedness in the aggregate principal amount of $549,720, and being the
only portion of the indebtedness that has or will mature prior to September
30,2008) to September 30, 2008; and (e) for the Company’s cash deposits, to
enter into a Deposit Account Control Agreement with a bank that, upon the
earlier of a new default under the Loan Documents or September 30, 2008, gives
YA Global exclusive and immediate control over the Company’s cash deposits in
such account.





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





None.





ITEM
5. Other Information.





None.




22





ITEM
6. Exhibits.




Exhibit
              Number
            
            Description3.1
            
            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).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)




23




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 Biodiesel Solutions, Inc.,
      Renewal Fuels, Inc. and Cornell Capital Partners L.P.
  (3)10.25
            
            Promissory
      Note issued to Phoenix Investors, LLC by Renewal Fuels, Inc., dated
      December 13, 2007. (4)10.26
            
            Promissory
      Note issued to John King by Renewal Fuels, Inc., dated December 13, 2007.
      (4)10.27
            
            Promissory
      Note issued to Rudolph A. Wiedemann by Renewal Fuels, Inc., dated December
      13, 2007. (4)10.28
            
            Amendment
      to Securities Purchase Agreement, December 31, 2007, by and between
      Renewal Fuels, Inc. and YA Global Investments, L.P.
    (4)10.29
            
            $300,000
      principal amount Secured Convertible Debenture, dated December 31, 2007,
      by and between Renewal Fuels, Inc. and YA Global Investments, L.P.
      (4)10.30
            
            Loan
      and Security Agreement, April 28, 2008, by and between Renewal
      Plantations, Inc. and Phoenix Investors, LLC. with Form of Term Note
      attached as Exhibit A. (5)10.31
            
            Warrant
      to purchase 20,000,000 shares of Common Stock of Renewal Fuels, Inc. dated
      April 21, 2008. (5)10.32
            
            Forbearance
      Agreement, April 28, 2008, by and among Renewal Fuels, Inc., Montgomery
      Equity Partners, Ltd. and YA Global Investments, L.P.
      (6)10.33
            
            Form
      of Deposit Account Control Agreement, by and among Renewal Fuels, Inc., YA
      Global Investments, and the bank maintaining the deposit account.
      (6)




24




31.1
            
            Certification
      by Chief Executive Officer and 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 and 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


(4)  Incorporated
by reference to Form 8-K filed on January 17, 2008




(5)  Incorporated
by reference to Form 8-K filed on April 21, 2008




(6)  Incorporated
by reference to Form 8-K filed on May 7, 2008








25




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.




RENEWAL
      FUELS, INC.Dated: November
      14, 2008
              By:
              /s/
      Bryan ChanceBryan
      ChanceChief
      Executive Officer and Chief Financial Officer
                (Principal
      Financial and Accounting Officer)











26