**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-QSB/A**





(Mark
      One)




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





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 x No o





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


Yes o No x





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 28,832,455 shares of common stock, $0.001
      par
      value per share, as of November 16, 2007.





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










**Explanatory
      Notes**





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





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





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





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




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





-2-




**RENEWAL
      FUELS, INC.**





**FORM
      10-QSB/A**





**QUARTERLY
      PERIOD ENDED SEPTEMBER 30, 2007**





**TABLE
      OF CONTENTS**





PART
                1  FINANCIAL INFORMATIONItem
                1.
            Financial
                Statements (Unaudited)Consolidated
                Balance Sheet (Restated)
            5Consolidated
                Statements of Operations (Restated)
            6Consolidated
                Statement of Stockholders’ Equity (Deficit) (Restated)
            7Consolidated
                Statements of Cash Flows (Restated)
            9Notes
                to Consolidated Financial Statements
            11Item
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            31Item
                3.
            Controls
                and Procedures
            51PART
                II OTHER INFORMATIONItem
                1.
            Legal
                Proceedings
            52Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            52Item
                3.
            Defaults
                Upon Senior Securities
            52Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            52Item
                5.
            Other
                Information
            52Item
                6.
            Exhibits
            52SIGNATURES
            
            55




-3-





PART
      1.
 FINANCIAL INFORMATION





FORWARD-LOOKING
      STATEMENTS





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





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





-4-




**ITEM
      1. FINANCIAL STATEMENTS**





**RENEWAL
      FUELS, INC.**





**UNAUDITED
      CONSOLIDATED BALANCE SHEET**


**AS
      OF SEPTEMBER 30, 2007**


(Restated)




**ASSETS****Current
                assets:**Cash
            
            $
            540,056Inventories
            
            
            47,282Prepaid
                expenses and other current assets
            
            
            83,016**Total
                current assets**
            
            
            670,354Property
                and equipment - net
            
            
            240,986Finance
                fees, net of accumulated amortization of $73,757
            
            
            376,243Intangibles,
                net of accumulated amortization of $58,707
            
            
            462,293Goodwill
            
            
            323,684**Total
                assets**
            
            $
            2,073,560


**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)****Liabilities****Current
                liabilities:**Accounts
                payable
            
            $
            280,571Other
                payables
            
            
            88,931Convertible
                debt, in default
            
            
            1,099,626**Total
                current liabilities**
            
            
            1,469,128Convertible
                debt
            
            
            1,348,487Convertible
                preferred stock of subsidiary (preference in liquidation -
                $1,000,000)
            
            
            800,000**Total
                liabilities**
            
            
            3,617,615**Commitments
                and contingencies****Stockholders’
                equity (deficit):**Capital
                stock:Preferred
                  stock - par value of $.001; 20,000,000 shares authorized;no shares
                  issued and outstanding
            
            
            —Common
                  stock - par value of $.001; 3,000,000,000 shares authorized;27,488,705
                  shares issued and outstanding
            
            
            27,488Common
                stock - 1,343,750 shares to be issued
            
            
            215,000Additional
                paid-in capital
            
            
            8,376,581Accumulated
                deficit
            
            
            (10,163,124
            )**Total
                stockholders’ equity (deficit)**
            
            
            (1,544,055
            )**Total
                liabilities and stockholders’ equity (deficit)**
            
            $
            2,073,560




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





-5-




**RENEWAL
      FUELS, INC.**




**UNAUDITED
      CONSOLIDATED STATEMENTS OF OPERATIONS**





Successor
                Business
            
            Predecessor
                BusinessThree
              Months
              Ended
              September
              30,
                2007 (Restated)
            
            March 9,
              2007(Dateof Inception)
              to
                September
              30,
                2007 (Restated)
            
            Three
              Months
              Ended
              March
                31,
              2007
            
            Three
              Months
              Ended
              September
              30,
                2006
            
            Nine
              Months
              Ended
              September
              30,
                2006**Sales**
            
            $
            148,800
            
            $
            392,887
            
            $
            104,360
            
            $
            571,386
            
            $
            1,638,813Cost
                of sales
            
            
            109,048
            
            
            251,390
            
            
            76,802
            
            
            350,804
            
            
            1,034,220**Gross
                profit**
            
            
            39,752
            
            
            141,497
            
            
            27,558
            
            
            220,582
            
            
            604,593**Operating
                expenses:**Employee
                compensation and benefits
            
            
            243,101
            
            
            277,373
            
            
            52,320
            
            
            65,405
            
            
            197,103Stock-based
                transaction expense
            
            
            -
            
            
            5,131,231
            
            
            -
            
            
            -
            
            
            -Occupancy
                and equipment
            
            
            71,045
            
            
            79,302
            
            
            18,666
            
            
            24,705
            
            
            98,481Advertising
            
            
            96,187
            
            
            140,170
            
            
            8,474
            
            
            37,452
            
            
            55,542Research
                and development
            
            
            3,140,000
            
            
            3,140,000
            
            
            -
            
            
            -
            
            
            -Professional
                fees
            
            
            80,150
            
            
            429,891
            
            
            8,474
            
            
            6,588
            
            
            18,617Other
                general and administrative
            
            
            217,665
            
            
            315,209
            
            
            19,085
            
            
            34,918
            
            
            119,299Amortization
                of intangible assets
            
            
            45,268
            
            
            58,707
            
            
            -
            
            
            -
            
            
            -Total
                operating expenses
            
            
            3,893,416
            
            
            9,571,883
            
            
            107,019
            
            
            169,068
            
            
            489,042**Operating
                income (loss)**
            
            
            (3,853,664
            )
            
            (9,430,386
            )
            
            (79,461
            )
            
            51,514
            
            
            115,551Interest
                income
            
            
            68
            
            
            823
            
            
            -
            
            
            -
            
            
            -Interest
                expense
            
            
            (221,050
            )
            
            (636,477
            )
            
            -
            
            
            -
            
            
            -Financing
                fees
            
            
            (55,750
            )
            
            (73,757
            )
            
            -
            
            
            -
            
            
            -Other
                expense
            
            
            (23,326
            )
            
            (23,326
            )
            
            -
            
            
            -
            
            
            -Net
                income (loss)
            
            $
            (4,153,722
            )
            $
            (10,163,124
            )
            $
            (79,461
            )
            $
            51,514
            
            $
            115,551Net
                income (loss) per share:Basic
            
            $
            (0.16
            )
            $
            (0.41
            )
            $
            (0.01
            )
            $
            0.01
            
            $
            0.02Diluted
            
            $
            (0.16
            )
            $
            (0.41
            )
            $
            (0.01
            )
            $
            0.01
            
            $
            0.02Weighted
                average shares outstanding:Basic
            
            
            26,228,929
            
            
            24,795,793
            
            
            7,000,000
            
            
            7,000,000
            
            
            7,000,000Diluted
            
            
            26,228,929
            
            
            24,795,793
            
            
            7,000,000
            
            
            7,000,000
            
            
            7,000,000





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




-6-





**RENEWAL
      FUELS, INC.**




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


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


(Restated)


Preferred
                  Stock
              
              Common Stock
              
              Common
                  Stock to be
              
              Additional
                  Paid-In
              
              AccumulatedShares
              
              Amount
              
              Shares
              
              Amount
              
              Issued
              
              Capital
              
              Deficit
              
              Total**Balances,
                  March 9, 2007 (Inception)**
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Common
                  stock sold on March 9, 2007 to founders for cash
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              57,279
              
              
              -
              
              
              57,279Assumption
                  of net liabilities
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,677,020
              )
              
              -
              
              
              (1,677,020
              )Stock-based
                  transaction expense related to common stock sold to founders
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              5,131,231
              
              
              -
              
              
              5,131,231Common
                  stock issued in exchange for net liabilities in a recapitalization
                  on
                  April 20, 2007
              
              
              -
              
              
              -
              
              
              673,356
              
              
              673
              
              
              -
              
              
              (673
              )
              
              -
              
              
              -Preferred
                  stock issued in reverse merger on April 20, 2007
              
              
              343,610
              
              
              343
              
              
              -
              
              
              -
              
              
              -
              
              
              (343
              )
              
              -
              
              
              -Common
                  stock warrants issued on April 20, 2007 in connection with issuance
                  of
                  convertible debentures
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              238,932
              
              
              -
              
              
              238,932Beneficial
                  conversion feature of convertible debt instruments issued or assumed
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              923,841
              
              
              -
              
              
              923,841Conversion
                  of preferred stock to common stock on June 21, 2007
              
              
              (343,610
              )
              
              (343
              )
              
              22,907,323
              
              
              22,907
              
              
              -
              
              
              (22,564
              )
              
              -
              
              
              -Common
                  stock issued on conversion of convertible debentures
              
              
              -
              
              
              -
              
              
              224,447
              
              
              225
              
              
              -
              
              
              82,675
              
              
              -
              
              
              82,900Common
                  stock issued for purchase of BSI on July 2, 2007
              
              
              -
              
              
              -
              
              
              3,333,333
              
              
              3,333
              
              
              -
              
              
              1,996,667
              
              
              -
              
              
              2,000,000Fair
                  value of options granted in conjunction with the purchase of BSI
                  on July
                  2, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              48,181
              
              
              -
              
              
              48,181Common
                  stock warrants issued on July 2, 2007 in connection with issuance
                  of
                  convertible debentures
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,104,405
              
              
              -
              
              
              1,104,405Beneficial
                  conversion feature of convertible debentures issued on July 2,
                  2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              348,287
              
              
              -
              
              
              348,287


(*continued)*




-7-




**RENEWAL
      FUELS, INC.**




**UNAUDITED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY**


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


(Restated)


(*continued)*




Shares
                issued on conversion of convertible debentures on July 12 and July
                13,
                2007
            
            
            -
            
            
            -
            
            
            350,360
            
            
            350
            
            
            -
            
            
            145,750
            
            
            -
            
            
            146,100Cash
                paid in lieu of fractional shares from the 1-for-15 reverse stock
                split on
                July 31, 2007
            
            
            -
            
            
            -
            
            
            (114
            )
            
            -
            
            
            -
            
            
            (68
            )
            
            -
            
            
            (68
            )Common
                stock issued on October 5, 2007 for conversion of convertible debentures
                on September 21, 2007 - 1,343,750 shares
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            215,000
            
            
            -
            
            
            -
            
            
            215,000Net
                loss for the period
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (10,163,124
            )
            
            (10,163,124
            )**Balances,
                September 30, 2007**
            
            
            -
            
            $
            -
            
            
            27,488,705
            
            $
            27,488
            
            $
            215,000
            
            $
            8,376,581
            
            $
            (10,163,124
            )
            $
            (1,544,055
            )




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





-8-





**RENEWAL
      FUELS, INC.**





**UNAUDITED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**





Successor
                Business
            
            Predecessor
                BusinessMarch
                9, 2007
              (Date
                of
              Inception)
                to
              September 30,
              2007 (Restated)
            
            Three
              Months
              Ended
              March 31, 2007
            
            Nine
              Months
              Ended
              September
                30,
              2006**Cash
                Flows From Operating Activities:**Net
                income (loss)
            
            $
            (10,163,124
            )
            $
            (79,461
            )
            $
            115,551Adjustments
                to reconcile net income (loss) to net cash
              provided
                by (used in) operating activities:Depreciation
                and amortization
            
            
            68,599
            
            
            471
            
            
            16,344Amortization
                financing fees
            
            
            73,757
            
            
            -
            
            
            -Accrued
                interest and amortization of debt discounts
            
            
            634,550
            
            
            -
            
            
            -Stock-based
                transaction expense
            
            
            5,131,231
            
            
            -
            
            
            -Research
                and development expense
            
            
            3,140,000
            
            
            -
            
            
            -Write
                off of acquired fixed assets
            
            
            22,931
            
            
            -
            
            
            -Changes
                in operating assets and liabilities, net:Accounts
                receivable
            
            
            -
            
            
            -
            
            
            11,198Inventories
            
            
            (12,856
            )
            
            26,151
            
            
            26,320Other
                current assets
            
            
            (83,016
            )
            
            11,915
            
            
            (1,252
            )Accounts
                payable and accrued expenses
            
            
            (316,707
            )
            
            (5,857
            )
            
            154,124Customer
                deposits
            
            
            -
            
            
            (12,224
            )
            
            (31,488
            )**Net
                Cash Provided By (Used In) Operating Activities**
            
            
            (1,504,634
            )
            
            (59,005
            )
            
            290,797**Cash
                Flows From Investing Activities:**Acquisition
                of FuelMeister assets
            
            
            (494,426
            )
            
            -
            
            
            -Acquisition
                of Biodiesel Solutions
            
            
            (422,014
            )
            
            -
            
            
            -Purchases
                of property and equipment
            
            
            (46,081
            )
            
            -
            
            
            (28,623
            )**Net
                Cash Provided By (Used In) Investing Activities**
            
            
            (962,521
            )
            
            -
            
            
            (28,623
            )**Cash
                Flows From Financing Activities:**Proceeds
                from issuance of common stock
            
            
            57,279
            
            
            -
            
            
            -Proceeds
                from issuance of warrants
            
            
            1,343,337
            
            
            -
            
            
            -Proceeds
                from issuance of beneficial conversion feature
            
            
            938,554Proceeds
                from issuance of long-term debt
            
            
            1,118,109
            
            
            -
            
            
            -Payment
                of debt issuance costs
            
            
            (450,000
            )
            
            -
            
            
            -Payment
                for fractional shares
            
            
            (68
            )
            
            -
            
            
            -Net
                contributions (distributions) from (to) owner
            
            
            -
            
            
            31,953
            
            
            (348,584
            )**Net
                Cash Provided By (Used In) Financing Activities**
            
            
            3,007,211
            
            
            31,953
            
            
            (348,584
            )




-9-





**RENEWAL
      FUELS, INC.**




**UNAUDITED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


*(-continued)*




Successor
              Business
            
            Predecessor
                Business**Net
                Increase (Decrease) In Cash**
            
            
            540,056
            
            
            (27,052
            )
            
            (86,410
            )Cash
                - Beginning of period
            
            
            -
            
            
            52,626
            
            
            276,850Cash
                - End of period
            
            $
            540,056
            
            $
            25,574
            
            $
            190,440**Supplemental
                Disclosure Of Cash Flow Information -**Interest
                paid
            
            $
            1,927
            
            $
            -
            
            $
            -Income
                taxes paid
            
            $
            -
            
            $
            -
            
            $
            -**Supplemental
                Disclosures Of Non-Cash Investing And****Financing
                Activities:**Net
                liabilities assumed in a recapitalization
            
            $
            1,677,020
            
            $
            -
            
            $
            -




**See
        accompanying notes to consolidated financial statements.**
  -10-








**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(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.





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





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.




**Acquisition
      of FuelMeister Business**





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





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





-11-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**Acquisition
      of BSI**





On
      July
      2, 2007, the Company and its wholly-owned subsidiary BSI Acquisitions, Inc.
      (“BSI Acquisitions”) entered into a merger agreement (the “BSI Merger
      Agreement”) with BSI (from whom Renewal Biodiesel had acquired the FuelMeister
      Business). Pursuant to the BSI Merger Agreement, BSI Acquisitions was merged
      with and into BSI and the Company thus acquired all of the remaining business
      of
      BSI, other than the FuelMeister Business which was previously acquired as a
      result of the reverse merger with Renewal Biodiesel. The former shareholders
      of
      BSI were issued an aggregate of 3,333,333 shares of common stock of the Company,
      1,333,333 shares of a new BSI convertible preferred stock (the “BSI Preferred
      Stock”), options to purchase 94,600 shares of the Company’s common stock and
      $500,000 in cash. The BSI Preferred Stock is immediately convertible at the
      option of the holders into common stock of the Company at a conversion price
      equal to the greater of (i) $0.75 or (ii) the average closing price of the
      common stock during the ten trading days immediately preceding the conversion
      date. Prior to the acquisition of BSI, the Company had loaned $200,000 to BSI
      under an 8% 180 day secured promissory note, due November 24, 2007. Upon the
      acquisition of BSI, the note receivable was reclassified as a capital
      contribution to BSI.





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





**Predecessor
      Business**





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





**Going
      Concern**





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





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





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




-12-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**NOTE
      2**  **ACQUISITIONS**





**Reverse
      Merger and Recapitalization**





On
      April
      20, 2007, we entered into a Merger Agreement with Renewal Biodiesel, a Delaware
      corporation formed in 2007 for the purposes of the asset acquisition 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. (f/k/a Cornell Capital Partners L.P) (herein “YA Global”) and
      were assumed in connection with the provision of additional long-term debt
      financing provided by YA Global (see Note 7), which additional funding was
      provided simultaneously with the reverse merger and recapitalization. In
      addition, the Company paid $180,000 in fees in connection with the additional
      debt funding provided by YA Global.




**Acquisition
      of Assets of FuelMeister Business**





On
      March
      9, 2007, Crivello Group, LLC (“Crivello”) and its wholly-owned subsidiary,
      Renewal Biodiesel, entered into an Asset Purchase Agreement with Biodiesel
      Solutions, Inc. (“BSI”), which was effective March 30, 2007. Pursuant to the
      Asset Purchase Agreement, BSI sold substantially all of the assets and property
      of its FuelMeister operations (the “FuelMeister Business”, the “Predecessor” or
      the “Predecessor Business”, an unrelated Company) to Renewal Biodiesel, in
      exchange for an aggregate purchase price of $500,000, subject to adjustment.
      Under the terms of the Agreement, the purchase price was subsequently adjusted
      to $494,426 to reflect the inventory on hand at closing. Of the adjusted
      purchase price, $100,000 was paid on execution of the Agreement as a down
      payment, $100,000 was paid at closing, $50,000 was paid on April 11, 2007,
      and
      the balance of the purchase price was paid by delivery of a promissory note,
      as
      amended, in the amount of $244,426. The promissory note was subsequently paid
      on
      April 20, 2007. The $250,000 cash portion of the $494,426 purchase price of
      the
      assets was funded by loans received from Crivello of $200,000 and cash of
      $57,279 received by Renewal Biodiesel from our founders for common stock. The
      loans from Crivello, together with the promissory note for $244,426, were repaid
      from the proceeds of loans from YA Global (see Note 7). The difference of
      $5,131,231 between the fair value of the 22,907,323 common shares issued to
      our
      founders as a result of the reverse merger described above, determined based
      on
      the trading price of $0.2265 per share immediately prior to the reorganization
      and reverse merger, and the amount they paid for their shares of Renewal
      Biodiesel of $57,279 has been recorded as stock-based transaction
      expense.





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





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




-13-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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
            
            
            50,150Trade
                name
            
            
            118,000Customer
                lists, engineering drawings and other intangibles
            
            
            189,000Goodwill
            
            
            93,705Net
                assets acquired
            
            $
            494,426




**Acquisition
      of BSI**





On
      July
      2, 2007, we entered into a merger agreement with BSI, as a result of which
      we
      acquired the remainder of BSI's business (i.e., other than the FuelMeister
      Business acquired previously). BSI is engaged in the business of designing,
      manufacturing and marketing processing equipment and accessories, including
      personal biodiesel processors and “community scale” biodiesel processor systems,
      which convert fresh and used vegetable oils into clean burning biodiesel fuel.
      It complements and optimizes Renewal’s ability to design, develop, manufacture
      and market both personal and community scale biodiesel processing equipment
      and
      accessories.





As
      consideration for the acquisition of BSI, we issued an aggregate of 3,333,333
      shares of common stock, 1,000,000 new preferred shares of BSI convertible into
      1,333,333 shares of our common stock, options to purchase 94,600 shares of
      our
      common stock and $500,000 in cash. The BSI Preferred Stock is immediately
      convertible at the option of the holders into common stock of the Company at
      a
      conversion price equal to the greater of (i) $0.75, or (ii) the average closing
      price of the common stock during the ten trading days immediately preceding
      the
      conversion date. Prior to the acquisition of BSI, the Company loaned $200,000
      to
      BSI under an 8% 180 day secured promissory note, due November 24, 2007. Upon
      the
      acquisition of BSI, the note receivable was reclassified as a capital
      contribution to BSI.





Also
      on
      July 2, 2007, we entered into a Securities Purchase Agreement with YA Global
      providing for the sale to YA Global of secured convertible debentures in the
      aggregate principal amount of $2,700,000, of which $2,000,000 was advanced
      immediately. The second installment of $700,000 will be funded within two
      business days after the Company has unconditionally booked and received at
      least
      a 50% deposit for the sale of at least one BiodieselMaster® unit. We also issued
      to YA Global five-year warrants to purchase 2,250,000 shares of our common
      stock
      at $0.90 per share. The Debentures bear interest at the prime rate plus 2.75%
      (but not less than 10%) and mature two years from the date of issuance (the
      "Maturity Date"). The Company is not required to make any payments until the
      Maturity Date. The holder of the Debentures may convert at any time amounts
      outstanding into shares of Common Stock at a conversion price per share equal
      to
      the lesser of (i) $0.05, or (ii) 80% of the lowest closing bid price of the
      Common Stock during the ten trading days immediately preceding the conversion
      date.





The
      aggregate purchase price for the BSI Acquisition was determined based on the
      fair value of the consideration issued, which consisted of common stock,
      preferred shares of BSI convertible into our common stock, options to purchase
      our common stock and cash, as follows:





3,333,333
                shares of common stock
            
            $
            2,000,0001,000,000
                shares of preferred stock of BSI
            
            
            800,00096,400
                common stock options
            
            
            48,181Note
                receivable from BSI reclassified to contributed capital
            
            
            200,000Cash
                paid, net of $77,986 cash acquired
            
            
            422,014Total
                purchase price
            
            $
            3,470,195





-14-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





The
      purchase price was allocated to BSI’s net tangible and intangible assets based
      on their estimated fair values as of the date of the completion of the
      acquisition. The amount allocated to purchased “in process research and
      development costs” was valued at fair value using a debt free cash flow method.
      As required by current accounting literature, these costs are immediately
      expensed in the current period’s income statement. The allocation of the total
      purchase price is summarized below:





Purchase
                Price
            
            Asset LifeAllocation
            
            In
                YearsWorking
                capital, net and excluding cash acquired
            
            $
            (204,231
            )
            
            -Fixed
                assets
            
            
            90,447
            
            
            3
                -
                10In
                process research and development
            
            
            3,140,000
            
            
            -Employee
                contracts
            
            
            114,000
            
            
            2Non-compete
                agreements
            
            
            100,000
            
            
            1.5Goodwill
            
            
            229,979
            
            
            IndefiniteNet
                Assets Acquired
            
            $
            3,470,195




**Purchase
      Accounting For Acquisitions**





The
      results of operations of the 2007 Acquisitions are included in the Company's
      results of operations beginning from their respective acquisition dates. The
      following unaudited pro forma information combines the consolidated results
      of
      operations of the Company and the companies that it acquired as if the
      acquisitions had occurred at the beginning of fiscal year 2006:




Three Months
              Ended September, 30,
            
            For The Nine Months Ended
              September 30,2007
            
            2006
            
            2007
            
            2006Revenues
            
            $
            148,800
            
            $
            459,539
            
            $
            500,292
            
            $
            1,378,617Loss
                from Operations
            
            $
            (615,896
            )
            $
            (178,488
            )
            $
            (1,452,114
            )
            $
            (8,794,637
            )Net
                Loss
            
            $
            (1,216,899
            )
            $
            (743,966
            )
            $
            (3,389,752
            )
            $
            (10,491,193
            )Per
                Share - basic and fully diluted
            
            $
            (0.04
            )
            $
            (0.12
            )
            $
            (0.07
            )
            $
            (0.38
            )Weighted
                average shares outstanding
            
            
            27,488,705
            
            
            27,488,705
            
            
            27,488,705
            
            
            27,488,705




The
      unaudited pro forma information does not purport to be indicative of the results
      that would actually have been achieved had the acquisitions occurred as of
      the
      date of the periods indicated.




**NOTE
      3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Basis
      of Presentation**





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





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





-15-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**Accounting
      Policies**





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





**Principles
      of Consolidation**





*Successor*





The
      consolidated financial statements include the accounts of Renewal Fuels, Inc.
      (“Renewal”) from April 20, 2007, the date of the reverse merger between Renewal
      and its wholly owned subsidiary Renewal Biodiesel, Inc. (“Renewal Biodiesel”),
      the accounts of Renewal Biodiesel from March 9, 2007, the date that Renewal
      Biodiesel was incorporated and the accounts of Biodiesel Solutions, Inc. (“BSI”)
      from July 2, 2007, the date of its acquisition. All inter-company accounts
      and
      transactions have been eliminated in consolidation.





*Predecessor*





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





**Use
      of Estimates**





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





**Revenue
      Recognition**





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





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





**Product
      Warranties**





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




-16-


**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**Allowance
      for Doubtful Accounts**





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





**Cash
      and Cash Equivalents**





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




**Inventories**





Inventories
      are stated at the lower of cost or market with cost determined using a first-in,
      first-out basis. At September 30, 2007, inventories consisted of inventory
      and
      displays amounting to $45,749 and $1,533, respectively.





**Inventory
      Obsolescence**





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





**Property
      and Equipment**





Property
      and equipment are stated at cost. Major additions are capitalized, while minor
      additions and maintenance and repairs, which do not extend the useful life
      of an
      asset, are expensed as incurred. Depreciation and amortization are provided
      using the straight-line method over the estimated useful lives of the respective
      assets, which range from 3 to 10 years.





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





**Intangible
      Assets**





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





**Stock-Based
      Compensation**





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





**Derivative
      Instruments and Beneficial Conversion Features**





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




-17-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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.





**Registration
      Payment Arrangements**





Certain
      instruments, including convertible debt and equity instruments and the
      freestanding options and warrants issued in connection with those convertible
      instruments, are subject to registration rights agreements, which impose
      penalties for our failure to register the underlying common stock by a defined
      date. These potential cash penalties, which are referred to as registration
      payment arrangements, are recorded when payments are both probable and
      reasonably estimable, in accordance with FAS No. 5, *Accounting
      for Contingencies.* As
      of
      September 30, 2007 we are in default of certain registration rights agreements
      and the investors had certain rights to demand payments. However, the investors
      have not demanded payment, nor have they indicated that they will demand
      payment. After consultation with investors and other actions we considered
      necessary, we have concluded that the probability of payment has not risen
      to a
      level that would require an accrual. Further, on November 13, 2007, we obtained
      an agreement with the investors wherein they explicitly waived their rights
      to
      any payments that they may otherwise be entitled to as of that date. Such rights
      were not waived as to periods subsequent to November 13, 2007 and, accordingly,
      we will continue to evaluate the need to accrue payments in future periods
      until
      all of our obligations under the registration rights agreements have been
      fulfilled. (See Note 7-Long Term Debt for additional information.)





**Research
      and Development Costs**





Research
      and development costs related to product development are expensed as incurred.
      The only such costs incurred during the periods covered by these financial
      statements were the purchased “in process research & development costs”
incurred in the acquisition of BSI in the amount of $3,140,000 as discussed
      in
      Note 2.





**Advertising
      Costs**





Advertising
      costs are expensed as incurred. For the three months ended September 30, 2007
      and the period from March 9, 2007 (date of inception) to September 30, 2007,
      advertising costs were $96,188 and $140,171, respectively.




-18-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**Shipping
      and Handling Costs**





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





**Net
      Income (Loss) Per Share**





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





**Income
      Taxes**





*Successor*





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





*Predecessor*





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





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




-19-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**Impact
      of Recently Issued Accounting Pronouncements**





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





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




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





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





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





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




-20-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**NOTE
      5 PROPERTY AND EQUIPMENT**





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





Computer
                equipment and software
            
            $
            39,929Production
                and shop equipment
            
            
            64,061Vehicles
            
            
            3,303Tenant
                Improvements
            
            
            12,810Greenhouses
                and improvements
            
            
            64,247Office
                furniture and equipment
            
            
            15,878Website
                domain
            
            
            50,150250,378Less
                accumulated depreciation and amortization
            
            
            9,392Property
                and equipment - net
            
            $
            240,986





Depreciation
      expense of $8,163 and $9,392, respectively, for the three month period ended
      September 30, 2007 and for the period from March 9, 2007 (Inception) to
      September 30 2007, respectively, is included in other operating expenses in
      the
      accompanying consolidated statements of operations.





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





The
      following table summarizes amortized and unamortized intangible
      assets:





As of September 30, 2007Gross Carrying
              Amount
            
            Accumulated
              Amortization
            
            Net Carrying
              AmountAmortized
                Intangible Assets:Customer
                lists
            
            $
            70,000
            
            $
            2,333
            
            $
            67,667Engineering
                drawings
            
            
            70,000
            
            
            7,000
            
            
            63,000Non-compete
                agreement
            
            
            146,000
            
            
            27,938
            
            
            118,062Trade
                name
            
            
            118,000
            
            
            5,900
            
            
            112,100Patent
                application
            
            
            3,000
            
            
            1,500
            
            
            1,500Employment
                agreements
            
            
            114,000
            
            
            14,036
            
            
            99,964$
            521,000
            
            $
            58,707
            
            $
            462,293Unamortized
                Intangible Assets:Goodwill
            
            $
            323,684Aggregate
                Amortization Expense:Quarter
                ended September 30, 2007
            
            $
            58,707Estimated
                Amortization Expense:Quarter
                ending December 31, 2007
            
            
            
            
            
            
            
            $
            44,918Year
                ending December 31, 2008
            
            
            
            
            
            
            
            
            177,975Year
                ending December 31, 2009
            
            
            
            
            
            
            
            
            64,834Year
                ending December 31, 2010
            
            
            
            
            
            
            
            
            30,467Year
                ending December 31, 2011
            
            
            
            
            
            
            
            
            30,467Year
                ending December 31, 2012
            
            
            
            
            
            
            
            
            19,967Thereafter
            
            
            
            
            
            
            
            
            93,665$
            462,293




-21-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





Amortized
      intangible assets acquired during the period ended September 30, 2007 have
      a
      weighted-average amortization period of 4.0 years.





**NOTE
      7**  **LONG-TERM
      DEBT**


At
        September 30, 2007, long-term debt consists of the following:
  New
                  Obligations:YA
                  Global Investments, L.P., $1,000,000 convertible debenture, due
                  April 20,
                  2009, including interest at prime + 2.75% (11% at September 30,
                  2007)
              
              $
              1,048,945Less
                  unamortized discount from warrants and beneficial conversion
                  feature
              
              
              (372,825
              )676,120YA
                  Global Investments, L.P.,, $400,000 convertible debenture, due
                  May 31,
                  2009, including interest at prime + 2.75% (11% at September 30,
                  2007)
              
              
              414,515Less
                  unamortized discount from beneficial conversion feature
              
              
              (400,000
              )14,515YA
                  Global Investments, L.P., $2,000,000 convertible debenture, due
                  July 2,
                  2009, including interest at prime + 2.75% (11% at September 30,
                  2007)
              
              
              2,053,890Less
                  unamortized discount from warrants and beneficial conversion
                  feature
              
              
              (1,396,038
              )657,852Prior
                  Obligations (in default):Montgomery
                  Equity Partners, Ltd., $322,220 15% convertible debenture, due
                  on demand,
                  including accrued interest of $140,722
              
              
              462,942Montgomery
                  Equity Partners, Ltd., $300,000 15% convertible debenture, due
                  on demand,
                  including accrued interest of $79,027
              
              
              379,027LH
                  Financial, $156,080 18% convertible promissory note, due on demand,
                  including accrued interest of $101,577
              
              
              257,6572,448,113Less:
                  prior obligations in default classified as current
              
              
              1,099,626Long-term
                  debt
              
              $
              1,348,487


**New
      Obligations**





On
      April
      20, 2007, the Company entered into a Securities Purchase Agreement (the
      "Purchase Agreement") with YA Global providing for the sale by the Company
      to YA
      Global of its secured convertible debentures in the aggregate principal amount
      of $1,400,000 (the "New Debentures") of which $1,000,000 was advanced
      immediately. The second 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.




-22-


**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**




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





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





Under
      the
      Purchase Agreement, the Company 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.





In
      connection with the Purchase Agreement, the Company 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, the Company is obligated to file a Registration
      Statement within 45 days of such demand and to use its best efforts to cause
      the
      Registration Statement to be declared effective no later than 150 days following
      receipt of such demand. The Company is also required to ensure that the
      Registration Statement remains in effect until all of the shares of common
      stock
      issuable upon conversion of the New Debentures and exercise of the warrants
      have
      been sold or may be sold without volume restrictions pursuant to Rule 144(k)
      promulgated by the SEC. In the event of a default of its obligations under
      the
      Registration Rights Agreement, including its agreement with respect to the
      filing and effectiveness dates for the Registration Statement, the Company
      is
      required to pay to 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%. As of November 14, 2007, no demand for registration has been
      received by the Company.




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





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




-23-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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





Under
      the
      Additional Purchase Agreement, the Company 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.





**Prior
      Obligations (in default)**





On
      April
      20, 2007, as part of the net liabilities assumed on the reverse merger, the
      Company assumed certain existing obligations to 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 and, accordingly,
      are in default for non-payment of principal and interest. In connection with
      one
      of these Old Debentures, the Company previously issued warrants to purchase
      6,667 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.





In
      connection with these Old Debentures, the Company was obligated to file a
      Registration Statement with the SEC, registering the shares issuable on
      conversion of the Old Debentures and the Old Warrants. The Company did not
      file
      the required registration statement (which was required to be filed by March
      27,
      2006 and effective by May 26, 2006). As a result, under the terms of the Old
      Debentures, the Company was required to pay to 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. However, recognition of damages is subject to
      consideration of both the probability of incurring damages and whether amounts
      are estimable. Based upon direct dialog, and as further discussed in the next
      paragraph, the Company did not record damages in any of the periods
      presented.





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





The
      Company also assumed the remaining portions of a convertible promissory note
      that was originally issued in 2000. A portion of the note is held by 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. During
      the
      period April 21, 2007 to September 30, 2007, YA Global converted their entire
      principal amount of $168,000 plus all accrued interest thereon of $61,000 into
      574,807 common shares.




On
      September 21, 2007, YA Global converted $215,000 of the $537,220 principal
      amount of the Old Debentures held by it into 1,343,750 shares of common stock
      at
      $0.16 per share (the lesser of $0.60 or 80% of the lowest closing bid price
      of
      the common stock during the ten trading days immediately preceding the
      conversion date, which was $0.20). These shares were issued by the transfer
      agent on October 5, 2007. As of November 14, 2007, there have been no
      conversions of convertible debentures subsequent to September 30,
      2007.




-24-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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





**Derivative
      Instrument Liabilities and Beneficial Conversion Feature**





In
      accounting for the Convertible Debentures and the associated Warrants, the
      Company has considered the requirements of EITF Issue 00-19, "Accounting for
      Derivative Financial Instruments Indexed To, and Potentially Settled In, a
      Company's Own Common Stock". Because the number of shares that may be required
      to be issued on conversion of the Convertible Debentures is dependent on the
      price of the Company’s common stock, the number of shares ultimately required is
      indeterminate. However, full conversion of the outstanding Convertible
      Debentures and exercise of outstanding Warrants, together with currently
      outstanding common stock and all other currently existing requirements to issue
      common stock, require the Company to have approximately 52 million common shares
      authorized. The Company is authorized to issue 3 billion common shares. As
      a
      result, management of the Company believes it will have sufficient authorized
      shares available to physically settle all contracts that currently require
      delivery of common shares. Furthermore, management of the Company, together
      with
      investors associated with management, control a majority of the outstanding
      common shares of the Company. Accordingly, management of the Company believes
      it
      is in a position to secure shareholder approval of an increase in the authorized
      number of shares, should such an increase be required in the future. As a result
      of management’s conclusion that it will have sufficient authorized shares
      available to settle all outstanding contracts requiring delivery of common
      shares, the conversion option embedded in the Convertible Debentures has not
      been bifurcated and the Warrants issued in connection with the Convertible
      Debentures have been accounted for as equity instruments.





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





If
      the
      conversion option embedded in the Convertible Debentures has not been
      bifurcated, then if the effective conversion price for a Convertible Debenture
      is less than the market value of the underlying shares at the time the debenture
      is issued (usually as a result of the allocation of part of the proceeds
      received to common stock warrants or other instruments), the Company recognizes
      a beneficial conversion feature in accordance with EITF Issues 98-05 and 00-27.
      The value of the beneficial conversion feature, which is credited to additional
      paid-in capital, reduces the initial carrying amount of the debenture. During
      the period ended June 30, 2007 and the three months ended September 30, 2007,
      the Company recorded beneficial conversion features aggregating $923,841 and
      $348,287, respectively.





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





-25-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





For
      warrants and option-based derivative instruments, the Company estimates fair
      value using the Cox-Ross-Rubinstein binomial valuation model, based on the
      market price of the common stock on the valuation date, an expected dividend
      yield of 0%, a risk-free interest rate based on constant maturity rates
      published by the U.S. Federal Reserve applicable to the remaining term of the
      instruments (which rates ranged from 4.57% to 4.9%), and an expected life equal
      to the remaining term of the instruments. Because of the limited historical
      trading period of our common stock, the expected volatility of our common stock
      over the remaining life of the conversion options and Warrants was estimated
      at
      123%, based on a review of the volatility of entities considered by management
      as most comparable to our business.





**NOTE
      8**  **LEASE
      COMMITMENTS**





Prior
      to
      the acquisition of BSI on July 2, 2007, the Company leased operating space
      and
      other services from BSI and, subsequent to the acquisition, has continued to
      operate from the 30,000 square foot facility leased by BSI. The BSI lease is
      accounted for as an operating lease, expires on October 31, 2008 and requires
      payments of approximately $11,000 per month, plus a share of operating costs
      estimated to be $3,000 per month.





**NOTE
      9**  **STOCKHOLDERS’
      EQUITY**





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





The
      Board
      of Directors is authorized to divide the 20,000,000 shares of Preferred Stock
      into one or more series, and to determine for each such series its designation,
      the number of shares of such series, the powers, preferences and rights and
      the
      qualifications, limitations or restrictions for the shares of such
      series.





**Common
      Stock**





Holders
      of the Company’s common stock are entitled to one vote for each share on all
      matters submitted to a stockholder vote. Holders of common stock do not have
      cumulative voting rights. Therefore, holders of a majority of the shares of
      common stock voting for the election of directors can elect all of the
      directors. Holders of the Company’s common stock representing a majority of the
      voting power of the Company’s capital stock issued, outstanding and entitled to
      vote, represented in person or by proxy, are necessary to constitute a quorum
      at
      any meeting of stockholders. A vote by the holders of a majority of the
      Company’s outstanding shares is required to effectuate certain fundamental
      corporate changes such as liquidation, merger or an amendment to the Company’s
      articles of incorporation. Additionally, holders of the Company’s common
      stock are entitled to share in all dividends that the Board of Directors, in
      its
      discretion, declares from legally available funds. In the event of liquidation,
      dissolution or winding up, each outstanding share entitles its holder to
      participate pro rata in all assets that remain after payment of liabilities
      and
      after providing for each class of stock, if any, having preference over the
      common stock. The Company’s common stock has no pre-emptive rights, no
      conversion rights and there are no redemption provisions applicable to the
      Company’s common stock.





On
      March
      09, 2007, immediately prior to the reorganization, which was accounted for
      as a
      reverse merger and recapitalization, Renewal Biodiesel issued shares of its
      common stock to 23 accredited investors for an aggregate consideration of
      $57,279. Additionally, 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 non-cash expense of $5,131,231.





On
      April
      20, 2007, free standing warrants, with a fair value of $238,932 were issued
      in
      conjunction with a convertible debenture as discussed in Note 7. Additionally,
      the beneficial conversion feature for this convertible debenture in the amount
      of $238,932 and prior obligations in the amount of $923,841 were
      recorded.





During
      May and June, 2006, $82,900 of the Company’s convertible debentures were
      converted into 224,447 shares at a per share price ranging between $0.192 and
      $0.501, calculated at the average five lowest bid prices in the twenty two
      days
      preceding the notice of conversion.





-26-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





On
      June
      21, 2007 all of the holders converted 343,610 shares of Series A Convertible
      Preferred Stock into 22,907,323 shares of the Company’s common
      stock.





On
      July
      2, 2007, in conjunction with the acquisition of BSI, 3,333,333 shares of the
      Company’s common stock , with a fair value of $0.60, were issued as discussed in
      Note 2. Additionally, 96,400 Common Stock options, not part of the Company’s
      employee stock option plan, were granted to BSI employees in connection with
      the
      acquisition. These options were valued at $48,181, using the Cox-Ross-Rubinstein
      binomial model, based on an expected term of 3 years, an estimated volatility
      of
      123% and a risk-free rate of 4.90%





On
      July
      2, 2007, freestanding warrants, with a fair value of $1,104,405 were issued
      in
      conjunction with a convertible debenture as discussed in Note 7. Additionally,
      the beneficial conversion feature for this convertible debenture in the amount
      of $348,287 was recorded.





On
      July
      12 and July 13, 2007, $146,100 of the Company’s convertible debentures were
      converted into 350,360 shares at a per share price of $0.417, calculated at
      the
      average five lowest bid prices in the twenty two days preceding the notice
      of
      conversion.





On
      July
      31, 2007, in conjunction with the 1-for-15 reverse stock split, $68 was paid
      out
      in lieu of 114 fractional shares.





On
      September 21, 2007, $215,000 of the Company’s convertible debentures were
      converted into 1,343,750 shares at a per share price of $0.16 (calculated at
      the
      lower of $0.60 or 80% of the lowest bid price of the common stock during the
      ten
      trading days immediately preceding the conversion date, which was $0.20). The
      conversion was completed by the transfer agent on October 5, 2007.





**Preferred
      Stock**





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




The
      Board
      of Directors previously designated 343,610 shares as Series A Convertible
      Preferred Stock. These shares were issued in exchange for the acquisition of
      Renewal Biodiesel, as described in Notes 1 and 2 and were subsequently converted
      into shares of the Company’s Common Stock on June 21, 2007.





On
      July
      2, 2007, in conjunction with the acquisition of BSI, the former shareholders
      of
      BSI were issued an aggregate of 1,000,000 shares of a new BSI Series B
      convertible preferred stock (the “BSI Preferred Stock”). The BSI Preferred Stock
      is immediately convertible at the option of the holders into common stock of
      the
      Company at a conversion price equal to the greater of (i) $0.75, or (ii) the
      average closing price of the common stock during the ten trading days
      immediately preceding the conversion date.





**NOTE
      10**  **STOCK
      OPTION PLANS**





On
      July
      10, 2007, the majority stockholders approved the 2007 Stock Incentive Stock
      Plan
      (the "2007 Incentive Plan") and authorized 1,000,000 shares of common stock
      for
      issuance of stock awards and stock options thereunder. As of November 14, 2007,
      no stock awards or stock options have been issued under the 2007 Incentive
      Plan.





-27-





**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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





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





The
      following table summarizes information concerning all options and warrants
      at
      September 30, 2007:


Stock Options
                  
                  WarrantsWeighted
                  
                  WeightedAverage Exercise Price
                  
                  Average Exercise PriceShares
                  
                  Per Share
                  
                  Shares
                  
                  Per Share
                  
                  Total
                  
                  ExercisableBalance
                      at 03/09/2007 (Inception):
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Granted
                  
                  
                  96,400
                  
                  $
                  0.750
                  
                  
                  3,553,667
                  
                  $
                  0.590
                  
                  
                  3,456,667
                  
                  
                  3,456,667Excercised
                  
                  
                  -
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  -Expired
                  
                  
                  -
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  -Forfeited
                  
                  
                  -
                  
                  
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  -Balance
                      at 06/30/2007:
                  
                  
                  96,400
                  
                  $
                  0.750
                  
                  
                  3,553,667
                  
                  $
                  0.590
                  
                  
                  3,553,067
                  
                  
                  1,230,767




The
                following table summarizes information concerning options and warrants
                outstanding and excercisable at September 30,
                2007:




Options Outstanding
            
            Options ExercisableWeighted
            
            
            
            AverageWeighted
            
            Number
            
            Average
            
            Number
            
            ExerciseAverage
            
            of
            
            Exercise
            
            of
            
            Price PerRange of Exercise Prices
            
            Remaining Life
            
            Options
            
            Price Per Share
            
            Options
            
            Share$0.750
            
            
            4.75
            
            
            96,400
            
            $
            0.750
            
            
            24,100
            
            $
            0.750$0.750
            
            
            4.75
            
            
            96,400
            
            $
            0.750
            
            
            24,100
            
            $
            0.750




Warrants
                Outstanding
            
            Warrants
                ExercisableWeighted
            
            
            
            WeightedWeighted
            
            
            
            Average
            
            
            
            AverageAverage
              Remaining
            
            Number
              of
            
            Exercise
              Price
                Per
            
            Number
              of
            
            Exercise
              Price
                PerRange
                of Exercise Prices
            
            Life
            
            Warrants
            
            Share
            
            Warrants
            
            Share$0.015
            
            
            4.75
            
            
            6,667
            
            $
            0.015
            
            
            6,667
            
            $
            0.015$0.150
            
            
            4.75
            
            
            1,200,000
            
            $
            0.150
            
            
            1,200,000
            
            $
            0.150$0.900
            
            
            4.75
            
            
            2,250,000
            
            $
            0.900
            
            
            2,250,000
            
            $
            0.900$0.015
                - 0.900
            
            
            4.75
            
            
            3,456,667
            
            $
            0.586
            
            
            3,456,667
            
            $
            0.149




-28-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





**NOTE
      11**  **OTHER
      COMMITMENTS AND CONTINGENCIES**





As
      described in Note 7, 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%. As of November 14, 2007, no demand
      for registration has been received by the Company. See Note 12, below, for
      related events.





On
      July
      10, 2007 the Company executed a letter of intent to acquire North Shore Energy
      Technologies ("North Shore"), a sustainable energy company planning to build
      a
      bio-refinery capable of economically converting wood waste into highly-versatile
      methanol. However, the signed letter of intent expired and the company has
      no
      plans to pursue this acquisition





**NOTE
      12**  **SUBSEQUENT
      EVENTS**





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





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





**NOTE
      13 RESTATEMENTS**





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





*Intangible
      assets and related amortization expense:*





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





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





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




-29-




**RENEWAL
      FUELS, INC.**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**AS
      OF AND FOR THE PERIODS ENDED SEPTEMBER 30, 2007**


**(UNAUDITED)**





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





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




**As**
                **Reported**
              
              **Restatement****Adjustments**
              
              **As**
                **Restated****Balance
                  Sheet as of September 30, 2007**Finance
                  fees net
              
              $
              1,679,695
              
              $
              (1,303,452
              )(A)
              
              376,243Intangible
                  assets, net
              
              
              350,193
              
              
              112,100
              (B)
              
              462,293Paid-in
                  capital
              
              
              10,053,601
              
              
              (1,677,020
              )(A)
              
              8,376,581Accumulated
                  Deficit
              
              
              (10,530,791
              )
              
              367,667
              (C)
              
              (10,163,124
              )**Statement
                  of Operations, Three Months Ended September 30,
                  2007**Amortization
                  of intangible assets
              
              
              52,807
              
              
              (7,539
              )(B)
              
              45,268Financing
                  fees
              
              
              266,076
              
              
              (210,326
              )(A)
              
              55,750Net
                  income (loss) per shareBasic
              
              
              (0.17
              )
              
              0.01
              (C)
              
              (0.16
              )Diluted
              
              
              (0.17
              )
              
              0.01
              (C)
              
              (0.16
              )**Statement
                  of Operations, March 9, 2007 (Date of Inception) to September 30,
                  2007**Amortization
                  of intangible assets
              
              
              52,807
              
              
              5,900
              (B)
              
              58,707Financing
                  fees
              
              
              447,325
              
              
              (373,568
              )(A)
              
              73,757Net
                  income (loss) per shareBasic
              
              
              (0.43
              )
              
              0.02
              (C)
              
              (0.41
              )Diluted
              
              
              (0.43
              )
              
              0.02
              (C)
              
              (0.41
              )




Notes
      to
      adjustments:





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





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





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




-30-





**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


·
            Going
                Concern Statement


·
            Critical
                Accounting Policies and Estimates


·
            Recent
                Accounting Pronouncements


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





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





**OVERVIEW**





As
      of the
      end of the quarter, September 30, 2007, Renewal Fuels, Inc. (“Renewal”) had two
      wholly-owned subsidiaries - Renewal Biodiesel, Inc. (“Renewal Biodiesel”) and
      Biodiesel Solutions, Inc. (“BSI”).




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
      is
      developing and will 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 will provide a biodiesel production
      system that is continuous, flexible, efficient, affordable, and fully-automated.
      The automated control system will minimize labor costs and facilitates remote
      diagnostics. BSI’s manufacturing facilities are currently located in Sparks,
      Nevada, adjacent to the manufacturing facilities for Renewal
      Biodiesel.





-31-





**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. In addition, the Company paid $180,000 in fees
      in
      connection with the additional debt funding provided by YA Global.





Tech
      Laboratories had no active business operations immediately prior to the merger.
      Mr. John King, 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.





-32-




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.





**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. As discussed in Note 1 to the financial statements,
      we acquired BSI on July 2, 2007, which effectively resulted in termination
      of
      the agreement.





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





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





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





-33-





**Acquisition
      of BSI**





On
      July
      2, 2007, we entered into a merger agreement with BSI, as a result of which
      we
      acquired the remainder of BSI's business (i.e., other than the FuelMeister
      Business acquired previously). BSI is engaged in the business of designing,
      manufacturing and marketing processing equipment and accessories, including
      personal biodiesel processors and “community scale” biodiesel processor systems,
      which convert fresh and used vegetable oils into clean burning biodiesel fuel.
      It complements and optimizes Renewal’s ability to design, develop, manufacture
      and market both personal and community scale biodiesel processing equipment
      and
      accessories.





As
      consideration for the acquisition of BSI, we issued an aggregate of 3,333,333
      shares of common stock, 1,000,000 new Series B preferred shares of BSI,
      initially convertible into 1,333,333 shares of our common stock, options to
      purchase 94,600 shares of our common stock and $500,000 in cash. The BSI
      Preferred Stock is immediately convertible at the option of the holders into
      common stock of the Company at a conversion price equal to the greater of (i)
      $0.75, or (ii) the average closing price of the common stock during the ten
      trading days immediately preceding the conversion date. Prior to the acquisition
      of BSI, the Company loaned $200,000 to BSI under an 8% 180 day secured
      promissory note, due November 24, 2007. Upon the acquisition of BSI, the note
      receivable was reclassified as a capital contribution to BSI.





Also
      on
      July 2, 2007, we entered into a Securities Purchase Agreement with YA Global
      providing for the sale to YA Global of secured convertible debentures in the
      aggregate principal amount of $2,700,000, of which $2,000,000 was advanced
      immediately. The second installment of $700,000 will be funded within two
      business days after the Company has unconditionally booked and received at
      least
      a 50% deposit for the sale of at least one BiodieselMaster® unit. We also issued
      to YA Global five-year warrants to purchase 2,250,000 shares of our common
      stock
      at $0.90 per share. The Debentures bear interest at the prime rate plus 2.75%
      (but not less than 10%) and mature two years from the date of issuance (the
      "Maturity Date"). The Company is not required to make any payments until the
      Maturity Date. The holder of the Debentures may convert at any time amounts
      outstanding into shares of Common Stock at a conversion price per share equal
      to
      the lesser of (i) $0.75, or (ii) 80% of the lowest closing bid price of the
      Common Stock during the ten trading days immediately preceding the conversion
      date.





The
      aggregate purchase price for the BSI acquisition was determined based on the
      fair value of the consideration issued, which consisted of common stock,
      preferred shares of BSI convertible into our common stock, options to purchase
      our common stock and cash, as follows:





3,333,333
                shares of common stock
            
            $
            2,000,0001,000,000
                shares of preferred stock of BSI
            
            
            800,00096,400
                common stock options
            
            
            48,181Note
                receivable from BSI reclassified to contributed capital
            
            
            200,000Cash
                paid, net of $77,986 cash acquired
            
            
            422,014Total
                purchase price
            
            $
            3,470,195




The
      purchase price was allocated to BSI’s net tangible and intangible assets based
      on their estimated fair values as of the date of the completion of the
      acquisition. The amount allocated to purchased “in process research and
      development costs” was valued at fair value using a debt free cash flow method.
      As required by current accounting literature, these costs are immediately
      expensed in the current period’s income statement. The allocation of the total
      purchase price is summarized below:





Purchase
                Price
            
            Asset
                LifeAllocation
            
            In
                YearsWorking
                capital, net and excluding cash acquired
            
            $
            (204,231
            )
            
            -Fixed
                assets
            
            
            90,447
            
            
            3
                - 10In
                process research and development
            
            
            3,140,000
            
            
            -Employee
                contracts
            
            
            114,000
            
            
            2Non-compete
                agreements
            
            
            100,000
            
            
            1.5Goodwill
            
            
            229,979
            
            
            IndefiniteNet
                Assets Acquired
            
            $
            3,470,195




-34-





**Purchase
      Accounting For Acquisitions**





The
      results of operations of the 2007 Acquisitions are included in the Company's
      results of operations beginning after their respective acquisition dates. The
      following unaudited pro forma information combines the consolidated results
      of
      operations of the Company and the companies that it acquired as if the
      acquisitions had occurred at the beginning of fiscal year 2006:




Three Months
              Ended September, 30,
            
            For The Nine Months EndedSeptember 30,2007
            
            2006
            
            2007
            
            2006Revenues
            
            $
            148,800
            
            $
            459,539
            
            $
            500,292
            
            $
            1,378,617Loss
                from Operations
            
            $
            (615,896
            )
            $
            (178,488
            )
            $
            (1,452,114
            )
            $
            (8,794,637
            )Net
                Loss
            
            $
            (1,216,899
            )
            $
            (743,966
            )
            $
            (3,389,752
            )
            $
            (10,491,193
            )Per
                Share - basic and fully diluted
            
            $
            (0.04
            )
            $
            (0.12
            )
            $
            (0.07
            )
            $
            (0.38
            )Weighted
                average shares outstanding
            
            
            27,488,705
            
            
            27,488,705
            
            
            27,488,705
            
            
            27,488,705




The
      unaudited pro forma information does not purport to be indicative of the results
      that would actually have been achieved had the acquisitions occurred as of
      the
      date of the periods indicated.





**Predecessor
      Business**





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





-35-





**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. This design was accomplished during an extensive upgrade
      to
      the product’s specifications in 2006. 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.





BSI,
      which was acquired on July 2, 2007, manufactures a complementary product to
      FuelMeister called BiodieselMaster®. This product is a factory-built biodiesel
      processing plant that is appropriately scaled for a variety of customers,
      including small communities, farms, farm co-ops and trucking fleets. The
      BiodieselMaster® is a community-scale biodiesel processing unit that is designed
      to produce 350,000 gallons of biodiesel per year. The design provides a
      biodiesel production system that is continuous, flexible, efficient, affordable,
      and fully-automated. The automated control system minimizes labor costs and
      facilitates remote diagnostics.





**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, 2007
                (Successor)


·
            Results
                of operations for the period March 9, 2007 (date of inception) through
                September 30, 2007 (Successor)


·
            Results
                of operations for the three months ended September 30, 2006
                (Predecessor);


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


·
            Results
                of operations for the nine months ended September 30, 2006
                (Predecessor);





-36-




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





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





**Net
                Sales**
            
            $
            148,800
            
            
            100.0
            %Cost
                of sales
            
            
            109,048
            
            
            73.3
            %**Gross
                Profit**
            
            
            39,752
            
            
            26.7
            %**Operating
                Expenses:**Employee
                compensation and benefits
            
            
            243,101
            
            
            163.4
            %Occupancy
                and equipment
            
            
            71,045
            
            
            47.7
            %Advertising
            
            
            96,187
            
            
            64.6
            %Research
                and development
            
            
            3,140,000
            
            
            2110.2
            %Professional
                fees
            
            
            80,150
            
            
            53.9
            %Other
                general and administrative expenses
            
            
            217,665
            
            
            146.3
            %Amortization
                of intangible assets
            
            
            45,268
            
            
            30.4
            %Total
                Operating Expenses
            
            
            3,893,4160
            
            
            2616.5
            %**Operating
                Income (Loss)**
            
            
            (3,853,664
            )
            
            (2589.8
            )%Interest
                income
            
            
            68
            
            
            0.0
            %Deferred
                financing fees
            
            
            (55,750
            )
            
            (37.8
            )%Interest
                expense
            
            
            (221,050
            )
            
            (148.6
            )%Other
                expenses
            
            
            (23,326
            )
            
            (15.7
            )%**Net
                Income (Loss)**
            
            $
            (4,153,722
            )
            
            (2791.5
            )%




**Revenues**





For
      the
      three months ended September 30, 2007, revenues were $148,800, a decrease when
      compared with the Predecessor’s three months ended September 30, 2006, due to
      management’s focus on the commercial BiodieselMaster® product and less on the
      FuelMeister product.





**Cost
      of Sales and Gross Profit**





Cost
      of
      sales for the three months ended September 30, 2007 was $109,048 or 73.3% of
      revenues for the quarter, resulting in a gross profit margin of $39,752 or
      26.7%
      for the three months ended September 30, 2007.





**Employee
      Compensation and Benefits**





Employee
      compensation and benefits were $243,101 or 163.4% of revenues for the three
      months ended September 30, 2007,. These expenses have increased when compared
      with the Predecessor’s three months ended September 30, 2006 due to increased
      engineering and labor costs associated with the BiodieselMaster®
product.





**Occupancy
      and Equipment**





Occupancy
      and equipment expenses, consisting of rent, depreciation, amortization, and
      other miscellaneous expenses, amounted to $71,045 or 47.7% of revenues for
      the
      three months ended September 30, 2007, an increase when compared with the
      Predecessor’s three months ended September 30, 2006 due to facility expansion
      for the BiodieselMaster ® product.





**Advertising
      Expenses**





Advertising
      expenses were $96,187, or 64.6% of revenues, for the three months ended
      September 30, 2007 and increased when compared with the Predecessor’s three
      months ended September 30, 2006 due to website costs and management’s re-launch
      of the FuelMeister product.




**Research
      and Development Expenses**





Research
      and development expenses for the three months ended September 30, 2007 were
      $3,140,000, representing in-process research and development costs incurred
      in
      the acquisition of BSI on July 2, 2007.




-37-




**Professional
        Fees**
 
 Professional
        fees, consisting primarily of accounting, attorney and valuation fees, were
        $80,150 or 53.9% of revenues for the three months ended September 30, 2007
        and
        increased compared with the Predecessor’s three months ended September 30, 2006
        due to increased costs associated with SEC compliance and related
        matters.
 
 **General
        and Administrative Expenses**
 
 General
        and administrative expenses, consisting of administrative expenses, insurance
        and other non-manufacturing related expenses, were $217,665 or 146.3% of
        revenue
        for the three months ended September 30, 2007 and increased compared with
        the
        Predecessor’s three months ended September 30, 2006 due to additional costs
        associated with the BiodieselMaster® product.
 
 **Amortization
        of Intangible Assets**
 
 Amortization
        of intangible assets was $45,268 or 30.4% of revenue for the three months
        ended
        September 30, 2007, primarily due to the amortization of assets acquired
        in the
        acquisition of BSI
 
 **Net
        Financial (Income) Expense**
 
 Net
        financial (income) expense, consisting primarily of interest expense of $221,050
        and amortization of financing fees of $56,250, amounted to a net expense
        of
        $277,300 for the three months ended September 30, 2007, and increased compared
        with the Predecessor’s three months ended September 30, 2006, due to the
        amortization of deferred financing costs and debt discount associated with
        our
        convertible debenture obligations.
 
 **Provision
        for Income Taxes**
 
 During
        the three months ended September 30, 2007, we experienced an operating loss
        for
        tax purposes. FuelMeister, our Predecessor, had historically experienced
        operating losses, and as FuelMeister’s management were uncertain as to whether
        FuelMeister would be able to utilize these tax losses before they expire,
        they
        provided a reserve for the income tax benefits associated with FuelMeister’s net
        future tax assets which primarily related to its cumulative net operating
        losses. We have adopted the same policy to reserve such net tax assets until
        such time as profitability is reasonably assured and it becomes more likely
        than
        not that we will be able to utilize such assets.
 
 **Net
        Loss**
 
 As
        a
        result of the above, we reported a net loss of $4,153,722 for the three months
        ended September 30, 2007.
  -38-
  ***RESULTS
        OF OPERATIONS FOR THE PERIOD MARCH 9, 2007 (DATE OF INCEPTION) THROUGH SEPTEMBER
        30, 2007***
 
 The
        information contained in this section is that of the Successor, Renewal Fuels,
        Inc., for the period March 9, 2007 (date of inception) through September
        30,
        2007 (unaudited).
 
 **Net
                  Sales**
              
              $
              392,887
              
              
              100.0
              %Cost
                  of Sales
              
              
              251,390
              
              
              64.0
              %**Gross
                  Profit**
              
              
              141,497
              
              
              36.0
              %**Operating
                  Expenses:**Employee
                  compensation and benefits
              
              
              277,373
              
              
              70.6
              %Stock-based
                  transaction expense
              
              
              5,131,231
              
              
              1306.0
              %Occupancy
                  and equipment
              
              
              79,302
              
              
              20.2
              %Advertising
              
              
              140,170
              
              
              35.7
              %Research
                  and development
              
              
              3,140,000
              
              
              799.2
              %Professional
                  fees
              
              
              429,891
              
              
              109.4
              %Other
                  general and administrative expenses
              
              
              315,209
              
              
              80.2
              %Amortization
                  of intangible assets
              
              
              58,707
              
              
              14.9
              %Total
                  Operating Expenses
              
              
              9,571,883
              
              
              2436.3
              %**Operating
                  Income (Loss)**
              
              
              (9,430,386
              )
              
              (2400.3
              )%Interest
                  income
              
              
              823
              
              
              0.2
              %Deferred
                  financing fees
              
              
              (73,757
              )
              
              (18.8
              )%Interest
                  expense
              
              
              (636,477
              )
              
              (162.0
              )%Other
                  expenses
              
              
              (23,326
              )
              
              (5.9
              )%0.0
              %**Net
                  Income (Loss)**
              
              $
              (10,163,124
              )
              
              (2586.8
              )%
 
 **Net
        Sales**
 
 For
        the
        period from March 9, 2007 (inception) through September 30, 2007, net sales
        were
        $392,887 and decreased when compared with the Predecessor’s nine months ended
        September 30, 2006 due to management’s focus on the commercial BiodieselMaster®
product and less on the FuelMeister product.
 
 **Cost
        of Sales and Gross Profit**
 
 Cost
        of
        sales for the three months ended September 30, 2007 was $251,390 or 64.0%
        of
        revenues and decreased compared with the Predecessor’s nine months ended
        September 30, 2006 due to management’s focus on the commercial BiodieselMaster®
product and less on the FuelMeister product. Gross profit margin was $141,497
        or
        36.0% for the period from March 9, 2007 (inception) through September 30,
        2007.
 
 **Employee
        Compensation and Benefits**
 
 Employee
        compensation and benefits were $277,373 or 70.6% of revenues for the period
        from
        March 9, 2007 (inception) through September 30, 2007 and increased compared
        with
        the Predecessor’s nine months ended September 30, 2006 due to increased
        engineering and labor costs associated with the BiodieselMaster®
product.
 
 **Stock
        Based Transaction Expense**
 
 Stock
        based transaction expense related to the reverse merger and recapitalization
        was
        $5,131,231 for the period from March 9, 2007 (inception) through September
        30,
        2007.
 
 **Occupancy
        and Equipment**
 
 Occupancy
        and equipment expenses, consisting of rent, depreciation, amortization, and
        other miscellaneous expenses, amounted to $79,302 or 20.2% of revenues for
        the
        period from March 9, 2007 (inception) through September 30, 2007 and increased
        compared with the Predecessor’s nine months ended September 30, 2006 due to
        facility expansion for the BiodieselMaster ® product.
  -39-
  **Advertising
        Expenses**
 
 Advertising
        expenses were $140,170, or 35.7% of revenues, for the period from March 9,
        2007
        (inception) through September 30, 2007 and increased compared with the
        Predecessor’s nine months ended September 30, 2006 due to website costs and
        management’s re-launch of the FuelMeister product.
 
 **Research
        and Development Expenses**
 
 Research
        and development expenses for the period from March 9, 2007 (inception) through
        September 30, 2007were $3,140,000 representing in-process research and
        development costs incurred in the acquisition of BSI on July 2,
        2007..
 
 **Professional
        Fees**
 
 Professional
        fees, consisting primarily of accounting, attorney and valuation fees, were
        $429,891 or 109.4% of revenues for the period from March 9, 2007 (inception)
        through September 30, 2007 and increased compared with the Predecessor’s nine
        months ended September 30, 2006 due to increased costs associated with SEC
        compliance and related matters.
 
 **General
        and Administrative Expenses**
 
 General
        and administrative expenses, consisting of administrative expenses, insurance
        and other non-manufacturing related expenses, were $315,209 or 80.2% of revenue
        for the period from March 9, 2007 (inception) through September 30, 2007
        and
        increased compared with the Predecessor’s three months ended September 30, 2006
        due to additional costs associated with the BiodieselMaster®
product.
 
 **Amortization
        of Intangible Assets Expense**
 
 Amortization
        of intangible assets was $58,707 or 14.9% of revenue for the period from
        March
        9, 2007 (inception) through September 30, 2007, primarily related to the
        amortization of assets related to the acquisition of BSI on July 2,
        2007.
 
 **Net
        Financial (Income) Expense**
 
 Net
        financial (income) expense, consisting primarily of interest expense of $636,477
        and amortization of financing fees of $73,757, amounted to a net expense
        of
        $710,234 for the period from March 9, 2007 (inception) through September
        30,
        2007.
 
 **Provision
        for Income Taxes**
 
 During
        the period from March 9, 2007 (inception) through September 30, 2007, we
        experienced an operating loss for tax purposes. FuelMeister, our Predecessor,
        had historically experienced operating losses, and as FuelMeister’s management
        were uncertain as to whether FuelMeister would be able to utilize these tax
        losses before they expire, they provided a reserve for the income tax benefits
        associated with FuelMeister’s net future tax assets which primarily related to
        its cumulative net operating losses. We have adopted the same policy to reserve
        such net tax assets until such time as profitability is reasonably assured
        and
        it becomes more likely than not that we will be able to utilize such
        assets.
 
 **Net
        Loss**
 
 As
        a
        result of the above, we reported a net loss of $10,163,124 for the period
        from
        March 9, 2007 (inception) through September 30, 2007.
  -40-
  ***RESULTS
        OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006
        (PREDECESSOR)***
 
 The
        information contained in this section is that of our Predecessor, the
        FuelMeister Business, for the three months ended September 30, 2006
        (unaudited).
 
 **Net
                  Sales**
              
              $
              571,386
              
              
              100
              %Cost
                  of sales
              
              
              350,804
              
              
              61.4
              %**Gross
                  Profit**
              
              
              220,582
              
              
              38.6
              %**Operating
                  Expenses:**Employee
                  compensation and benefits
              
              
              65,405
              
              
              11.4
              %Occupancy
                  and equipment
              
              
              24,705
              
              
              4.3
              %Advertising
              
              
              37,452
              
              
              6.6
              %Professional
                  fees
              
              
              6,588
              
              
              1.2
              %Other
                  general and administrative expenses
              
              
              34,918
              
              
              6.1
              %Total
                  Operating Expenses
              
              
              169,069
              
              
              29.6
              %**Operating
                  Income (Loss)**
              
              
              51,513
              
              
              9.0
              %**Net
                  Income (Loss)**
              
              $
              51,513
              
              
              9.0
              %
 
 **Revenues**
 
 For
        the
        three months ended September 30, 2006, FuelMeister’s revenue was
        $571,386.
 
 **Cost
        of Sales and Gross Profit**
 
 Cost
        of
        sales for the three months ended September 30, 2007 was $350,804 or 61.4%
        of
        revenues for the quarter. As a result, gross profit margin was $220,581 or
        38.6%.
 
 **Employee
        Compensation and Benefits**
 
 Employee
        compensation and benefits were $65,405 or 11.4% of revenues for the three
        months
        ended September 30, 2006.
 
 **Occupancy
        and Equipment**
 
 Occupancy
        and equipment expenses, consisting of rent, depreciation, amortization, and
        other miscellaneous expenses, amounted to $24,705 or 4.3% of revenues for
        the
        three months ended September 30, 2006.
 
 **Professional
        Fees**
 
 Professional
        fees, consisting primarily of accounting and attorney fees of $6,588 were
        1.2%
        of revenues for the three months ended September 30, 2006.
 
 **General
        and Administrative Expenses**
 
 General
        and administrative expenses, consisting of administrative expenses, insurance
        and other non-manufacturing related expenses, were $34,918, or 6.1% of revenue
        for the three months ended September 30, 2006.
 
 **Provision
        for Income Taxes**
 
 During
        the three months ended September 30, 2006, FuelMeister experienced an operating
        loss for tax purposes. FuelMeister had historically experienced operating
        losses, and as FuelMeister’s management were uncertain as to whether FuelMeister
        would be able to utilize these tax losses before they expire, they provided
        a
        reserve for the income tax benefits associated with FuelMeister’s net future tax
        assets which primarily related to its cumulative net operating
        losses.
 
 **Net
        Income**
 
 As
        a
        result of the above, FuelMeister reported net income of $51,513 or 9.1% of
        revenues for the three months ended September 30, 2006.
  -41-
  ***RESULTS
        OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007
        (PREDECESSOR)***
 
 The
        information contained in this section is that of our Predecessor, the
        FuelMeister Business, for the three months ended March 31, 2007
        (unaudited).
 
 **Net
                  Sales**
              
              $
              104,360
              
              
              100.0
              %Cost
                  of Sales
              
              
              76,802
              
              
              73.6
              %**Gross
                  Profit**
              
              
              27,558
              
              
              26.4
              %**Operating
                  Expenses:**Occupancy
                  and equipment
              
              
              18,666
              
              
              17.9
              %Advertising
              
              
              8,474
              
              
              8.1
              %Other
                  general and administrative expenses
              
              
              79,879
              
              
              76.5
              %Total
                  Operating Expenses
              
              
              107,019
              
              
              102.5
              %**Operating
                  Income (Loss)**
              
              
              (79,461
              )
              
              (76.1
              )%**Net
                  Income (Loss)**
              
              $
              (79,461
              )
              
              (76.1
              )%
  **Revenues**
 
 For
        the
        three months ended March 31, 2007, FuelMeister’s revenue was
        $104,360.
 
 **Cost
        of Sales and Gross Profit**
 
 Cost
        of
        sales for the three months ended March 31, 2007 was $76,802, or 73.6% of
        revenues, resulting in a gross profit margin of $27,558 or 26.4%.
 
 **Advertising
        Expenses**
 
 Advertising
        expenses were $8,474, or 8.1% of revenues, for the three months ended March
        31,
        2007.
 
 **General
        and Administrative Expenses**
 
 General
        and administrative expenses, consisting of payroll, administrative expenses,
        insurance, legal and other non-manufacturing related expenses were $79,879
        for
        the three months ended March 31, 2007. Payroll accounted for most of the
        expense
        with $52,320 for the three months ended March 31, 2007.
 
 **Occupancy
        and Equipment**
 
 Occupancy
        and equipment expense, consisting of rent, depreciation, amortization, and
        other
        miscellaneous expenses, amounted to $18,666 for the three months ended March
        31,
        2007.
  **Provision
        for Income Taxes**
 
 During
        the three months ended March 31, 2007, FuelMeister experienced operating
        and tax
        losses. FuelMeister had historically experienced operating losses, and as
        FuelMeister’s management were uncertain as to whether FuelMeister would be able
        to utilize these tax losses before they expire, they provided a reserve for
        the
        income tax benefits associated with FuelMeister’s net future tax assets which
        primarily relate to its cumulative net operating losses.
 
 **Net
        Loss**
 
 As
        a
        result of the above, FuelMeister reported a net loss of $79,461 for the three
        months ended March 31, 2007.
  -42-
  ***RESULTS
        OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
        (PREDECESSOR)***
 
 The
        information contained in this section is that of our Predecessor, FuelMeister,
        for the nine months ended September 30, 2006 (unaudited).
 
 **Net
                  Sales**
              
              $
              1,638,813
              
              
              100
              %Cost
                  of Sales
              
              
              1,034,220
              
              
              63.1
              %**Gross
                  Profit**
              
              
              604,593
              
              
              36.9
              %**Operating
                  Expenses:**Employee
                  compensation and benefits
              
              
              197,103
              
              
              12.0
              %Occupancy
                  and equipment
              
              
              98,481
              
              
              6.0
              %Advertising
              
              
              55,542
              
              
              3.4
              %Professional
                  fees
              
              
              18,617
              
              
              1.1
              %Other
                  general and administrative expenses
              
              
              119,299
              
              
              7.3
              %Total
                  Operating Expenses
              
              
              489,042
              
              
              29.8
              %**Operating
                  Income (Loss)**
              
              
              115,551
              
              
              7.1
              %**Net
                  Income (Loss)**
              
              $
              115,551
              
              
              7.1
              %
  **Revenues**
 
 For
        the
        nine months ended September 30, 2006, FuelMeister’s revenue was
        $1,638,813.
 
 **Cost
        of Sales and Gross Profit**
 
 Cost
        of
        sales for the nine months ended September 30, 2006 was $1,034,220 or 63.1%
        of
        revenues for the quarter. As a result, gross profit margin was $604,593 or
        36.9%.
 
 **Employee
        Compensation and Benefits**
 
 Employee
        compensation and benefits were $197,103 or 12.0% of revenues for the nine
        months
        ended September 30, 2006.
 
 **Occupancy
        and Equipment**
 
 Occupancy
        and equipment expenses, consisting of rent, depreciation, amortization, and
        other miscellaneous expenses, amounted to $98,481 or 6.0% of revenues for
        the
        nine months ended September 30, 2006.
 
 **Professional
        Fees**
 
 Professional
        fees, consisting primarily of accounting and attorney fees of $18,617 were
        1.1%
        of revenues for the nine months ended September 30, 2006.
 
 **General
        and Administrative Expenses**
 
 General
        and administrative expenses, consisting of administrative expenses, insurance
        and other non-manufacturing related expenses, were $119,299 or 7.3% of revenue
        for the nine months ended September 30, 2006.
 
 **Provision
        for Income Taxes**
 
 During
        the nine months ended September 30, 2006, we experienced an operating loss
        for
        tax purposes. FuelMeister, our Predecessor, had historically experienced
        operating losses, and as FuelMeister’s management were uncertain as to whether
        FuelMeister would be able to utilize these tax losses before they expire,
        they
        provided a reserve for the income tax benefits associated with FuelMeister’s net
        future tax assets which primarily related to its cumulative net operating
        losses. We have adopted the same policy to reserve such net tax assets until
        such time profitability is reasonably assured and it becomes more likely
        than
        not that we will be able to utilize such assets.
 
 **Net
        Income**
 
 As
        a
        result of the above, we reported net income of $115,552 for the nine months
        ended September 30, 2006.
  -43-
 
 **GOING
        CONCERN**
 
 Our
        financial statements are prepared using accounting principles generally accepted
        in the United States of America applicable to a going concern, which contemplate
        the realization of assets and the liquidation of liabilities in the normal
        course of business. Since inception, we have incurred losses from operations.
        Furthermore, we will require a significant amount of capital to proceed with
        our
        business plan. As such, our ability to continue as a going concern is contingent
        upon us being able to secure an adequate amount of debt or equity capital
        to
        enable us to meet our operating cash requirements and successfully implement
        our
        business plan. In addition, our ability to continue as a going concern must
        be
        considered in light of the challenges, expenses and complications frequently
        encountered by entrance into new markets and the competitive environment
        in
        which we operate.
 
 Our
        Predecessor historically funded its cash requirements through operations
        and
        contributions from the former owner. In connection with the acquisition of
        the
        FuelMeister Business and BSI, we obtained debt financing. We expect we will
        need
        to obtain additional funding through private or public equity and/or debt
        financing to pay for the infrastructure needed to support our planned growth
        but, as a public company, we believe we will have better access to additional
        debt or equity capital.
 
 There
        can
        be no assurance that our plans will materialize and/or that we will be
        successful in raising required capital to grow our business and/or that any
        such
        capital will be available on terms acceptable to us. These factors, among
        others, indicate that we may be unable to continue as a going concern for
        a
        reasonable period of time. Our financial statements do not include any
        adjustments relating to the recoverability and classification of recorded
        asset
        amounts or the amounts and classification of liabilities that might be necessary
        should we be unable to continue as a going concern.
 
 **CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES**
 
 The
        preparation of financial statements in conformity with United States generally
        accepted accounting principles requires management to make estimates and
        assumptions that affect the reported amount of assets and liabilities and
        disclosure of contingent assets and liabilities at the date of the financial
        statements and the reported amounts of revenues and expenses during the
        reporting period. Actual results could differ from those estimates. Our
        management routinely makes judgments and estimates about the effects of matters
        that are inherently uncertain.
 
 Our
        critical accounting policies are those where we have made the most difficult,
        subjective or complex judgments in making estimates, and/or where these
        estimates can significantly impact our financial results under different
        assumptions and conditions. Our critical accounting policies are:
  ·
              Revenue
                  Recognition
  ·
              Allowance
                  for Doubtful Accounts
  ·
              Derivative
                  Financial Instruments
  ·
              Warranty
                  Obligations
  ·
              Inventory
                  Obsolescence
  **Revenue
        Recognition**
 
 In
        accordance with Staff Accounting Bulletin 104 - Revenue Recognition in Financial
        Statements (“SAB 104”), revenue is generally recognized and earned when all of
        the following criteria are satisfied a) persuasive evidence of sales
        arrangements exist; b) delivery has occurred; c) the sales price is fixed
        or
        determinable, and d) collectibility is reasonably assured. It is the fourth
        criterion that requires us to make significant estimates. In those cases
        where
        all four criteria are not met, we defer recognition of revenue until the
        period
        these criteria are satisfied. In some cases where collectibility is an issue,
        we
        defer revenue recognition until the cash is actually received.
 
 **Allowance
        for Doubtful Accounts**
 
 The
        allowance for doubtful accounts is evaluated on a regular basis and adjusted
        based upon management's best estimate of probable losses inherent in
        receivables, based on historical experience, including the historical loss
        experience of the Predecessor. Receivables are determined to be past due
        if they
        have not been paid by the payment due dates. Debts are written off against
        the
        allowance when deemed to be uncollectible. Subsequent recoveries, if any,
        are
        credited to the allowance when received.
  -44-
  **Derivative
        Financial Instruments**
 
 In
        connection with the sale of debt or equity instruments, we may sell options
        or
        warrants to purchase our common stock. In certain circumstances, these options
        or warrants may be classified as derivative liabilities, rather than as equity.
        Additionally, the debt or equity instruments may contain embedded derivative
        instruments, such as conversion options, which in certain circumstances may
        be
        required to be bifurcated from the associated host instrument and accounted
        for
        separately as a derivative instrument liability.
  The
        identification of, and accounting for, derivative instruments is complex.
        Any
        derivative instrument liabilities are re-valued at the end of each reporting
        period, with changes in the fair value of the derivative liability recorded
        as
        charges or credits to income, in the period in which the changes occur. For
        options, warrants and bifurcated conversion options that are accounted for
        as
        derivative instrument liabilities, we determine the fair value of these
        instruments using the Cox-Ross-Rubinstein binomial option pricing model.
        That
        model requires assumptions related to the remaining term of the instruments
        and
        risk-free rates of return, our current common stock price and expected dividend
        yield, and the expected volatility of our common stock price over the life
        of
        the instruments. Because of the limited trading history for our common stock,
        we
        have estimated the future volatility of our common stock price based on not
        only
        the history of our stock price but also the experience of other entities
        considered comparable to us. The identification of, and accounting for,
        derivative instruments and the assumptions used to value them can significantly
        affect our financial statements.
 
 **Product
        Warranties**
 
 At
        the
        time a sale is recognized, the company records the estimated future warranty
        costs. These costs are estimated based on historical warranty claims. For
        the
        current period we used the historical warranty experience of the Predecessor
        company. Warranty provisions are included as a component of cost of
        sales.
 
 **Inventory
        Obsolescence**
 
 We
        evaluate our inventory for excess and obsolescence on a quarterly basis.
        In
        preparing our evaluation, we look at the expected demand for our products
        for
        the next six to twelve months in order to determine whether or not such raw
        materials, WIP and finished goods require a change in the inventory reserve
        in
        order to record the inventory at net realizable value. After discussions
        with
        the senior management team, a reserve is established so that inventory is
        appropriately stated at the lower of cost or net realizable value.
 
 **RECENT
        ACCOUNTING PRONOUNCEMENTS**
 
 ***Impact
        of Recently Issued Accounting Pronouncements*** **** -
        The
        Financial Accounting Standards Board has recently issued several Financial
        Accounting Standards, as summarized below. None of these statements have
        had, or
        are expected to have, a significant effect on our financial statements or
        those
        of our Predecessor.
 
 Issued
              
              StatementFebruary
                  2006
              
              FAS
                  155 - “Accounting for Certain Hybrid Financial Instruments; an amendment
                  of Financial Accounting Standard Nos. 133 and 140" (“FAS
                  155”)March
                  2006
              
              FAS
                  156 - “Accounting for Servicing of Financial Assets, an amendment of FASB
                  Statement No. 140, Accounting for Transfers and Servicing of Financial
                  Assets and Extinguishments of Liabilities”June
                  2006
              
              FAS
                  Interpretation 48 - "Accounting for Uncertainty in Income
                  Taxes"September
                  2006
              
              FAS
                  157 - “Fair Value Measurements”September
                  2006
              
              FAS
                  158 - “Employers’ Accounting for Defined Benefit Pension and Other
                  Postretirement Plans” - an amendment of FASB Statements No. 87, 88, 106,
                  and 132(R)”February
                  2007
              
              FAS
                  159 - “The Fair Value Option for Financial Assets and Financial
                  Liabilities—Including an amendment of FASB Statement No.
                  115”
  -45-


**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 period from inception
      on March 9, 2007 through September 30, 2007, we had a net loss of $10,163,124
      which included non-cash items totaling $8,396,011, consisting primarily of
      stock-based transaction expense, acquired in process R&D, and amortization
      of deferred financing fees and intangible assets. 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 $962,521, of which $494,426 was used in the
      acquisition of the assets of the FuelMeister Business, our Predecessor, $46,081
      was used for fixed asset acquisitions, and $422,014 was used in the acquisition
      of BSI.





Net
      cash
      provided by financing activities was $3,007,211 consisting of $1,118,109 of
      proceeds from the sale of convertible debt, beneficial conversion
      feature, and warrants to YA Global, less $450,000 of fees incurred,
      issuance of warrants for $1,343,337, issuance of a beneficial conversion
      feature for $938,554, and $57,279 in proceeds from the sale of our common stock
      to our founders. At September 30, 2007, our primary debt has terms of
      approximately 21 months with interest rates ranging from 11% to 15%. All of
      our
      debt is convertible by the holder into shares of our common stock. Substantially
      all of our debt has variable interest rates and, accordingly, a change in
      interest rates will affect our results of operations. However, interest is
      generally payable on maturity, rather than currently, and thus our cash flows
      from operations would not be immediately impacted in the short-term by an
      adverse change in interest rates.





**Financing
      Through Equity**





On
      March
      09, 2007, founders stock and stock based transaction expenses were incurred
      in
      the amount of $57,279 and $5,131,231, respectively, as a result of the reverse
      merger.





**Financing
      Through Convertible Debentures**





**New
      Obligations**





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





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





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


-46-





Under
      the
      Purchase Agreement, the Company 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.





In
      connection with the Purchase Agreement, the Company 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, the Company is obligated to file a Registration
      Statement within 45 days of such demand and to use its best efforts to cause
      the
      Registration Statement to be declared effective no later than 150 days following
      receipt of such demand. The Company is also required to ensure that the
      Registration Statement remains in effect until all of the shares of common
      stock
      issuable upon conversion of the New Debentures and exercise of the warrants
      have
      been sold or may be sold without volume restrictions pursuant to Rule 144(k)
      promulgated by the SEC. In the event of a default of its obligations under
      the
      Registration Rights Agreement, including its agreement with respect to the
      filing and effectiveness dates for the Registration Statement, the Company
      is
      required to pay to 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%. As of November 14, 2007, no demand for registration has been
      received by the Company.





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





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





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





Under
      the
      Additional Purchase Agreement, the Company 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.





**Prior
      Obligations**





On
      April
      20, 2007, as part of the net liabilities assumed on the reverse merger, the
      Company 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, the Company previously issued warrants to
      purchase 6,666 shares of common stock at an exercise price of $0.015 per share.
      As amended on May 31, 2007, the Old Debentures are convertible into shares
      of
      common stock at a conversion price per share equal to the lesser of (a) $0.60
      or
      (b) 80% of the lowest closing bid price of the common stock during the ten
      trading days immediately preceding the conversion date.





In
      connection with these Old Debentures, the Company is obligated to file a
      Registration Statement with the SEC, registering the shares issuable on
      conversion of the Old Debentures and the Old Warrants. The Company has 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,
      the
      Company is 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. The Company has received a letter from YA
      Global waiving all rights to collect any and all liquidated damages,
      whether in shares of stock or cash, arising from any default under any of the
      convertible debenture agreements.





The
      Company also assumed the remaining portions of a convertible promissory note
      that was originally issued in 2000. A portion of the note is held by 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. During
      the
      period April 21, 2007 to September 30, 2007, YA Global converted their entire
      principal amount of $168,000 plus all accrued interest thereon of $61,000 into
      574,807 common shares.


-47-





On
      September 21, 2007, YA Global converted $215,000 of the $537,220 principal
      amount of the Old Debentures held by it into 1,343,750 shares of common stock
      at
      $0.16 per share (the lesser of $0.60 or 80% of the lowest closing bid price
      of
      the common stock during the ten trading days immediately preceding the
      conversion date, which was $0.20). These shares were issued by the transfer
      agent on October 5, 2007. As of November 14, 2007 there have been no conversions
      of convertible debentures subsequent to September 30, 2007.





**Derivative
      Instrument Liabilities and Beneficial Conversion Feature**





In
      accounting for the Convertible Debentures and the associated Warrants, the
      Company has considered the requirements of EITF Issue 00-19, "Accounting for
      Derivative Financial Instruments Indexed To, and Potentially Settled In, a
      Company's Own Common Stock". Because the number of shares that may be required
      to be issued on conversion of the Convertible Debentures is dependent on the
      price of the Company’s common stock, the number of shares ultimately required is
      indeterminate. However, full conversion of the outstanding Convertible
      Debentures and exercise of outstanding Warrants, together with currently
      outstanding common stock and all other currently existing requirements to issue
      common stock, require the Company to have approximately 52 million common shares
      authorized. The Company is authorized to issue 3 billion common shares. As
      a
      result, management of the Company believes it will have sufficient authorized
      shares available to physically settle all contracts that currently require
      delivery of common shares. Furthermore, management of the Company, together
      with
      investors associated with management, control a majority of the outstanding
      common shares of the Company. Accordingly, management of the Company believes
      it
      is in a position to secure shareholder approval of an increase in the authorized
      number of shares, should such an increase be required in the future. As a result
      of management’s conclusion that it will have sufficient authorized shares
      available to settle all outstanding contracts requiring delivery of common
      shares, the conversion option embedded in the Convertible Debentures has not
      been bifurcated and the Warrants issued in connection with the Convertible
      Debentures have been accounted for as equity instruments.





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





If
      the
      conversion option embedded in the Convertible Debentures has not been
      bifurcated, then the effective conversion price for a Convertible Debenture
      is
      less than the market value of the underlying shares at the time the debenture
      is
      issued (usually as a result of the allocation of part of the proceeds received
      to common stock warrants or other instruments), the Company recognizes a
      beneficial conversion feature in accordance with EITF Issues 98-05 and 00-27.
      The value of the beneficial conversion feature, which is credited to additional
      paid-in capital, reduces the initial carrying amount of the debenture. During
      the period ended June 30, 2007 and the three months September 30, 2007, the
      Company recorded beneficial conversion features aggregating $923,841 and
      $348,287, respectively.





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




For
      warrants and option-based derivative instruments, the Company estimates fair
      value using the Cox-Ross-Rubinstein binomial valuation model, based on the
      market price of the common stock on the valuation date, an expected dividend
      yield of 0%, a risk-free interest rate based on constant maturity rates
      published by the U.S. Federal Reserve applicable to the remaining term of the
      instruments, (which rates ranged from 4.57% to 4.90%), and an expected life
      equal to the remaining term of the instruments. Because of the limited
      historical trading period of our common stock, the expected volatility of our
      common stock over the remaining life of the conversion options and Warrants
      was
      estimated at 123%, based on a review of the volatility of entities considered
      by
      management as most comparable to our business.


-48-





**Investing**




**Acquisition
      of Assets of FuelMeister Business**





As
      noted
      above, 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.





**Acquisition
      of BSI**





As
      noted
      above, on July 2, 2007, we entered into a merger agreement with BSI, as a result
      of which we acquired the remainder of BSI's business (i.e., other than the
      FuelMeister Business acquired previously). BSI is engaged in the business of
      designing, manufacturing and marketing processing equipment and accessories,
      including personal biodiesel processors and “community scale” biodiesel
      processor systems, which convert fresh and used vegetable oils into clean
      burning biodiesel fuel. It complements and optimizes Renewal’s ability to
      design, develop, manufacture and market both personal and community scale
      biodiesel processing equipment and accessories.





**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.




**QUALITATIVE
      AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK**





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





**Interest
      Rates**





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





We
      considered the historical volatility of short term interest rates and determined
      that it was reasonably possible that an adverse change of 100 basis points
      could
      be experienced in the near term. Based on our borrowings at September 30, 2007,
      a hypothetical 1.00% (100 basis-points) increase in interest rates would result
      in additional expenses of approximately $10,000 for the quarter or an annual
      increase in expenses of approximately $40,000.





**Foreign
      Currency Fluctuations**





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





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





**OUTLOOK**





Activities
      in each of our businesses over the months since inception have been focused
      on
      establishing a strong foundation for growth.  For Renewal Biodiesel, this
      foundation is based on a strong dealer network, well-designed marketing/sales
      plans, and expansion of the product line.  We have made great strides
      in each of these areas, and have recovered from a difficult transition period
      from previous management, caused in part by lack of advertising spending in
      the
      first half of 2007.  We have established a strong management and operations
      team, and re-energized the marketing and sales efforts.  We have also
      established new distribution models and begun planning for new product
      introductions in the next six months.  Management of Renewal Biodiesel has
      been able to accomplish these gains while keeping Sales, General, and
      Administrative spending low, thereby creating a strong platform for
      profitability in the months ahead.  In addition, the recent increases in
      fuel prices have created a surge in buyer awareness and interest in the
      FuelMeister line of products.  We expect to see strong growth in the next
      year at Renewal Biodiesel, on the strength of the established
      foundation.




-49-





Since
      our
      acquisition of BSI, our focus has been on completion of the demonstration
      version of the BiodieselMaster®.  These efforts have included completion of
      production-model specifications, construction of the demonstration unit, and
      commissioning activities.  We have now completed the majority of these
      activities as well as establishment of a pipeline of customers.  As
      expected, we are ready to enter the market with BiodieselMaster® in the
      fourth quarter, and the level of interest in the product to date bodes well
      for
      our sales growth and profitability in this business.




Finally, we
      are actively negotiating with various parties to add to our portfolio of
      businesses and technologies.  We remain very excited by the opportunities
      in the biofuels sector, particularly those focused on production of biofuels
      from non-food feedstock.  When evaluating partnership and acquisition
      opportunities, our criteria include sustainability of the business model,
      sustainability of feedstock sources, and sustainability of the
      environment.  We are committed to making biofuels a viable and common part
      of the solution to cure the planet of its addiction to oil.


-50-





**ITEM
      3. Controls and Procedures.**





**Disclosure
      Controls and Procedures**





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





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





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





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





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





**Changes
      in Internal Control over Financial Reporting**





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




-51-







**PART
      II - OTHER INFORMATION**




**ITEM
      1. Legal Proceedings.**





None.




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





None.




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





None.




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





On
      July
      31, 2007, the majority stockholders of the Company approved a 1-for-15 reverse
      stock split pursuant to a written consent in lieu of a special meeting of
      stockholders and, as a result, all outstanding shares of Common Stock (the
      "Old
      Shares") were automatically converted into 23,805,126 shares of common
      stock (the "New Shares"). The authorized number of shares of common stock was
      not impacted by the reverse stock split. The reason for the reverse stock split
      was to increase the per share stock price to generate greater interest among
      professional investors and institutions. All New Shares have the same par value,
      voting rights and other rights as the Old Shares.





On
      July
      31, 2007, the majority stockholders of the Company approved the 2007 Stock
      Incentive Stock Plan (the "2007 Incentive Plan") and authorized 1,000,000 shares
      of Common Stock, for issuance of stock awards and stock options thereunder.
      The
      primary purpose of the 2007 Incentive Plan is to attract and retain the best
      available personnel for the Company by granting stock awards and stock options
      in order to promote the success of the Company's business and to facilitate
      the
      ownership of the Company's stock by employees.




**ITEM
      5. Other Information.**





None.




**ITEM
      6. Exhibits.**





**Exhibit Number**
            
            **Description**3.1
            
            Amendment
                to Certificate of Incorporation of Tech Laboratories, Inc.
                (1)3.2
            
            Amended
                and Restated By-laws of Tech Laboratories, Inc. (1)10.1
            
            Agreement
                and Plan of Merger, dated April 20, 2007, among Tech Laboratories,
                Inc.,
                Renewal Fuels Acquisitions, Inc. and Renewal Fuels, Inc.
                (1)10.2
            
            Asset
                Purchase Agreement, dated March 30, 2007, among Crivello Group, LLC,
                Renewal Fuels, Inc. and Biodiesel Solutions, Inc. (1)10.3
            
            Securities
                Purchase Agreement, dated April 20, 2007, by and between Tech
                Laboratories, Inc. and Cornell Capital Partners L.P.
                (1)10.4
            
            $1,000,000
                principal amount Secured Convertible Debenture, dated April 20, 2007,
                by
                and between Tech Laboratories, Inc. and Cornell Capital Partners
                L.P.
                (1)10.5
            
            Warrant
                to purchase 18,000,000 shares of Common Stock of Tech Laboratories,
                Inc.
                dated April 20, 2007 (1)10.6
            
            Registration
                Rights Agreement, dated April 20, 2007, by and between Tech Laboratories,
                Inc. and Cornell Capital Partners L.P.
                (1)




-52-




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)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)




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10.24
            
            Security
                Agreement, dated July 2, 2007, by and between Biodeisel Solutions,
                Inc.,
                Renewal Fuels, Inc. and Cornell Capital Partners L.P.
                (3)10.25
            
            Waiver
                of Penalties, dated November 13, 2007, between the Company and Montgomery
                Equity Partners, Ltd.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




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**SIGNATURE**





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: April
                8, 2008
            By:
            /s/ John
                KingJohn
                King,Chief
                Executive Officer and Chief Financial Officer
              (Principal
                Financial and Accounting Officer)




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