**U.S. SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

 

**FORM 10-QSB**

 

Quarterly Report Under

the Securities Exchange Act of 1934

 

For Quarter Ended: March 31, 2008

 

Commission File Number: 000-52742

 

**AMIWORLD, INC.**

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

 

**Nevada**

(State or other jurisdiction

of incorporation)

 

**20-5928518**

(IRS Employer ID No.)

 

**60 E. 42nd Street, Suite 1225**

**New York, NY 10165**

(Address of principal executive offices)

 

**(212) 557-0223**

(Issuer’s Telephone Number)

 

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

 

The number of shares of the registrant’s only class of common stock issued and outstanding as of May 13, 2007, was 21,808,110 shares.

 

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

 

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**PART I.**

 

**ITEM 1. FINANCIAL STATEMENTS**

 

 

 

 

AMIWORLD, INC.

 

TABLE OF CONTENTS

 

 

|   | Page No. |
|--------|----------|

 

|   | FINANCIAL STATEMENTS |
|--------|----------------------|

 

|   | Consolidated Balance Sheet | 1 |
|--------|----------------------------|---|

|   |  

Consolidated Statements of Operations |  

2 |
|--------|-----------------------------------------------|-----------|

|   |  

Consolidated Statements of Cash Flow |  

3 |
|--------|----------------------------------------------|-----------|

|   |  

Consolidated Statements of Stockholders’ Equity |  

4 |
|--------|---------------------------------------------------------------|-----------|

|   | Footnotes to the Consolidated Financial Statements | 5-8 |
|--------|----------------------------------------------------|-----|

 

 

 

2

 

 

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**AMIWORLD, INC.**

**CONSOLIDATED BALANCE SHEET**

 

|                                                                                                                            |   | **March 31st** |       |   |   | **December 31st** |   |       |   |
|---------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------|--------|--------|-------------------|--------|------------|--------|
|                                                                                                                            |   | **2008**       |       |   |   | **2007**          |   |       |   |
|                                                                                                                            |   | (Unaudited)    |       |   |   | (Audited)         |   |       |   |
| **ASSETS**                                                                                                                      |   |           |       |
| **Current Assets**                                                                                                              |   |           |       |   |   |              |   |       |   |   |   |
| Cash                                                                                                                            |   | $              | 2,379,304  |   |   |              | $      | 4,639,783  |   |   |   |
| Accounts Receivable                                                                                                             |   |           | 973,103    |   |   |              |   | 333,523    |   |   |   |
| Prepaid Expenses & Advance Payments                                                                                         |   |           | 1,583,609  |   |   |              |   | 1,435,521  |   |   |   |
| Inventory                                                                                                                       |   |           | 1,811,778  |   |   |              |   | 750,357    |   |   |   |
|                                                                                                                            |   |           | 6,747,794  |   |   |              |   | 7,159,184  |   |   |   |
| **Fixed Assets**                                                                                                                |   |           |       |   |   |              |   |       |   |   |   |
| Land & Buildings                                                                                                            |   |           | 16,111,275 |   |   |              |   | 12,592,401 |   |   |   |
| Machinery & Vehicles                                                                                                        |   |           | 282,500    |   |   |              |   | 157,821    |   |   |   |
| Equipment & Furniture                                                                                                       |   |           | 765,953    |   |   |              |   | 443,124    |   |   |   |
| Less: Accumulated Depreciation                                                                                                  |   |           | (494,525   | )      |   |              |   | (131,647   | )      |   |   |
|                                                                                                                            |   |           | 16,665,203 |   |   |              |   | 13,061,699 |   |   |   |
| **Other Assets**                                                                                                                |   |           |       |   |   |              |   |       |   |   |   |
| Deposits                                                                                                                        |   |           | 3,150      |   |   |              |   | 3,150      |   |   |   |
|                                                                                                                            |   |           | 3,150      |   |   |              |   | 3,150      |   |   |   |
| **TOTAL ASSETS**                                                                                                                |   | $              | 23,416,147 |   |   |              | $      | 20,224,033 |   |   |   |
|                                                                                                                            |   |           |       |   |   |              |   |       |   |   |   |
| **LIABILITIES & EQUITY**                                                                                                    |   |           |       |
| **Current Liabilities**                                                                                                         |   |           |       |   |   |              |   |       |   |   |   |
| Accounts payable and accrued expense                                                                                            |   | $              | 1,213,950  |   |   |              | $      | 1,297,648  |   |   |   |
| Corporate taxes payable                                                                                                         |   |           | —    |   |   |              |   | 2,157      |   |   |   |
| Due to affiliated companies (net)                                                                                               |   |           | 19,215     |   |   |              |   | —    |   |   |   |
|                                                                                                                            |   |           | 1,233,165  |   |   |              |   | 1,299,805  |   |   |   |
| **Minority Interests**                                                                                                          |   |           | 427,878    |   |   |              |   | 431,854    |   |   |   |
|                                                                                                                            |   |           |       |   |   |              |   |       |   |   |   |
| **Equity**                                                                                                                      |   |           |       |   |   |              |   |       |   |   |   |
| Common Shares: $.001 par value 175,000,000 shares authorized;21,808,110 (2008), 20,958,110 (2007) shares issued and outstanding |   |           | 21,808     |   |   |              |   | 20,958     |   |   |   |
| Additional paid in capital                                                                                                      |   |           | 22,893,165 |   |   |              |   | 21,034,977 |   |   |   |
| Deferred Compensation Expense - Options                                                                                         |   |           | (208,529   | )      |   |              |   | —    |   |   |   |
| Accumulated other comprehensive income                                                                                          |   |           | 1,804,661  |   |   |              |   | 35,954     |   |   |   |
| Accumulated deficit                                                                                                             |   |           | (2,756,001 | )      |   |              |   | (2,599,515 | )      |   |   |
|                                                                                                                            |   |           | 21,755,104 |   |   |              |   | 18,492,374 |   |   |   |
|                                                                                                                            |   |           |       |   |   |              |   |       |   |   |   |
| **TOTAL LIABILITIES & EQUITY**                                                                                              |   | $              | 23,416,147 |   |   |              | $      | 20,224,033 |   |   |   |

 

See accompanying notes to the consolidated financial statements.

 

1

 

3

 

 

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**AMIWORLD, INC.**

**CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME**

 

|                                                     |   |   |   |   |   | **Three Months Ended** |       |   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|------------------------|------------|--------|--------|
|                                                     |   |   |   |   |   | **March 31st**         |       |   |   |
|                                                     |   |   |   |   |   | **2008**               |       |   |   | **2007** |   |   |   |
|                                                     |   |   |   |   |   | (Unaudited)            |       |   |   | (Unaudited) |   |   |   |
| **Revenue**                                              |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Product Sales                                            |   |   |   |   |   | $                      | 2,286,423  |   |   |   | $ | — |   |   |   |
| Oil Trading Commission                                   |   |   |   |   |   |                   | 180,000    |   |   |   |   | — |   |   |   |
|                                                     |   |   |   |   |   |                   | 2,466,423  |   |   |   |   |   |   |   |   |
| **Cost of Goods Sold**                                   |   |   |   |   |   |                   | 1,851,569  |   |   |   |   | — |   |   |   |
| **Gross Profit**                                         |   |   |   |   |   |                   | 614,854    |   |   |   |   | — |   |   |   |
|                                                     |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| **General and Administrative Expenses**                  |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Compensation Expense - Options                           |   |   |   |   |   |                   | 69,509     |   |   |   |   | — |   |   |   |
| Depreciation                                             |   |   |   |   |   |                   | 253,990    |   |   |   |   | 4,939 |   |   |   |
| Legal and professional                                   |   |   |   |   |   |                   | 173,975    |   |   |   |   | 56,445 |   |   |   |
| Wage expense                                             |   |   |   |   |   |                   | 89,585     |   |   |   |   | 15,671 |   |   |   |
| Supplies and office expense                              |   |   |   |   |   |                   | 51,502     |   |   |   |   | 4,129 |   |   |   |
| Telephone and utilities                                  |   |   |   |   |   |                   | 48,804     |   |   |   |   | 345 |   |   |   |
| Rents                                                    |   |   |   |   |   |                   | 33,396     |   |   |   |   | 23,894 |   |   |   |
| Miscellaneous                                            |   |   |   |   |   |                   | 28,320     |   |   |   |   | 2,846 |   |   |   |
| Hotel, travel, and entertainment                         |   |   |   |   |   |                   | 26,021     |   |   |   |   | 509 |   |   |   |
| Advertising, marketing, and public relations             |   |   |   |   |   |                   | 7,085      |   |   |   |   | 8,034 |   |   |   |
| Listing, sponsor, and transfer agent fees                |   |   |   |   |   |                   | 2,213      |   |   |   |   | — |   |   |   |
|                                                     |   |   |   |   |   |                   | 784,400    |   |   |   |   | 116,812 |   |   |   |
| **Other Income and (Expense)**                           |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Interest Income                                          |   |   |   |   |   |                   | 1,630      |   |   |   |   | 6,490 |   |   |   |
| Miscellaneous Income                                     |   |   |   |   |   |                   | 7,455      |   |   |   |   | — |   |   |   |
|                                                     |   |   |   |   |   |                   | 9,085      |   |   |   |   | 6,490 |   |   |   |
| **Income (loss) before provision for income tax**        |   |   |   |   |   |                   | (160,461   | )      |   |   |   | (110,322 | ) |   |   |
| **Provision for income tax**                             |   |   |   |   |   |                   | —    |   |   |   |   | — |   |   |   |
| **Minority Interest net (Income) loss**                  |   |   |   |   |   |                   | 3,975      |   |   |   |   | 8 |   |   |   |
|                                                     |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| **Net Income (Loss)**                                    |   |   |   |   |   | $                      | (156,486   | )      |   |   | $ | (110,314 | ) |   |   |
| **Other Comprehensive Income (Loss) – Net of Tax** |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Foreign currency translation gains (losses)              |   |   |   |   |   |                   | 1,768,707  |   |   |   |   | 37,086 |   |   |   |
| **Comprehensive Income (Loss)**                          |   |   |   |   |   | $                      | 1,612,221  |   |   |   | $ | (73,228 | ) |   |   |
|                                                     |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Weighted average (loss) per share                        |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| (Basic and fully diluted)                                |   |   |   |   |   | $                      | (0.01      | )      |   |   | $ | (0.02 | ) |   |   |
|                                                     |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| Weighted average number of                               |   |   |   |   |   |                   |       |   |   |   |   |   |   |   |   |
| common shares outstanding                                |   |   |   |   |   |                   | 21,547,121 |   |   |   |   | 5,394,672 |   |   |   |

See accompanying notes to the consolidated financial statements.

2

4

 

 

----

**AMIWORLD, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

 

|                                                                                                                       |   |   |   | **Three Months Ended** |       |
|----------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|------------------------|------------|
|                                                                                                                       |   |   |   | **March 31**           |       |
|                                                                                                                       |   |   |   | **2008**               |       |   |   | **2007** |   |
|                                                                                                                       |   |   |   | (Unaudited)            |       |   |   | (Unaudited) |   |
| **CASH PROVIDED BY (USED FOR):**                                                                                           |   |   |   |                   |       |   |   |   |   |   |   |
| **Operating Activities**                                                                                                   |   |   |   |                   |       |   |   |   |   |   |   |
| Net (Loss)                                                                                                                 |   |   |   | $                      | (156,486   | ) |   |   | $ | (110,314 | ) |
| Items not involving an outlay of funds:                                                                                    |   |   |   |                   |       |   |   |   |   |   |   |
| Depreciation and amortization                                                                                              |   |   |   |                   | 253,990    |   |   |   |   | 2,950 |   |
| Compensation Expense - Options                                                                                             |   |   |   |                   | 69,509     |   |   |   |   |   |   |
| Minority Interest in net income                                                                                            |   |   |   |                   | 3,975      |   |   |   |   | (8 | ) |
|                                                                                                                       |   |   |   |                   | 170,988    |   |   |   |   | (107,372 | ) |
| Change in non-cash operating balances                                                                                      |   |   |   |                   |       |   |   |   |   |   |   |
| Accounts Receivable                                                                                                        |   |   |   |                   | (606,206   | ) |   |   |   | — |   |
| Prepaid expenses & advance payments                                                                                    |   |   |   |                   | 4,555      |   |   |   |   | (65,993 | ) |
| Inventory                                                                                                                  |   |   |   |                   | (981,354   | ) |   |   |   | — |   |
| Accounts payable and accrued expense                                                                                       |   |   |   |                   | (178,167   | ) |   |   |   | 2,026 |   |
| Due to affiliated companies (net)                                                                                          |   |   |   |                   | 12,352     |   |   |   |   | 9,534 |   |
| Net cash used for operating activities                                                                                     |   |   |   |                   | (1,577,832 | ) |   |   |   | (161,805 | ) |
| **Investing Activities**                                                                                                   |   |   |   |                   |       |   |   |   |   |   |   |
| Purchase of fixed assets                                                                                                   |   |   |   |                   | (2,560,161 | ) |   |   |   | (304,121 | ) |
| Pre-operative spending                                                                                                     |   |   |   |                   | —    |   |   |   |   | (108,888 | ) |
| Net cash used for investing activities                                                                                     |   |   |   |                   | (2,560,161 | ) |   |   |   | (413,009 | ) |
| **Financing Activities**                                                                                                   |   |   |   |                   |       |   |   |   |   |   |   |
| Issuance of common stock                                                                                                   |   |   |   |                   | 1,581,000  |   |   |   |   | 2,501,900 |   |
| Net cash provided from financing activities                                                                                |   |   |   |                   | 1,581,000  |   |   |   |   | 2,501,900 |   |
|                                                                                                                       |   |   |   |                   |       |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                                                    |   |   |   |                   | 296,514    |   |   |   |   | 23,876 |   |
|                                                                                                                       |   |   |   |                   |       |   |   |   |   |   |   |
| **Increase (decrease) in cash**                                                                                            |   |   |   |                   | (2,260,479 | ) |   |   |   | 1,950,962 |   |
|                                                                                                                       |   |   |   |                   |       |   |   |   |   |   |   |
| Cash, beginning of year                                                                                                    |   |   |   |                   | 4,639,783  |   |   |   |   | 1,454,648 |   |
| Cash, end of the period                                                                                                    |   |   |   | $                      | 2,379,304  |   |   |   | $ | 3,405,610 |   |
|                                                                                                                       |   |   |   |                   |       |   |   |   |   |   |   |
| Schedule of Non-Cash Investing and Financing Activities                                                                    |   |   |   |                   |       |   |   |   |   |   |   |
| In January 2008 the Company issued options worth $1,490,000 in exchangefor services to be performed evenly throughout 2008 |   |   |   | $                      | 278,038    |   |   |   |   | — |   |
|                                                                                                                       |   |   |   |                   |       |   |   |   |   |   |   |
| Supplemental Disclosure                                                                                                    |   |   |   |                   |       |   |   |   |   |   |   |
| Cash paid for interest                                                                                                     |   |   |   | $                      | —    |   |   |   | $ | — |   |
| Cash paid for income taxes                                                                                                 |   |   |   | $                      | —    |   |   |   | $ | — |   |

 

See accompanying notes to the consolidated financial statements.

 

3

 

5

 

 

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**AMIWORLD, INC.**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY**

 

 

        

|                                         |        |              |        |        |        |        |        |         |        |        |        |        |        |            |        |        |        |        |          |            |        |        |        |               | Deferred     |        |        |        |        |               |        |        |        |        |        |            |        |
|-----------------------------------------|--------|--------------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|------------|--------|--------|--------|--------|----------|------------|--------|--------|--------|---------------|--------------|--------|--------|--------|--------|---------------|--------|--------|--------|--------|--------|------------|--------|
|                                         |        |              |        |        |        |        |        |         |        |        |        |        |        |            |        |        |        |        |          |            |        |        |        |               | Compensation |        |        |        |        | Accum. Other  |        |        |        |        |        |            |        |
|                                         |        | Common Stock |        |        |        |        |        | Paid In |        |        |        |        |        | Accum.     |   |        |        |        | Expense- |            |        |        |        | Comprehensive |              |        |        |        |        | Shareholders' |        |
|                                         |        | Shares(1)    |        |        |        |        |        | Amount  |        |        |        |        |        | Capital    |        |        |        |        |          | Deficit    |        |        |        |               | Options      |        |        |        |        | Income/(Loss) |        |        |        |        |        | Equity     |        |
| Balance at December 31, 2007            |   | 20,958,110   |   |   |   |   | $      | 20,958  |   |   |   |   | $      | 21,034,977 |   |   |   |   | $        | (2,599,515 | )      |   |   | $             | —      |   |   |   | $      | 35,954        |   |   |   |   | $      | 18,492,374 |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Cash Proceeds from issuance of stock    |   | 850,000      |   |   |   |   |   | 850     |   |   |   |   |   | 1,580,150  |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   | 1,581,000  |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Deferred Compensation Expense - Options |   |         |   |   |   |   |   |    |   |   |   |   |   | 278,038    |   |   |   |   |     |       |   |   |   |          | (278,038     | )      |   |   |   |          |   |   |   |   |   | —    |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Deferred Compensation Expense           |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          | 69,509       |   |   |   |   |          |   |   |   |   |   | 69,509     |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Foreign current translationgain (loss)  |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   | 1,768,707     |   |   |   |   |   | 1,768,707  |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Net Income (loss) for the period        |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     | (156,486   | )      |   |   |          |         |   |   |   |   |          |   |   |   |   |   | (156,486   | )      |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |
| Balance at March 31, 2008 (Unaudited)   |   | 21,808,110   |   |   |   |   | $      | 21,808  |   |   |   |   | $      | 22,893,165 |   |   |   |   | $        | (2,756,001 | )      |   |   | $             | (208,529     | )      |   |   | $      | 1,804,661     |   |   |   |   | $      | 21,755,104 |   |
|                                    |   |         |   |   |   |   |   |    |   |   |   |   |   |       |   |   |   |   |     |       |   |   |   |          |         |   |   |   |   |          |   |   |   |   |   |       |   |

 

1) As restated for a 10 for 1 forward stock split on March 30, 2007

 

See accompanying notes to the consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

4

 

6

 

 

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| **1)** | **Nature of organization**  |
|--------|----------------------------------|

 

Amiworld, Inc. (the “Company”) was incorporated in the State of New York, U.S.A. on October 30, 1998 as Amuru International Inc. The Company changed its name on April 28, 1999 by filing an amendment to the certificate of incorporation. The Company on November 20, 2006 formed a Nevada corporation by the same name and conducted a private placement. On March 30, 2007 The Nevada corporation            acquired all outstanding shares of the New York corporation in exchange for stock and the New York corporation was subsequently dissolved effectively re-incorporating the Company to Nevada and recapitalizing the Company with a new share structure.

 

The primary objective of the Company has been revised and the Company has now placed emphasis on developing its energy and energy related businesses. The primary divisions of the Company are the operation of a bio-diesel factory in Colombia and a petroleum refinery in Colombia. Additional operations will include the acquisition of oil tankers and the brokerage of oil related products in South America,            Central America, the Caribbean, and the United States. The Company continues to have other investment objectives, such as the pursuit of real estate, managed futures, technology and retail firms, and any other investments that offer short term gains that may be pursued in the future.

 

The Company in March 2007 also acquired a subsidiary, Odin Energy Santa Marta Corporation S.A., in a transaction accounted for as a common control acquisition. The results of operations of Amiworld, Inc.-New York have been consolidated with those of Amiworld, Inc.-Nevada from its inception November 17, 2006 forward and with those of Odin Energy Santa Marta Corporation S.A. from its inception September            11, 2006 forward. In addition, the Company consolidated the activities of its subsidiary, Odin Petroleum, Inc.

 

The Company in April 2007 also acquired a 45% interest in Great Voyages Co., Ltd., a New York corporation owned by JASB of New York Corp., a New York corporation owned by our CEO and President, for the purpose of acquiring ships to transport goods, which upon commencement of this business will be limited to oil shipments. We issued an aggregate of 45,000 shares of our Common Stock for this 45% interest.            The 45% acquisition of Great Voyages is treated as an investment accounted for under the equity method.

 

Odin Petroil S.A. was incorporated in Colombia on March 6, 2007. On December 10, 2007, in an acquisition classified as a transaction between parties under common control, Amiworld, Inc. acquired 94.5% of the outstanding shares of Odin Petroil S.A. (7,814,772 shares of Amiworld, Inc. were issued for 7,843,500 shares of Odin Petroil S.A.), making Odin Petroil S.A. a majority owned subsidiary of Amiworld,            Inc. The results of operations of Amiworld, Inc. and Odin Petroil S.A. have been consolidated from Odin Petroil S.A.’s inception March 6, 2007 forward.

 

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| **(2)** | **Significant accounting policies** |
|---------|-------------------------------------|

 

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods            have been made and are of a recurring nature unless otherwise disclosed herein. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

 

|   | (a) | Principles of Consolidation |
|--------|-----|-----------------------------|

 

The accompanying consolidated financial statements include the accounts of Amiworld, Inc. and its majority owned subsidiaries Odin Energy Santa Marta Corporation S.A., Odin Petroil S.A. and Odin Petroleum, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

 

|   | (b) | Long-Lived Assets |
|--------|-----|-------------------|

 

In accordance with Statement of Financial Accounting Standard 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company regularly reviews the carrying value of intangible and other long-lived assets for the existence of facts or circumstances, both internally and externally, that may suggest impairment. If impairment testing indicates a lack of            recoverability, an impairment loss is recognized by the Company if the carrying amount of a long-lived asset exceeds its fair value.

 

|   | (c) | Revenue recognition |
|--------|-----|---------------------|

 

 

Revenue is recognized by the Company as earned under contract terms, in general upon shipment of ordered fuel products.

 

|   | (d) | Use of estimates |
|--------|-----|------------------|

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the balance sheet, as well as reported amounts of income and expenses during the fiscal            year. Actual results could differ from those estimates.         

 

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|   | (e) | Cash and cash equivalents |
|--------|-----|---------------------------|

 

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

 

|   | (f) | Inventories |
|--------|-----|-------------|

 

Inventories, consisting of petroleum based products, are stated at the lower of cost or market (average units of production method). Costs capitalized to inventory include the purchase price, transportation costs, processing costs, and any other expenditures incurred in bringing the goods to the point of sale. Costs of goods sold include those expenditures capitalized to            inventory.

 

|   | (g) | Fixed assets |
|--------|-----|--------------|

 

Propertyand equipment acquired is stated at cost. Depreciation is calculated on the straight line method based on the useful life of the assets with lives of 15-20 years for buildings, 5 years for machinery and vehicles, and 5-10 years for equipment and furniture.

 

|   | (h) | Financial instruments |
|--------|-----|-----------------------|

 

The carrying value of the Company’s financial instruments, as reported in the accompanying balance sheets, approximates fair value.

 

|   | (i) | Construction costs |
|--------|-----|--------------------|

 

The Company capitalizes costs associated with the construction of its bio-diesel plant and petroleum refinery.

 

|   | (j) | Foreign exchange |
|--------|-----|------------------|

 

Monetary assets and liabilities expressed in foreign currencies are translated into U.S. dollars at year end rates. Transactions in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

 

Realized exchange gains or losses on transactions during the year are credited or charged to the profit and loss account. Unrealized exchange gains or losses arising on the translation of foreign currency monetary assets and liabilities are credited or charged to the profit and loss account.

 

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|   | (k) | Net income (loss) per share |
|--------|-----|-----------------------------|

 

Thenet income (loss) per share is computed by dividing the net income ( loss ) by the weighted average number of shares of common outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings            or decrease loss per share.

 

 

|   | (l) | Comprehensive income (loss) |
|--------|-----|-----------------------------|

 

The Company accounts for comprehensive income (loss) under Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS 1230”). SFAS 130 establishes standards for reporting and display of comprehensive income and its components. The foreign currency translation gains (losses) resulting from the translation of the financial statements            of Odin Energy Santa Marta, Ltd. and Odin Petroil, Ltd., expressed in Columbian pesos, to United States dollars are reported as Other Comprehensive Income (Loss) in the Statement of Operations and as Accumulated Other Comprehensive Income (Loss) in Stockholders’ Equity.

 
|   | (m) | Products and services, geographic areas and major customers |
|--------|-----|-------------------------------------------------------------|

 

The Company derives revenue from sales of petroleum and palm oil based products, although it does not currently separate the sales of various products into operating segments. The Company’s sales are external and international.

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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

 

OVERVIEW

 

          We were incorporated under the laws of the State of Nevada on November 20, 2006. In March 2007, we merged with a predecessor company, Amiworld, Inc., a New York corporation (“Amiworld – NY”), for the purposes of affecting a reincorporation in the state of Nevada. We issued an aggregate of 372,000 shares            of our Common Stock to the shareholders of Amiworld – NY in exchange for all of its issued and outstanding shares. We were the surviving entity in this merger. Following the closing of this merger, in March 2007, we engaged in a forward split of our Common Stock whereby we issued ten (10) shares of our Common Stock for every one (1) share then issued and outstanding. All references in this Report to our issued and outstanding Common Stock are provided on a post-forward split            basis, unless otherwise indicated.

 

Our predecessor company, Amuru International Inc., was incorporated in the State of New York on October 30, 1998. On April 28, 1999, Amuru International Inc. amended its Certificate of Incorporation to change its name to Amiworld, Inc. (“Amiworld – NY”). On May 12, 1999, Amiworld – NY’s Common Stock was listed on the Bermuda Stock Exchange (BSX) under            the symbol “AMI-BH.” Amiworld – NY was formed with a very narrow investment objective of acquiring resort properties in the eastern United States. While Amiworld – NY was seeking out appropriate resort properties, it also sought out alternative investments that could fulfill its investment objectives. Seeking diversity and desiring to get operations in place, Amiworld – NY made the decision to invest in non-resort investments. Unfortunately, these            business ventures proved unsuccessful.

 

As a result, by 2004, Amiworld – NY had exhausted its available capital and management recognized the company had lost its viability. Amiworld – NY fell into default on its obligations to the BSX and with New York State and became an inactive corporation. Amiworld – NY regained its active status with the BSX and worked on resolving its default status with New            York. In September 2005, Amiworld – NY received $200,000 in a private

 

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offering and, in December 2005, it received another $200,000 in a private offering from its then principal shareholders. This private capital was used to settle its existing debts and provided sufficient capital to cover operational costs. Amiworld – NY hired additional staff to explore new business ventures and as a result found several new developing businesses in which to invest. In December            2005, Amiworld – NY changed its business plan to invest in a variety of new investments including, but not limited to, shipping, technology, financial, and retail. We also reincorporated Amiworld- NY as a Nevada corporation.

 

As of the date of this Report we have four operating subsidiary companies engaged in the production of biodiesel, operating a petroleum refinery, oil reselling and shipping. See “PLANOFOPERATION” below for a discussion of these endeavors.

 

RESULTSOFOPERATIONS

 

*Comparison of Results of Operations for the three months ended March 31, 2008 and 2007*

 

          During the three month period ended March 31, 2008, we generated revenues of $2,466,423, including $2,286,423 from sale of diesel and biodiesel products and $180,000 from oil trading commissions. Cost of goods sold was $1,851,569. We did not generate any revenues during the three month period ended March 31,            2007.

 

          Our general and administrative expenses increased by $667,588, from $116,812 during the three months ended March 31, 2007, to $784,400 for the three months ended March 31, 2008, primarily as a result of our commencement of operations. Our general and administrative expense rose in virtually all categories, including: (i)            during January 2008 we issued 1,490,000 options for services to be performed equally throughout 2008 resulting in the recognition of a compensation expense of $69,509; (ii) increases of $117,530 in legal, accounting and professional fees, which increased as a result of costs incurred relating to our now being a reporting company under the Securities Exchange Act of 1934, as amended; (iii) wage expense increased by $73,914 due to commencement of our operations; (iv) depreciation            increased by $249,051 due to the addition of plant depreciation, (v) supplies and other office costs increased by $47,373; (vi) telephone and utilities increased by 48,459; and (vii) hotel, travel, and entertainment increased $25,512. We expect that our general and administrative expenses will continue to rise during our 2008 fiscal year as a result of our having a full year of operations.

 

          As a result, we incurred a net loss of $156,486 during the three months ended March 31, 2008 (approximately $.01 per share), compared to a net loss of $110,314 during the three months ended March 31, 2007 (approximately $0.02 per share), when we had no revenues and were engaged in the development of our biodiesel plant.            While no assurances can be provided, we expect that we will become profitable during our fiscal year ended December 31, 2008.

 

          Because we did not generate revenues during our prior two fiscal years, following is our current plan of operation.

 

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PLANOFOPERATION

 

We are a holding company that is currently operating through four subsidiary companies designed to complement each other. All four divisions principally focus on the production, acquisition and resale, and shipping of fuel related products. These operations include the following:

 

|   | **•** | **Biodiesel Production –**We completed the development of a biodiesel plant in the fourth calendar quarter of 2007. Our plant is located in Santa Marta, Magdaleno, Colombia. See*“Biodiesel Plant,”*below. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | **Petroleum Diesel Production –**In December 2007 we acquired an operational petroleum diesel plant from an affiliated entity. This plant is located adjacent to our biodiesel plant in Colombia. See “*Petroleum Refinery*,” below. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | **Oil Resell Business**– We are engaged in the purchase of oil throughout South America and re-selling the oil in Central America and the Caribbean. In July 2007, we successfully completed our initial endeavor in this regard and we are generating a monthly gross profit of $60,000 from these operations. While no                            assurances can be provided, we will be attempting to develop other routes in the future. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | **Shipping Business**– This division will acquire or charter a number of ships. Initially these ships will focus on shipments of crude oil and diesel products, but may be expanded in the future. We have leased one ship and we have identified a number of other future ships to charter and/or purchase. It is anticipated                            that ships will be acquired in the 500 to 2,000 ton class. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

***Biodiesel Plant***

 

On November 30, 2006, we closed on the acquisition of land located in Santa Marta, Magdaleno, Colombia, the site of our biodiesel plant. This land consists of an aggregate of 40,010 square meters (9.9 acres). We paid $452,903 ($1,041,675,000 pesos) to acquire this property. We paid cash for this acquisition.

 

On November 16, 2006, we executed an agreement with CM Bernardini S.R.L., Rome Italy (“Bernardini”), wherein Bernardini agreed to build our biodiesel and palm oil refining plant for a total price of two million sixty three thousand five hundred (€2,063,500) Euro (approximately $2.7 million US). The plant has a production capacity of 120,000 liters (31,704 gallons)            per day.

 

The plant and palm oil deacification plant was constructed at Bernardini’s location in Italy and sent via ship to our Colombian location. We sent two of our representatives to Italy to supervise the manufacture of the reactor and sedimentation tanks of the plant and make all necessary tests to verify that the engineering specifications and characteristics are consistent with            the information we provided to Bernardini. We were responsible for the costs of shipping from

 

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Italy, which cost approximately $90,000. The agreement provided for Bernardini to provide training on the operation and operability of the plants to our employees, as well as to perform technical trials to insure that all aspects of the plants are performing properly. The agreement contained certain guarantees provided by Bernardini, including a mechanical guarantee, guaranteeing the equipment for the            anticipated use against design and execution defects for a period of 12 months from January 28, 2008, the date we commenced start up operations, but in no event longer than 18 months from the date of last shipment (December 10, 2007). Subsequently, we agreed with Bernardini to allow them to purchase an insurance policy insuring the equipment, rather than the mechanical guarantee. This policy is in effect until August 30, 2008, with total coverage of €2,090,000. In addition, the            agreement guarantees a production capacity of 120 thousand liters per day of biodiesel, with Bernardini to replace any and all inoperable parts or manufacturing defects at no cost to us for a period of 12 months following the plant’s startup date.

 

Bernardini is a thirty year old internationally recognized builder of plants and technologies. During 2005 and 2006 it undertook and completed 19 different projects on behalf of its clients in 10 different countries, including three biodiesel plants in Colombia, of which one is still in the setup phase, each utilizing palm oil as its principal feedstock. Of these 19 plants, eight            utilize palm oil as their feedstock. It had 48 additional contracts in place to build plants for clients through the end of 2007, including 17 biodiesel plants throughout the world, including five biodiesel plants in Colombia.

 

The agreement with Bernardini provided for all necessary equipment for oil pre-treatment and refining. In addition, we also needed to construct storage tanks for both the raw and completed materials. In November 2006 we entered into a contract with a local contractor to provide these tanks. This agreement provided for delivery of a total of nine iron storage tanks, including six            560 ton capacity tanks, two 87 ton capacity tanks and one 450 ton capacity tank, for a total turnkey purchase price of $137,476, including manufacturing, assembly and installation. We were responsible for providing the raw materials that cost approximately $222,945. The tanks were completed in their entirety on November 15, 2007.

 

The plant was completed in the fourth calendar quarter of 2007, with net cash inflows commencing within thirty days after opening. The cost to build our biodiesel plant was $9,062,538. These costs included the cost of the land, including all ancillary costs, which was $489,603. The largest portion of the cost was the biodiesel plant and its respective shipping and installation            components, which was $3,035,273. Building costs in Colombia were $2,068,002. The storage tanks cost $674,650. During January 2008 we automated the plant to enable full capacity at a cost of 1,795,114. All other costs including the laboratory, fire systems, and other infrastructure were $999,896. Costs were paid from the funds derived from our December 2006 private offering. We also received additional funding of $2 million in September 2007 from JASB to cover the remaining plant            costs. This loan, along with other loans made to us from affiliated companies, was subsequently converted into shares of our Common Stock. See “LIQUIDITYANDCAPITALRESOURCES,” below.

 

Based upon advice of technicians that we have consulted with, the plant will be capable of expansion to approximately 360,000 liters a day within three years of operation with the

 

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addition of new processing equipment. We intend to expand to the 360,000 liters with the acquisition of additional equipment in 2008, utilizing proceeds derived from operations to cover the cost of this new equipment, as well as the proceeds that we have received to date and the additional proceeds we hope to obtain from our current private offering. See “LIQUIDITYANDCAPITALRESOURCES.” This equipment includes the biodiesel plant and all related equipment necessary for processing the additional fuel production. The anticipated cost for this expansion will be approximately $4.8 million and is expected to take approximately eight months to complete from inception. We have estimated that it will take approximately three years to reach full production capacity of 360,000 liters            (96,000 gallons) daily. Once full capacity is reached, our plant is expected to produce 108,000 tons (28.8 million gallons) annually. There can be no assurances that we will have sufficient capital available to undertake this expansion.

 

We intend to develop additional plants in the future based on this model plant and located on sites meeting similar criteria. However, it is also anticipated other criteria will be used in the future to bring the biodiesel to major markets, such as North America and Europe. Since we will utilize a multi-feedstock system, we can use alternative feedstock depending on where we locate            these prospective plants. If we are successful, our overall plan of expansion includes the development of one to three plants a year in the first three years and two to five plants a year thereafter so long as it is economically feasible to do so and demand continues to exceed supply. We can provide no assurances that we will be successful in meeting these objectives.

 

***Petroleum Refinery***

 

The land we purchased for our biodiesel plant was larger than we needed for our intended purposes. Of the approximately 9.9 acres acquired, we utilized less than half for the development of our biodiesel plant. As a result, JASB of New York Corp. (“JASB”), one of our principal shareholders and a company owned by our CEO and President, constructed a petroleum refinery            adjacent to the biodiesel plant. JASB undertook this endeavor as a result of our limited financial abilities. The plant was constructed by Odin Petroil, S.A., a Colombian corporation (“Odin Petroil”), a 94.5% owned subsidiary of JASB. From April 2007 through December 10, 2007, we leased this property to JASB at a rate of approximately $4,550 per month (10,000,000 pesos), which is consistent with applicable lease rates in Santa Marta, Colombia. Commercial lease fees in            Colombia are based by law in an amount equal to 1% of the appraised value of the relevant land.

 

On December 10, 2007, in a transaction classified in our financial statements included herein as a common control acquisition, we acquired JASB’s entire ownership interest in Odin Petroil, in exchange for 7,814,772 shares of our “restricted” Common Stock. The consideration for the acquisition of Odin was determined based upon an independent valuation of Odin.            Pursuant to common control acquisition accounting, our operations and Odin Petroil have been combined from the date of inception of Odin Petroil (March 6, 2007).*See*“PART I, ITEM 1, FINANCIAL STATEMENTS.” We originally planned to acquire Odin in exchange for cash, but subsequently elected to issue equity rather than pay cash in order to conserve our capital.

 

The site is approximately 20,000 square feet. As of the date of this Report, the refinery is operational. Odin Petroil constructed this oil refinery and concluded construction operations on

 

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August 27, 2007. On October 1, 2007 the refinery completed all of its testing, staff training, and began its refining operations. During October 2007, Odin Petroil engaged in production activities, but did not begin generating revenues until November 2007. During November 2007 through December 10, 2007, the pre-acquisition period, Odin Petroil generated gross revenues of $133,398 from the            refinery’s operations. From December 10, 2007 through December 31, 2007, the post-acquisition period, Odin Petroil generated gross revenues of $947,269. During this period the refinery operated at approximately 50% of its production capacity. Through automation of the plants refining ability, the plant became capable of producing 100% of its capacity in February 2008.

 

The refinery, when completed in its entirety, will be capable of producing 1,200,000 BBI (50.4 million gallons). In order to minimize front-end expenses, equipment for only thirty percent of this production has been purchased and installed, with the remaining equipment to be purchased within the next 12 months. As a result, the initial refinery production capacity is 360,000 BBI            (15.1M gallons). We are in the process of making minor modifications to the oven and processing tower which will enable us to increase capacity by 50% from approximately 1,000 barrels per day to 1,500 barrels per day. As a result our new production capacity will increase to approximately 540,000 BBI (22.6M gallons).

 

We believe this refinery will provide diversification of our operations and provide an opportunity to produce blended biodiesel of varying levels. By having the facilities to produce this fuel blend we believe we will be in a better position to further capitalize on diesel sales in the Colombian market place. We are examining the economic feasibility of blending the fuels as the            Colombian government is currently requiring a wholesale distributor license to perform this function, which could require us setting up retail gas stations.

 

JASB paid the entire construction costs for the refinery. The total cost of developing the refinery (excluding the land) paid by JASB was as follows:

 

| Refinery Plant Construction Expense |   |   |   |   |   |   |   | $      |   |   | 1,437,360 |   |
|-------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
| Equipment                           |   |   |   |   |   |   |   |   |   |   | 1,395,703 |   |
| Storage Tanks                       |   |   |   |   |   |   |   |   |   |   | 905,343   |   |
| Other Incidental Equipment          |   |   |   |   |   |   |   |   |   |   | 1,879,130 |   |
| TOTAL INVESTMENT                    |   |   |   |   |   |   |   | $      |   |   | 5,617,536 |   |

 

As a result of this acquisition, in addition to having the capacity to produce two distinct types of fuels we also can produce blended fuels. Colombia recently passed legislation requiring petroleum diesel fuel to be blended with biodiesel fuel on a 95:5 basis. The United States and other countries are increasingly working toward a mixture of 80:20 due to environmental benefits.            Having the internal capacity to blend fuels is expected to give us a significant competitive advantage by eliminating the “middle-man.” Specifically, we will now have the ability to blend our own fuel, thus eliminating having the oil refineries perform this task and add a mark-up to their price for the blended fuel. There are no assurances that the ability to blend fuels will result in any competitive advantages.

 

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We installed an Automatic Atmospheric Refining Plant which provides for fractionated distillation, designed to meet operational needs and comply with all environmental regulations, including both Colombian and International standards related to refining, storage, transportation, products certification, spills prevention measures, firefighting system measures and standards and            effluents controls. We also installed monitoring systems at this plant to allow managers and officers to observe activity and an automated system to measures the weight of each cargo. Also, a laboratory was built on this site that will have state-of-the-art equipment to guarantee quality control.

 

We are hoping to construct additional tanks at the port zone for storage and shipping purposes for our diesel and petroleum products. We are currently in discussions with the port zone and they have provided us a plan to construct a storage area exclusive for fuel storage. We have sent a letter requesting inclusion in the project and we are expecting to receive information from the            Port Society as to the location and the other necessary construction issues that will be made for piping and pumping purposes. Our current plan is to construct tanks with an approximately capacity of 600,000 barrels per month. We have not yet received estimates or approval from the port authority and cannot currently estimate the total project costs.

 

***Oil Resale Business***

 

Effective July 5, 2007, Odin Petroleum entered into a 12 month contract to transport oil with Petroleos Panamerican. The relevant agreement provides for the transportation of 300,000 gallons of oil monthly from Pointe-a-Pierre in Trinidad & Tobago to Cristobal, Panama. The shipments will continue on a monthly basis through June 2008. The oil is loaded monthly onto a tanker and            the delivery is completed within an expected 21 days. The agreement provides for a fixed commission of $.20 per gallon and as a result we receive a fixed profit of $60,000 per month regardless of the amount of sales and related oil and shipping costs and will continue to receive this profit through June 2008. We are negotiating several new shipping arrangements and are confident that additional shipping arrangements will be added starting in the second or third quarter of this            year.

 

Odin Petroleum is also acting as a sales agent for both Odin Energy and Odin Petroil. As a result, Odin Petroleum will receive 2.5% of all sales made by these two entities in exchange for providing marketing and fund settlement. During the three month period ended March 31, 2008, Odin Petroleum had collected revenues of $58,650 from sales commissions related to Odin Energy and Odin            Petroil.

 

Odin Petroleum is currently focused principally on generating sales to cover the entire production of both plants. In addition we are continuing to seek out opportunities to develop additional trade routes and expand its transportation business.

 

***Shipping Business***

 

We are also diversifying our business activities in a synergistic manner by developing the business plan of Great Voyages Co., Ltd. (“Great Voyages:”) that is developing a cargo shipping business. The first part of the business is to charter ships for the shipment of oil and related

 

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petroleum products within the Caribbean region. We have already begun shipping oil. In February 2008, Great Voyages entered into a lease agreement to charter a cargo vessel with Serport, S.A., a commercial partnership domiciled in Colombia. The lease provides for a monthly lease payment of 63,000,000 Colombia Pesos (approximately US$30,800) and is in effect 24 months from the time we take possession            of the ship. We have been assigned a shipping dock and are waiting for port approval to take possession of the ship. We anticipate we will take possession in late May or early June 2008. Great Voyages will use the vessel to transport fuel produced by Odin Energy and Odin Petroil, as well as to provide shipping for arranged oil-resells by Odin Petroleum. Great Voyages, in which we own a 45% interest, currently receives 10% of the transportation costs from Odin Petroleum as a result            of the Petroleos Panamerican arrangement, which generates a fixed profit of $3,600 monthly. Our portion will be approximately $1,620. This profit will increase as a result of our possession of our chartered barge, but will vary depending on the number of shipments we complete on a monthly basis.

 

          The second part of the business will be the purchase of small oil tankers to engage in the trade of oil through the free trade zone of Panama and primarily focus on shipping oil from South American countries through this free trade zone. We have also been developing the business of purchasing and re-selling of oil from            Trinidad & Tobago and Venezuela to Panama. This business is being undertaken by our subsidiary, Odin Petroleum Corporation, a New York corporation (“Odin Petroleum”). The oil is purchased and sold through pre-arranged buyers and sellers. Odin is also undertaking all sales of the products that are produced in our biodiesel plant.

 

Future charters will range in price, depending on the size of shipments, from approximately $50,000 for 200,000 gallon shipments. Higher volume shipments will require larger ships with bigger crews and will incur other costs, which will increase the cost of each charter. However, the cost per shipping unit will decrease with larger volumes. Because we intend to initially ship our            own product, the capital outlay is expected to be nominal, as we believe we will be able to defer any payments due until delivery, thus allowing us to utilize the funds received from delivery of the product to pay for the cost of the chartered ship.

 

We intend to seek out other suitable ships to purchase for our proposed oil and fuel products shipping business. In the interim, we intend to charter additional suitable ships to conduct our oil reselling business.

 

**LIQUIDITYANDCAPITALRESOURCES**

 

At March 31, 2008, we had $2,379,304 in cash.

 

In December 2006, we commenced a private offering of our Common Stock, whereby we sold an aggregate of 346,190 shares of our Common Stock to 307 investors, none of whom are residents of the United States, at a price of $10.00 per share, for aggregate proceeds of $3,461,900. Following the closing of this private offering, in March 2007, we engaged in a forward split of our Common            Stock whereby we issued ten (10) shares of our Common Stock for every one (1) share then issued and outstanding.

 

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Historically, we engaged in limited debt financing through affiliated companies. Such affiliated companies currently engage in offshore banking and other financial services giving them access to significant financial resources. While there is no relevant written agreement, we had an ongoing ability to borrow funds on an as-needed basis. These loans were temporary and carried no            interest or repayment terms. JASB, an affiliated company and one of our principal shareholders, and other entities owned and controlled by Mr. Saito, our CEO and President, made similar loans to us in the past.

 

          Effective October 29, 2007, we issued an aggregate of 3,156,428 shares of our Common Stock in exchange for forgiveness of outstanding loans in the aggregate amount of $3,156,428. The names of those entities receiving the shares and the amount of the loans that were converted are as follows:

 

| **Name**                               | **Date of Loan**       |                                      | **Amount of Loan**                    |                                  | **No of Shares**                  |
|----------------------------------------|------------------------|-------------------------------------------|---------------------------------------|---------------------------------------|-----------------------------------|
|                                   |                   |                                      |                                  |                                  |                              |
| JASB of New York Corporation           | Various Pre-2007 Loans |                                      | $ 106,794.00      |                                  | 106,794       |
|                                   | September 5, 2007      |                                      | $1,500,000.00     |                                  | 1,500,000     |
|                                   | September 28, 2007     |                                      | $ 500,000.00      |                                  | 500,000       |
| **Total-JASB of New York Corporation** |                   |                                      | $2,106,794.00     |                                  | 2,106,794     |
|                                   |                   |                                      |                                  |                                  |                              |
| EBOA, Ltd.                             | Various Pre-2006 Loans |                                      | $ 243,999.00      |                                  | 243,999       |
|                                   | October 4, 2006        |                                      | $ 400,000.00      |                                  | 400,000       |
| **Total-EBOA, Ltd.**                   |                   |                                      | $ 643,999.00      |                                  | 643,999       |
|                                   |                   |                                      |                                  |                                  |                              |
| BO Atlantic, Ltd.                      | Various Pre-2006 Loan  |                                      | $ 5,635.00        |                                  | 5,635         |
|                                   | October 5, 2006        |                                      | $ 400,000.00      |                                  | 400,000       |
| **Total-BO Atlantic, Ltd.**            |                   |                                      | $ 405,635.00      |                                  | 405,635       |
|                                   |                   |                                      |                                  |                                  |                              |
| **TOTALS**                             |                   | **$3,156,428.00**     |                                  | **3,156,428**     |

 

          All of the parties included on the above table are related to us through common directors, shareholders or common control.

 

          We relied upon the exemption from registration afforded by Section 4/2 under the Securities Act of 1933, as amended, to issue the shares.

 

We believe we will be able to obtain additional loans from these affiliated entities in the future should the need arise. Our Board of Directors, on a case-by-case basis, will make future decisions on indebtedness. Terms and conditions will be made in accordance with standard market practices. Repayment terms will need to coincide with our ability to generate ongoing profits and            cash flows and consideration will need to be made to our liquidity and our ability to service our existing operations prior to the inception of new lending.

 

          On February 12, 2008, we closed a private offering of restricted shares of our Common Stock. We received gross proceeds of $6,200,000 ($5,727,000 net) from the sale of 3,100,000 shares ($2.00 per share). The shares were sold to a total of 47 investors, none of whom that are residents of the United States. We utilized the            proceeds derived from this offering for completing our refineries and funding the initial operations. We relied upon the exemption from registration afforded by Regulation S, promulgated under the Securities Act of 1933, as amended, to issue the shares.

 

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          In March 2008, we commenced another private offering of our Common Stock whereby we intend to sell shares of our Common Stock at an offering price of $5.00 per share for aggregate subscriptions of up to $10,000,000. If we are successful in selling these securities, of which there can be no assurance, we intend to use the            proceeds derived from this offering for the purpose of acquiring an inventory of petroleum crude and palm oil and the development of our oil resell business. As of the date of this Report we have sold an aggregate of 125,000 shares of our Common Stock and received net proceeds of $625,000 therefrom. We are relying upon the exemption from registration afforded by Regulation S, promulgated under the Securities Act of 1933, as amended, to issue the shares.

 

We believe that we have sufficient funds available from these fund raising efforts, as well as from our recently commenced operations, to allow us to be able to continue to develop our business plan over the next 12 months and in the foreseeable future. While no assurances can be provided, we believe that we will generate a profit from operations during our fiscal year ended            December 31, 2008. We do not expect to raise additional equity in the future, except in the event we elect to do so in order to provide the financing for the expansion of our current refineries, acquisition of a supply chain, or for additional biodiesel plants described above. There are no assurances that we will not elect to raise additional equity capital in the future.

 

**CRITICALACCOUNTINGESTIMATES**

 

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts of assets,            liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under            different assumptions or conditions. The following represents a summary of our critical accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

 

***Leases***– We follow the guidance in SFAS No. 13 “*Accounting for Leases*,” as amended, which requires us to evaluate the lease agreements we enter into to determine whether they represent operating or capital leases at the inception of the lease.

 

***              Foreign currency translation***– Our functional currency is United States dollars and the functional currency of our subsidiaries is currently Colombia pesos. The operations of our subsidiaries are translated into U.S. dollars in accordance with SFAS No. 52            “*Foreign Currency Translation*” as follows:

 

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

 

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(ii)       Revenue and expense items at the average rate of exchange prevailing during the period.

 

Translation adjustments are included as a separate component of stockholders’ equity (deficiency) as a component of comprehensive income or loss. The functional currency of our Colombian subsidiaries has been changed to the United States dollar once our production facilities in Colombia commenced producing operations, as debt, operating revenues and costs of our Colombia            subsidiaries will primarily be denominated in United States dollars.

 

We and our subsidiaries translate foreign currency transactions into the Company’s functional currency at the exchange rate effective on the transaction date. Monetary items denominated in foreign currencies are translated into the functional currency at exchange rates in effect at the balance sheet date. Foreign exchange gains and losses are included in income.

 

***Stock-based compensation*****–**Effective January 1, 2006, we adopted Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard (SFAS) No. 123R, “*Share Based Payment*.” SFAS 123R requires a public entity to measure the cost of            employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized on a straight-line basis over the employee service period (usually the vesting period). That cost is measured based on the fair value of the equity or liability instruments issued using the Black-Scholes option pricing model.

 

***Recent accounting pronouncements*****–**In September 2006, the FASB issued SFAS No. 157,*“Fair Value Measurements.”*SFAS No. 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value            measurements. SFAS No. 157 requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy as defined in the standard. Additionally, companies are required to provide enhanced disclosure regarding financial instruments in one of the categories (level 3), including a reconciliation of the beginning and ending balances separately for each major category of assets and liabilities. SFAS No. 157 is effective for our consolidated financial            statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The adoption of SFAS No. 157 is not expected to have a material impact on our consolidated financial statements or results of operations.

 

In September 2006, the FASB issued SFAS No. 158, “*Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.”*SFAS No. 158 requires the recognition of the funded status of a defined benefit plan in the balance sheet; the recognition in other comprehensive income of gains or losses and prior            service costs or credits arising during the period but which are not included as components of periodic benefit cost; the measurement of defined benefit plan assets and obligations as of the balance sheet date; and disclosure of additional information about the effects on periodic benefit cost for the following fiscal year arising from delayed recognition in the current period. In addition, SFAS No. 158 amends SFAS No. 87, “*Employers’ Accounting            for Pensions*,” and SFAS No. 106, “*Employers’ Accounting for Postretirement Benefits Other Than Pensions*,” to include guidance regarding selection of assumed discount rates for use in measuring the benefit obligation. The recognition and

 

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disclosure requirements of SFAS No. 158 are effective for our year ended December 31, 2006. The measurement requirements are effective for fiscal years ending December 31, 2008. We do not believe the adoption of SFAS 158 will have a material impact on our consolidated financial statements.

 

In February 2007, the FASB issued SFAS No. 159, “*The Fair Value Option for Financial Assets and Financial Liabilities*” (SFAS No. 159). Under the provisions of SFAS No. 159, companies may choose to account for eligible financial instruments, warranties and insurance contracts at fair value on a contract-by-contract            basis. Changes in fair value will be recognized in earnings each reporting period. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are required to adopt the provisions of SFAS No. 159 effective January 1, 2008. We are currently assessing the impact of the adoption of SFAS No. 159.

 

In December 2007, the FASB issued a revised standard, SFAS 141R*,*“*Business Combinations*” on accounting for business combinations. The major changes to accounting for business combinations are summarized as follows:

 

|   | **•** | SFAS 141R requires that most identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination be recorded at “full fair value” |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | Most acquisition-related costs would be recognized as expenses as incurred |
|--------|------------|----------------------------------------------------------------------------|

 

|   | **•** | Obligations for contingent consideration would be measured and recognized at fair value at the acquisition date |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

 

|   | **•** | Liabilities associated with restructuring or exit activities are recognized only if they meet the recognition criteria in SFAS 146, “*Accounting for Costs Associated with Exit or Disposal Activities*,” as of the acquisition date |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | An acquisition date gain is reflected for a “bargain purchase” |
|--------|------------|----------------------------------------------------------------------------|

 

|   | **•** | For step acquisitions, the acquirer re-measures its noncontrolling equity investment in the acquiree at fair value as of the date control is obtained and recognizes any gain or loss in income |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | **•** | A number of other significant changes from the previous standard including related to taxes and contingencies |
|--------|------------|---------------------------------------------------------------------------------------------------------------|

 

The statement is effective for business combinations occurring in the first annual reporting period beginning on or after December 15, 2008. The adoption of SFAS No. 141R is not expected to have a material impact on our consolidated financial statements or results of operations.

 

In December 2007, the FASB issued a revised standard SFAS 160, “*Non-controlling Interests in Consolidated Financial Statements*,” on accounting for non-controlling interests and

 

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transactions with non-controlling interest holders in consolidated financial statements. This statement specifies that non-controlling interests are to be treated as a separate component of equity, not as a liability or other item outside of equity. Because non-controlling interests are an element of equity, increases and decreases in the parent’s ownership interest that leave control intact are            accounted for as capital transactions rather than as a step acquisition or dilution gains or losses. The carrying amount of the non-controlling interests is adjusted to reflect the change in ownership interests, and any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity attributable to the controlling interest. This standard requires net income and comprehensive            income to be displayed for both the controlling and the non-controlling interests. Additional required disclosures and reconciliations include a separate schedule that shows the effects of any transactions with the non-controlling interests on the equity attributable to the controlling interest. The statement is effective for periods beginning on or after December 15, 2008. SFAS 160 will be applied prospectively to all non-controlling interests, including any that arose before the            effective date. The adoption of SFAS No. 160 is not expected to have a material impact on our consolidated financial statements or results of operations.

 

**TRENDS**

 

Our primary business over the next 12 months will be the operation of our biodiesel plant and oil refinery, which completed construction in the fourth quarter of 2007 in Santa Marta, Colombia. Both of our plants are fully operational and we are currently building our supply and customer bases.

 

Management intends to pursue implementation of related businesses, including developing an oil resell business and an oil shipping business. We expect to finance the oil shipping business through a combination of using existing funds, if any, bank financing, private equity offering or funding through affiliated entities. Oil trades conducted are expected to be of a short-term            nature and will be pre-arranged on both the buying and selling side to reduce risk. Our intention is to utilize the necessary funds for a period not to exceed two to three weeks. We are currently in the process of discussing this proposed business with various entities in the industry.

 

The shipping business will be conducted through Great Voyages, a 45% owned subsidiary, and will be implemented in conjunction with the implementation of production of our biodiesel fuel plant and the possible corresponding need to ship our end product. We have leased our first vessel and we are working on plans to purchase and lease additional vessels in the future.

 

**INFLATION**

 

          Although our operations are influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the three month period ended March 31, 2008.

 

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**RISKFACTORS**

 

          *An investment in our Common Stock is a risky investment. Prospective investors should carefully consider the following risk factors before purchasing shares of our Common Stock. We believe that we have included all material risks.*

 

**We have incurred losses in the past****.**We did not begin generating revenues until late in our 2007 fiscal year when we completed our initial sale of oil. In addition, our biodiesel plant described herein did not become operational until the first quarter of 2008. Our audited financial statements for our fiscal year            ended December 31, 2006 contained a “going concern” opinion from our independent accountant. However, no such opinion is included in our audited financial statements for our fiscal year ended December 31, 2007. As of March 31, 2008, we had an accumulated deficit of $(2,756,001) and incurred a net loss of $156,486. As of December 31, 2007, we had an accumulated deficit of $(2,599,515) and incurred a net loss of $113,100. For the year ended December 31, 2006, we incurred a            net loss of $336,849. While we do not expect to continue to incur losses from operations now that our biodiesel plant is operational, there can be no assurances that this will occur. Until we begin generating profitable operations on a regular basis, we expect to rely on cash from our recent equity financings, as well as loans from affiliates, if necessary, to fund all of the cash requirements of our business. There are no assurances that we will be able to attain, sustain or            increase profitability on a quarterly or annual basis. A downturn in the demand for biodiesel would significantly and adversely affect our sales and profitability.

 

**We have spent a significant amount of our available capital on our biodiesel plant construction. We can make no assurances that this capital expenditure will successfully achieve desired results****.**If our biodiesel plant does not achieve desired results, our business and results of operation will be adversely impacted.            Additionally we had firm contracts on all significant portions of the construction that contain provisions for workmanship and warranties. However, there can be no assurances that problems in this regard will not arise in the future.

 

**Any operational disruption at our facilities could result in a reduction of our sales volume, and could cause us to incur substantial losses****.**If our operations at our facilities experience a significant interruption due to a major accident or damage by severe weather or other natural disasters, our ability to generate            revenues could be adversely impacted. In addition, our operations may be subject to labor disruptions and unscheduled downtime, or other operational hazards inherent in our industry, such as equipment failures, fires, explosions, abnormal pressures, blowouts, pipeline ruptures, transportation accidents and natural disasters. Some of these operational hazards may cause personal injury or loss of life, severe damage to or destruction of property and equipment or environmental damage,            and may result in suspension of operations and the imposition of civil or criminal penalties. Our insurance may not cover or be adequate to fully cover the potential operational hazards described above.

 

 **Our financial performance will be dependent on prices and availability for palm oil, biodiesel and other chemical inputs, which are subject to and determined by market forces outside our control. An increase in the prices for these input commodities will materially** 

 

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**affect our ability to operate at a profit****.**Our results of operations and financial condition is significantly affected by the cost and supply of palm oil. Palm oil is currently our single largest expense. The price of palm oil is influenced by weather conditions and other factors affecting crop yields, farmer planting decisions, the            output and proximity of palm crush facilities, and general economic, market and regulatory factors. These factors include government policies and subsidies with respect to agriculture and international trade, and global and local demand and supply. The significance and relative effect of these factors on the price of palm oil is difficult to predict. Any event that tends to negatively affect the supply of palm oil, such as adverse weather or crop disease, could increase palm oil            prices and potentially harm our business. In addition, we may also have difficulty, from time to time, in sourcing palm oil on economical terms due to supply shortages. Such a shortage could require us to suspend operations until palm oil is available at economical terms, which would have a material adverse effect on our business, results of operations and financial position. The price we pay for palm oil at a facility could also increase if an additional biodiesel production            facility is built in the same general vicinity. We are unaware of any other facility that is being planned in the vicinity of our plant.

 

**The availability and price of palm oil will significantly influence our financial performance****.**We may purchase palm oil in the cash market and hedge palm oil price risk through futures contracts and options to reduce short-term exposure to price fluctuations. There is no assurance that our hedging activities will            successfully reduce the risk caused by price fluctuation, which may leave us vulnerable to high palm oil prices. Hedging activities themselves can result in costs because price movements in palm oil contracts are highly volatile and are influenced by many factors that are beyond our control.

 

Price increases in such inputs or a lack of supply of such inputs could increase production costs, reduce profit margins and negatively affect cash flow. This is especially true if market conditions do not allow us to pass through increased palm oil costs to our customers. There is no assurance that we will be able to pass through higher palm oil prices to our customers. If a            period of high palm oil prices or other inputs were to be sustained for some time, such pricing may reduce our ability to operate and generate revenues. In certain instances, we could decide to limit or even cease production of biodiesel for a period of time.

 

          There are competing interest for the supply of palm oil and other feedstock to produce biodiesel fuel. These competing interests include cooking products and usages of these products in producing other products. Additionally biodiesel plants are being rapidly constructed and expanded which will result in continued            increases in demands. However, export of these products will continue to increase and other plants may be developed.

 

          **There can be no assurances that we will be able to establish a steady supply of feedstock****.**We have established relationships with five palm oil extractors to provide our feedstock of palm oil. While we are currently in negotiations with            each of them on an ongoing basis to purchase palm oil at competitive prices, there can be no assurance that we will be able to reach an agreement with them in the future. We are working on a fixed long-term contract to maintain a steady supply, but for now we feel it is better to negotiate feedstock on a short term basis. We have received limited assurances from government officials of assistance in maintaining a steady supply of materials. Additionally, we hope in the future to            develop our own

 

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supply chain that we hope will eventually include owning our own farms and pressing plants. However, we cannot provide any guarantees that we will be able to establish a steady supply of palm oil.

 

          **Because members of our management are also involved with other companies, there is a potential that conflicts of interest may arise in the future****.**JASB, one of our principal shareholders and co-owner of Great Voyages, one of our            subsidiaries, is a company that is controlled by Mr. Saito, our Chief Executive Officer and a director. JASB has loaned us money from time to time in the past and may do so in the future. JASB also constructed the petroleum refinery on the same parcel of property and adjacent to the biodiesel plant being constructed by us that we recently acquired. We obtained an independent valuation to establish the terms of this acquisition. JASB undertook this endeavor as a result of our            limited financial abilities. Prior to acquiring this refinery we leased this property to JASB at a rate of approximately $4,550 per month (10,000,000 pesos), which is consistent with applicable lease rates in Santa Marta, Colombia. However, as a result of this relationship it is possible that conflicts of interest may arise in the future. If such conflicts do arise, Mr. Saito intends to resolve any such conflicts in the most favorable manner to us. However, there can be no            assurances that unexpected situations will arise in the future that cannot be resolved in our favor.

 

**Future concerns over deforestation and other environmental concerns may limit crop productions of palm trees and other feedstock****.**Environmental concerns worldwide are continuing to rise. Tracts of land cleared for the production of palm trees cause deforestation. A balance needs to be achieved between protecting            forest and the production of palm trees and other sources of feedstock. This may limit the production of future farms and as such, create reductions in available feedstock supplies. We feel these risks have been partly reduced by our choice to locate in a palm oil rich country, which has no other producers and limited internal consumption. We intend to acquire rights to palm oil processors and potentially farms in the future to combat this risk. There can be no assurance that we            will be able to acquire such rights or farms on economically favorable terms, or at all.

 

          As of the date of this Report there are currently no ongoing efforts to limit additional plantations in Colombia. We will continue to monitor this and look for additional potential suppliers. Additionally, we will continue to explore alternative feedstock to ensure a steady supply.

 

**Availability of charters and suitable ships for biodiesel and oil transportation may become limited or costs may be increased by higher fuel, crew, and maintenance costs****.**We are marketing our biodiesel fuel in Colombia and, if the economics are favorable, to other locations in North and South America. If we do sell            our product outside of Colombia, we will need to arrange for transportation of our fuel. As of the date of this Report we are chartering a ship for transport. In February 2008 Great Voyages came to terms on its first charter with Serport, S.A. and took possession of a ship in April 2008. There is a constant demand by competitors for charter ships. In the future the cost for additional charters may become excessive in price if demand increases sharply. Additionally, higher prices for            fueling, crewing, and maintaining charters may ultimately be passed on to us, thereby decreasing our profitability.

 

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We are also exploring the possibility of developing our own fleet, thereby minimizing our need for charters. We hope to have the fleet sufficient in size to meet all of our own shipping needs. However, we currently do not have the available capital to undertake this objective and there can be no assurances that we will have the financial resources available to allow us to            accomplish this objective in the future. We initially anticipate that we will utilize charters in the future. If our internal needs decrease we expect that these ships can then be chartered to other companies. There can be no assurances that we will be able to charter these crafts to any third party on favorable terms, or at all.

 

**Declines in the prices of biodiesel will have a significant negative impact on our financial performance****.**Our revenues will be greatly affected by the price at which we can sell our biodiesel and other petroleum based products. These prices can be volatile as a result of a number of factors. These factors include the            overall supply and demand, the price of fuel, level of government support and the availability and price of competing products. Biodiesel prices generally parallel the movement of petroleum oil prices. Oil prices are difficult to forecast because the market reflects the global economy, which is subject to political upheaval, natural disasters and other myriad factors. Even the slightest rumor of political instability can significantly affect the price of oil. Further, exchange rates            play a key role in domestic and international oil pricing. Any lowering of diesel prices will likely also lead to lower prices for biodiesel, which may decrease our sales and reduce revenues.

 

Management believes our location gives us a competitive advantage in that we have market opportunities not just in Colombia, but also throughout South America, Central America, and the United States. In the foreseeable future we believe we will be able to produce biodiesel at a substantially lower cost than U.S. producers, giving us a slightly greater buffer then the rest of our            competitors, even with the cost of transportation. Many of our U.S. competitors have land locked facilities with no port access leaving only the prospect of utilizing ground fleets to deliver their biodiesel fuels. Ultimately this limits their market within a few hundred-mile radius, making it difficult for them to seek out secondary markets in which they might be able to obtain higher prices.

 

**The biodiesel production and marketing industry is competitive. There are many competitors that have greater financial and other resources than we do and one or more of these competitors could use their greater resources to gain market share at our expense.**According to the National Biodiesel Board, the biodiesel manufacturing industry is            experiencing rapid growth in the United States. (www.nationalbiodieselboard.org). New plant construction or decreases in demand for biodiesel may result in excess production capacity, which could have an impact upon our ability to operate profitably. Excess capacity in the biodiesel industry may lead to increased competition for inputs and decreased market prices for biodiesel, which means that we may be            unable to acquire the inputs needed or be unable to acquire the inputs at a profitable price. In addition, if the excess capacity occurs, we may be unable to market our products at profitable prices.

 

Many of our competitors in the biodiesel production and marketing industry have substantially greater production, financial, research and development, personnel and marketing resources than we do. As a result, our competitors may be able to compete more aggressively

 

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than we could and sustain that competition over a longer period of time. Our lack of resources relative to many of our competitors may cause us to fail to anticipate or respond adequately to new developments and other competitive pressures. This failure could reduce our competitiveness and cause a decline in our market share, sales and profitability.

 

**Competition from the advancement of alternative fuels may lessen the demand for biodiesel and negatively impact our profitability****.**Alternative fuels, gasoline oxygenates and biodiesel production methods are continually under development. A number of automotive, industrial and power generation manufacturers are            developing alternative clean power systems using fuel cells or clean burning gaseous fuels. Like biodiesel, the emerging fuel cell industry offers a technological option to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions. Fuel cell industry participants are            currently targeting the transportation, stationary power and portable power markets in order to decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions. If the fuel cell and hydrogen industries continue to expand and gain broad acceptance, and hydrogen becomes readily available to consumers for motor vehicle use, we may not be able to compete effectively. This additional competition could reduce the demand for biodiesel, which would negatively impact our            profitability.

 

**Labor costs will always be a heavy factor in all of our businesses****.**We have chosen to locate in depressed labor markets to keep these costs minimized. However, these markets may change over time, perhaps at a rapid pace, which can increase our costs substantially. An increase in cost will have a negative impact on our            anticipated results of operation.

 

          **Most of our technology is acquired from external vendors who service other clients with identical technology.**Our technology is similar or identical to most of the current biodiesel plants and as such has only limited uniqueness. We consider our greatest threat to            be information regarding our feedstock sources and customer base. Our relationships built on both the buying and selling side of our oil resell business also pose an extreme threat to our business. We will limit access to both our purchasing and selling sources to key employees in their respective department to ensure minimal exposure for this data. There can be no assurances that our efforts in this regard will be successful. If we are not successful in our efforts we will            experience negative consequences.

 

**Changes in environmental regulations may be adopted in the future or violations of regulations could occur. If these events occur, we will experience an increase in our costs and reduction of our anticipated profitability****.**We are subject to environmental regulations and will need to follow an Environmental Handling            Plan that must be strictly followed. Changes in environmental laws and regulations could require us to invest or spend additional resources in order to comply with future environmental regulations. Violations of these laws and regulations could result in liabilities that affect our financial condition and the expense of compliance alone could be significant enough to reduce profits.

 

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**Changes in the political environment could result in increases expenses, loss of control of price, or even the nationalization of our business****.**We are operating in volatile political areas with extensive government control. As governments continue to work to protect consumers and keep prices for oil and oil related            products in check they often engage in regulatory or market control practices. These controls could impact our ability to operate profitably. Future regulation may require additional expense related to items, such as, payroll, property maintenance, and pollution control.

 

          Additionally, the countries that we operate in could become unstable in the future. Changes in political environments causing changes to government control over its energy sector could happen in jurisdictions where we intend to operate. Even small changes in government control could impact us through tax hikes, control            over commodity prices, and inflationary controls.

 

**We may be sued or become a party to litigation, which could require significant management time and attention and result in significant legal expenses and may result in an unfavorable outcome which could have a material adverse effect on our business, financial condition, results of operations and cash flows****.**While we            have no knowledge of any threatened litigation matters, we may be subject to lawsuits from time to time arising in the ordinary course of our business. We may be forced to incur costs and expenses in connection with defending ourselves with respect to such litigation and the payment of any settlement or judgment in connection therewith if there is an unfavorable outcome. The expense of defending litigation may be significant. The amount of time to resolve lawsuits is unpredictable            and defending ourselves may divert management’s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations and cash flows. In addition, an unfavorable outcome in any such litigation could have a material adverse effect on our business, results of operations and cash flows.

 

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

 

**Holders of our Common Stock may suffer significant dilution in the future****.**In order to fully implement our business plan described in this Report, it is probable that we will require additional capital, either debt or equity, or both. As a result, it is possible that we may elect to raise additional equity capital by            selling shares of our Common Stock or other securities in the future to raise the funds necessary to allow us to implement our business plan. If we do so, our current shareholders will suffer significant dilution.

 

**Our success depends, to an extent, upon the continued services of Mamoru Saito and Takahito Sakagami, our Chief Executive Officer and President, respectively****.**We have made a significant effort to build a diverse management team with skills and industry experience

 

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sufficient to operate our Company on a day-to-day basis. Additionally, we have developed key relationships with suppliers and customers to ensure success in all aspects of our proposed operations. Despite these efforts, we continue to rely on the services of Messrs. Saito and Sakagami for strategic and operational management and the relationships they have built. Some of our competitor’s            management has more experience than Messrs. Saito and Sakagami and our other members of management in the biodiesel industry. In addition, Mr. Saito devotes a minimum of approximately 40 hours per week to our business, provided that he is not required to address unexpected matters that arise in his other businesses, which happens from time to time. This may place us at a competitive disadvantage because we will greatly rely on these relationships in the conduct of our            proposed operations and the execution of our business strategies. The loss of either of Messrs. Saito and Sakagami could also result in the loss of our favorable relationships with one or more of our suppliers and customers, as well as a loss of their business acumen. We have not entered into an employment agreement with either Mr. Saito or Mr. Sakagami. In addition, we do not maintain “key person” life insurance covering Messrs. Saito and Sakagami or            any other executive officer. The loss of either Mr. Saito or Mr. Sakagami could also significantly delay or prevent the achievement of our business objectives.

 

**We are currently experiencing a period of rapid growth that is imposing a significant burden on our current administrative and operational resources****.**Our ability to effectively manage our growth will require us to substantially expand the capabilities of our administrative and operational resources by attracting,            training, managing and retaining additional qualified personnel, including additional members of management, technicians and others. To successfully operate our new biodiesel plant we need to manage operations and production, as well as marketing and selling the end products generated by this facility. There can be no assurances that we will be able to do so. Our failure to successfully manage our growth will have a negative impact on our anticipated results of            operations.

 

**We have been unprofitable to date****.**Our biodiesel plant commenced limited operations during the first calendar quarter of 2008. Accordingly, there is no prior operating history by which to evaluate the likelihood of our success or our contribution to our overall profitability. There are no assurances that our new            biodiesel plant will be successful in contributing positively to our profitability.

 

          **We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors****.**As directed by Section 404 of the Sarbanes-Oxley Act of 2002            (“SOX 404”), the Securities and Exchange Commission adopted rules requiring public companies to include a report of management on the company’s internal controls over financial reporting in their annual reports, including this Form 10-KSB. In addition, the independent registered public accounting firm auditing a company’s financial statements must also attest to and report on management’s assessment of the effectiveness of the company’s internal            controls over financial reporting as well as the operating effectiveness of the company’s internal controls.

 

          While we expect to expend significant resources in developing the necessary documentation and testing procedures required by SOX 404, there is a risk that we will not

 

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comply with all of the requirements imposed thereby. At present, there is no precedent available with which to measure compliance adequacy. Accordingly, there can be no positive assurance that we will receive a positive attestation from our independent auditors.

 

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

 

**Risks Related to our Common Stock**

 

**There is a limited trading market for our securities and there can be no assurance that such a market will develop in the future****.**We were approved for listing our Common Stock for trading on the OTC Electronic Bulletin Board operated by the Financial Industry Regulatory Authority (“FINRA”), f/k/a the            National Association of Securities Dealers, Inc., in February 2008. As of the date of this Report, trading in our Common Stock is limited. There is no assurance that a market will develop in the future or, if developed, that it will continue.

 

We have submitted an application to list our Common Stock for trading on NASDAQ or other national exchange. The OTC Electronic Bulletin Board is not considered a national exchange. As of the date of this Report FINRA is reviewing the application and we are awaiting receipt of comments or questions concerning our Company and the class of stock (Common Stock) for which a listing has            been requested. There is no assurance that our application for listing on a national exchange will be approved, or if so approved that a market will develop in the future or, if developed, that it will continue. In the absence of a public trading market, an investor may be unable to liquidate his investment in our Company.

 

          **We do not have significant financial reporting experience, which may lead to delays in filing required reports with the Securities and Exchange Commission and suspension of quotation of our securities on the OTCBB or a national exchange, which will make it more difficult for you to sell your            securities****.**The OTCBB and a national exchange each limit quotations to securities of issuers that are current in their reports filed with the Securities and Exchange Commission. Because we do not have significant financial reporting experience, we may experience delays in filing required reports with the Securities and Exchange Commission (the “SEC”). Because issuers whose securities are qualified for quotation            on the OTCBB or any other national exchange are required to file these reports with the Securities and Exchange Commission in a timely manner, the failure to do so may result in a suspension of trading or delisting.

 

          **There are no automated systems for negotiating trades on the OTCBB and it is possible for the price of a stock to go up or down significantly during a lapse of time between placing a market order and its execution, which may affect your trades in our            securities****.**Because there are no automated systems for negotiating trades on the OTCBB, they are conducted via telephone. In times of heavy market volume, the limitations of this process may result in a significant increase in the time it takes to execute investor orders. Therefore,

 

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

 

          **Our stock may be considered a “penny stock” if it trades below $5.00 per share. This can adversely affect its liquidity****.**As of the date of this Report, our Common Stock trades in excess of $5.00 per share, but there can be            no assurance that this price will be maintained in the future. If the trading price of our Common Stock falls below $5.00 per share, trading in our Common Stock will be subject to the requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized            written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction.

 

          SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. In addition, broker-dealers must disclose commissions            payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities. In addition, few broker or dealers are likely to undertake these compliance            activities. Other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.

 

          **We do not anticipate payment of dividends, and investors will be wholly dependent upon the market for the Common Stock to realize economic benefit from their investment****.**As holders of our Common Stock, you will only be entitled to            receive those dividends that are declared by our Board of Directors out of retained earnings. We do not expect to have retained earnings available for declaration of dividends in the foreseeable future. There is no assurance that such retained earnings will ever materialize to permit payment of dividends to you. Our Board of Directors will determine future dividend policy based upon our results of operations, financial condition, capital requirements, reserve needs and other            circumstances.

 

**Any adverse effect on the market price of our Common Stock could make it difficult for us to raise additional capital through sales of equity securities at a time and at a price that we deem appropriate****.**Sales of substantial amounts of Common Stock, or in anticipation that such sales could occur, may materially and            adversely affect prevailing market prices for our Common Stock.

 

**The market price of our Common Stock may fluctuate significantly in the future.**The market price of our Common Stock may fluctuate in response to one or more of the following factors, many of which are beyond our control:

 

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|   | **•** | the volume and timing of the receipt of orders for biodiesel from major customers; |
|--------|------------|------------------------------------------------------------------------------------|

 

|   | **•** | competitive pricing pressures; |
|--------|------------|--------------------------------|

 

|   | **•** | our ability to produce, sell and deliver biodiesel on a cost-effective and timely basis; |
|--------|------------|------------------------------------------------------------------------------------------|

 

|   | **•** | our inability to obtain construction, acquisition, capital equipment and/or working capital financing; |
|--------|------------|--------------------------------------------------------------------------------------------------------|

 

|   | **•** | the introduction and announcement of one or more new alternatives to biodiesel by our competitors; |
|--------|------------|----------------------------------------------------------------------------------------------------|

 

|   | **•** | changing conditions in the biodiesel and fuel markets; |
|--------|------------|--------------------------------------------------------|

 

|   | **•** | changes in market valuations of similar companies; |
|--------|------------|----------------------------------------------------|

 

|   | **•** | stock market price and volume fluctuations generally; |
|--------|------------|-------------------------------------------------------|

 

|   | **•** | regulatory developments; |
|--------|------------|--------------------------|

 

|   | **•** | fluctuations in our quarterly or annual operating results; |
|--------|------------|------------------------------------------------------------|

 

|   | **•** | additions or departures of key personnel; and |
|--------|------------|-----------------------------------------------|

 

|   | **•** | future sales of our Common Stock or other securities. |
|--------|------------|-------------------------------------------------------|

 

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

 

**Risks Related to our Company**

 

          **Provisions of our Articles of Incorporation and Bylaws may delay or prevent a take-over that may not be in the best interests of our stockholders****.**Provisions of our Articles of Incorporation and Bylaws may be deemed to have            anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Nevada Revised Statutes also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation’s            disinterested stockholders.

 

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          In addition, our Articles of Incorporation authorizes the issuance of up to 25,000,000 shares of Preferred Stock with such rights and preferences determined from time to time by our Board of Directors. No shares of our Preferred Stock are currently outstanding. Our Board of Directors may, without stockholder approval,            issue Preferred Stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our Common Stock.

 

          **Our management and principal shareholders have the ability to significantly influence or control matters requiring a shareholder vote and other shareholders may not have the ability to influence corporate transactions****.**Currently,            Mr. Saito, our CEO and Chairman of our Board of Directors, owns approximately 66.6% of our outstanding Common Stock. As a result, Mr. Saito, acting alone, has the ability to determine the outcome on all matters requiring approval of our shareholders, including the election of directors and approval of significant corporate transactions.

 

          **Each prospective purchaser is encouraged to carefully analyze the risks and merits of an investment in our Common Stock and should take into consideration when making such analysis, among others, the Risk Factors discussed above.**

 

**ITEM 3. CONTROLS AND PROCEDURES**

 

**EVALUATIONOFDISCLOSURECONTROLSANDPROCEDURES.**

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such            information is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

 

               We rely on certain compensating controls, including substantive periodic review of the financial statements by our Chief Executive Officer and our Audit Committee.

 

**CHANGESININTERNALCONTROLS**

 

There have been no changes in our internal controls or in other factors that could significantly affect these controls and procedures during the three-month period ended March 31, 2008.

 

**PART II. OTHER INFORMATION**

 

**ITEM 1. LEGAL PROCEEDINGS**- None

 

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

 

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          On February 12, 2008, we closed a private offering of restricted shares of our Common Stock. We received gross proceeds of $6,200,000 ($5,727,000 net) from the sale of 3,100,000 shares ($2.00 per share). The shares were sold to a total of 47 investors, none of whom that are residents of the United States. We utilized the            proceeds derived from this offering for completing our refineries and funding the initial operations. We relied upon the exemption from registration afforded by Regulation S, promulgated under the Securities Act of 1933, as amended, to issue the Shares.

 

          In March 2008, we commenced another private offering of our Common Stock whereby we intend to sell shares of our Common Stock at an offering price of $5.00 per share for aggregate subscriptions of up to $10,000,000. If we are successful in selling these securities, of which there can be no assurance, we intend to use the            proceeds derived from this offering for the purpose of acquiring an inventory of petroleum crude and palm oil and the development of our oil resell business. As of the date of this Report we have sold an aggregate of 125,000 shares of our Common Stock and received net proceeds of $625,000 therefrom. We are relying upon the exemption from registration afforded by Regulation S, promulgated under the Securities Act of 1933, as amended, to issue the Shares.

 

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**- None

 

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

 

No matters were submitted to our shareholders during the three month period ended March 31, 2008.

 

**ITEM 5. OTHER INFORMATION-**None

 

**ITEM 6. EXHIBITS**

 

| **Exhibit No.** | **Description**                                                                                     |
|-----------------|-----------------------------------------------------------------------------------------------------|
|            |                                                                                                |
| 31.1            | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |
|            |                                                                                                |
| 31.2            | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  |
|            |                                                                                                |
| 32.1            | Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|            |                                                                                                |
| 32.2            | Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  |

 

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**SIGNATURES**

 

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

 

|   | **AMIWORLD, INC.** |
|--------|--------------------|

| Dated: May 14, 2008 | By:_s/Mamoru Saito_________________ |
|---------------------|-------------------------------------|

|   | Mamoru Saito,

 Chief Executive Officer |
|--------|----------------------------------------------|

 

 

| Dated: May 14, 2008 | By:_s/Ingrely Veitia_________________ |
|---------------------|---------------------------------------|

|   | Ingrely Veitia

Chief Financial Officer |
|--------|-----------------------------------------|

 

 

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