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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-KSB

[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934For the fiscal year ended August 31,
2007

[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the transition period from__________ to
__________

Commission file number 000-52094

ALGODYNE ETHANOL ENERGY CORP.(Exact name of small
business issuer as specified in its charter)

|Nevada                                                               | 76-0773943                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

|1709 808 Nelson Street, Vancouver, B.C. V6Z 2H2 | 1-888 767 5955             
|----------------------------------------------- | ---------------------------
|(Address of principal executive offices)        | (Issuer's telephone number)

NoneSecurities registered under Section 12(b) of the
Exchange Act

Common Stock, par value $0.001 per shareSecurities
registered under Section 12(g) of the Exchange Act

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 [ ]

Check if disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form and no disclosure will be
contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to the Form 10-KSB. [X]

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

State issuers revenues for its most recent fiscal year.
$72,688

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.): Aggregate market value of the
55,800,000 common voting stock held by non-affiliates of the registrant as of
December 07, 2007 was $15,624,000, based on the bid price of $0.28 at December
12, 2007.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:55,800,000
common shares issued and outstanding as of December 13, 2007

Transitional Small Business Disclosure Format (Check one): Yes
[ ] No [X]

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ALGODYNE ETHANOL ENERGY CORP.

ANNUAL REPORT ON FORM 10-KSB

TABLE OF CONTENTS

Page

|PART I  |                                                           
|------- | ----------------------------------------------------------
|        |                                                           
|Item 1. | Description of Business.                                  
|Item 2. | Description of Property.                                  
|Item 3. | Legal Proceedings.                                        
|Item 4. | Submission of Matters to a Vote of Security
      Holders.

|PART II  |                                                                                            
|-------- | -------------------------------------------------------------------------------------------
|         |                                                                                            
|Item 5.  | Market For Common Equity and
      Related Stockholder Matters                             
|Item 6.  | Management's Discussion and Analysis or Plan of
      Operation.                           
|Item 7.  | Consolidated Financial
      Statements.                                                   
|Item 8.  | Changes In and Disagreements With Accountants
      on Accounting and Financial Disclosure.
|Item 8A. | Controls and Procedures.                                                                   
|Item 8B. | Other Information.                                                                         

|PART III   |                                                                                                          
|---------- | ---------------------------------------------------------------------------------------------------------
|           |                                                                                                          
|Item 9.    | Directors, Executive Officers,
      Promoters, Control Persons and Corporate Governance; Compliance With
|           | Section 16(a) of the Exchange Act.                                                                       
|Item 10.   | Executive Compensation.                                                                                  
|Item 11.   | Security Ownership of Certain Beneficial Owners
      and Management and Related Stockholder Matters.    
|Item 12.   | Certain Relationships and
      Related Transactions, and Director Independence.                         
|Item 13.   | Exhibits.                                                                                                
|Item 14.   | Principal Accountant Fees and
      Services.                                                            
|           |                                                                                                          
|Signatures |                                                                                                          

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

This annual report contains forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as may, should, expects, plans,
anticipates, believes, estimates, predicts, potential or continue or
the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled Risk Factors, which
may cause our or our industrys actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and, unless otherwise indicated,
all references to we, us, our and AlgoDyne  means AlgoDyne Ethanol
Energy Corp. and our wholly-owned subsidiaries.

CORPORATE OVERVIEW

History and Organization

We were incorporated in the State of Nevada on November 15,
2004. On October 19, 2006, we incorporated a wholly-owned Nevada subsidiary for
the sole purpose of effecting a name change of our Company through a merger with
our subsidiary. On November 3, 2006, we merged our subsidiary with and into our
Company, with our Company carrying on as the surviving corporation under the
name AlgoDyne Ethanol Energy Corp. Our name change was effected with NASDAQ on
November 6, 2006 and our ticker symbol on the OTC Bulletin Board was changed to
ADYN. In addition, we affected an eight (8) for one (1) forward stock split of
our authorized, issued and outstanding common stock on November 3, 2006. As a
result, our authorized capital increased from 75,000,000 shares of common stock
to 600,000,000 shares of common stock.

We have two wholly-owned subsidiaries consisting of Freshly
Pressed Enterprises Inc., a British Columbia corporation that was incorporated
on September 30, 2004, and AlgoDyne Energy Operating Corp., a Nevada corporation
that was incorporated on November 13, 2006. All of our operations related to our
reclaimed textile business are conducted through Freshly Pressed Enterprises.
AlgoDyne Energy Operating Corp. has been inactive since incorporation.

OUR CURRENT BUSINESS

Up until July 2007, our Company was organized for the purpose
of buying and selling reclaimed textiles. We operated our business through our
wholly-owned subsidiary, Freshly Pressed Enterprises Inc., a company
incorporated under the laws of the Province of British Columbia, Canada. Freshly
Pressed Enterprises generated revenues by arranging the sale of reclaimed
textiles to large, international wholesale buyers and, occasionally, to a small
number of vintage clothing stores.

Due to the lack of growth in this business segment, we have
been simultaneously seeking alternate business opportunities in other
industries, one of which is the renewable energy business. Depending upon the
business opportunity, we may acquire assets or technologies to develop our own
business or we may seek out business opportunities with established business
entities for the merger of a target business with our Company. As part of our
strategy to enter the renewable energy business, management is looking to raise
debt and equity to finance its acquisition of technologies and assets.

1

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Having determined that it is in the best interests of our
Company to exit the buying and selling of reclaimed textiles we are committed to
developing business opportunities in the world wide eco-energy sector. Our focus
is to create a portfolio of three primary activities (raw materials,
wholesale/manufacturing, and retail) in the ethanol and bio-diesel industries.

ITEM 2. DESCRIPTION OF PROPERTY

We currently do not own any real property or other significant
property but share office space at a cost of approximately $500 per month. This
rental is on a month-to-month basis with no formal agreement. Our wholly-owned
subsidiary, Freshly Pressed Enterprises, maintains a Vancouver office space,
located at 1709 808 Nelson Street, Vancouver, B.C. V6Z.

Our month-to-month rental arrangements allow us flexibility in
moving if we employ more personnel, however, we believe these facilities are
adequate in size to handle all of our current operations for the foreseeable
future.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, existing or pending legal proceedings
against our Company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any officer
or any of our directors or affiliates, or any registered or beneficial
shareholder, is an adverse party or has a material interest adverse to our
interest

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

None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
TRANSACTIONS

Our shares of common stock were initially approved for
quotation on the OTC Bulletin Board on September 8, 2006 under the name Eagle
Ridge Ventures Inc. under the symbol, EGRG.OB. On November 6, 2006, our
trading symbol changed to ADYN.OB when we changed our name to AlgoDyne
Ethanol Energy Corp.

The following table reflects the high and low bid information
for our common stock for each fiscal quarter within the last fiscal year ending
August 31, 2007 as well as the most recent fiscal quarter. The bid information
was obtained from Yahoo! Finance and reflects inter-dealer prices, without
retail mark-up, markdown or commission, and may not necessarily represent actual
transactions.

Fiscal Quarter Ended
    High
    LowNovember 30, 2007
    0.55
    0.30August 31, 2007
    1.13
    0.40May 31, 2007
    1.16
    0.35September 8, 2006 to February 28, 2007
    1.65
    0.85


Securities Authorized For Issuance Under Equity Compensation
Plans

As of the date of this annual report, we have not adopted a
stock option plan. The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.

2

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EQUITY COMPENSATION PLANSPlan Category
    Number of securities to be issued
      upon exercise of outstanding options, warrants and
      rights (a)
    Weighted-average exercise price
      of outstanding options, warrants and
      rights (b)
    Number of securities remaining
      available for issuance under equity compensation
      plans (excluding securities reflected in column
      (a)) (c)Equity Compensation Plans
      approved by security holders
    Nil
    Nil
    NilEquity Compensation Plans
      not approved by security holders
    Nil
    Nil
    NilTotal
    Nil
    Nil
    Nil


There are no outstanding options or warrants to purchase, or
securities convertible into, any of our common stock.

Outstanding Shares and Shareholders of Record

At December 13. 2007, there were two registered shareholders
holding 55,800,000 shares of our common stock, one of which is CEDE & Co.,
which holds shares for an undisclosed number of beneficial holders.

Dividends

We have not paid any cash dividends on our common stock and we
do not anticipate paying any cash dividends in the foreseeable future. Our
current policy is to retain earnings, if any, to fund the development and growth
of our business. Any future determination to pay cash dividends will be at the
discretion of the board of directors and will be dependent upon our financial
condition, operating results, capital requirements, applicable contractual
restrictions and any other factors that our board of directors deems
relevant.

ITEM 6. PLAN OF OPERATION

This annual report contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These statements
relate to future events or our future financial performance. In some cases, you
can identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", which may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Financial information contained in this annual report and in
our audited consolidated financial statements are stated in United States
dollars and are prepared in accordance with United States generally accepted
accounting principles. The following discussion should be read in conjunction
with our audited interim consolidated financial statements and the related notes
that appear elsewhere in this annual report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors

3

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that could cause or contribute to such differences include, but
are not limited to those discussed below and elsewhere in this quarterly report,
particularly in the section entitled "Risk Factors".

As used in this annual report and unless otherwise indicated,
the terms "we", "us", "our" and "Algodyne " means Algodyne Ethanol Energy Corp.
and our wholly-owned subsidiaries.

OVERVIEW AND PLAN OF OPERATION

Overview

The following discussion and analysis explains trends in our
financial condition and results of operations for the two fiscal years ended
August 31, 2007 and August 31, 2006. This discussion and analysis of the results
of operations and financial condition should be read in conjunction with our
audited financial statements and the related notes, as well as statements made
elsewhere in this Form 10-KSB.

Up until July 2007, we were engaged in the business of buying
and selling reclaimed textiles. We generated revenues by arranging the sale of
reclaimed textiles to large, international wholesale buyers and, occasionally,
to a small number of vintage clothing stores.

To date, our Company has not been as successful as hoped in
implementing our business plan. As management of our Company investigated
opportunities and challenges in the business of buying and selling reclaimed
textiles, management realized that the business did not present the best
opportunity for our Company to realize value for our shareholders. Since July
2007, we have been seeking business opportunities in the alternative energy
industry. Depending upon the business opportunity, we may acquire assets or
technologies to develop our own business or we may seek out business
opportunities with established business entities for the merger of another
entity with our company. In certain instances, a target business may wish to
become a subsidiary of us or may wish to contribute assets to us rather than
merge. Although we have identified certain technologies associated with the
ethanol and bio-diesel industry as potential business opportunities, other than
signing letters of intent, we have not entered into any definitive agreements
and there can be no assurance that we will be able to enter into any definitive
agreements. We anticipate that any new acquisition or business opportunity
identified by our Company will require additional financing. There can be no
assurance, however, that we will be able to acquire the financing necessary to
enable us to pursue our plan of operation. If we are unable to acquire such
funds, our business may fail.

Plan of Operation

Having determined that it is in the best interests of our
Company to exit the buying and selling of reclaimed textiles, we are committed
to developing business opportunities in the world wide eco-energy sector. Our
focus is to create a portfolio of three primary activities (raw materials,
wholesale/manufacturing, and retail) in the ethanol and bio-diesel industries.
Bio-diesel is one of the most popular and fastest growing industries for small
and individual producers and retailers.

Our Company has completed initial business discussions in all
three primary areas and has signed license agreements with retailers and product
suppliers to position our Company to build its own chain of fixed and mobile
"eco-fueling stations" for industry, communities and organizations, These mobile
stations, when established, will provide consumers access to either or both
bio-diesel products and future ethanol products in a low cost, environmentally
friendly infrastructure.

With these license agreements, our Company will also have the
ability to provide current users of bio-diesel production machinery, chemicals,
conversion kits for vehicles, safety and testing information and equipment,
promotional items and accessories. All of these products and services will be
rebranded on our e-commerce site to service the Canadian and US markets.

With respect to developing a source of raw materials to develop
ethanol and bio-diesel fuels, we have established a presence in Brazil. Prof.
Hans-Jürgen Franke, our Company's CTO, will lead a series of projects in Brazil
that will establish strategic cooperation in bio-combustible technology. This
technology will allow us to build significant partnerships in alternative fuels
in the most receptive and involved market globally. The branch office, to be
located in Aracaju-SE Brazil, will spearhead algae-based projects as well as
integrate process-technology through joint ventures with several of Brazil's
states. Prof. Franke will also be responsible to establishing a nursery of
Jatropha plants and the development of a pilot plant for ethanol production with
algae in 2007.

4

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Our Company signed a letter of intent on September 25, 2007 to
acquire a majority interest in an established Canadian bio-diesel company. The
bio-diesel company has experience in retailing, marketing, branding and
manufacturing fuel at its plant in Saskatchewan and has established an expertise
in manufacturing high quality petroleum based on canola and soy. They currently
retail their own brand of fuel conditioners, chain lubes, cutting fluids and
penetrating oils, as well as manufacture their own premium brand of bio-diesel.
This partnership provides us with a proven source of ethanol that will be
formulated to make up our own brand of fuel for use in development and lab work
that will occur in Brazil.

As part of its promotion and marketing campaign, we entered
into a Sponsorship Agreement with X-Raid GmbH Motorsport (X-Raid) and launched
the first phase of our marketing campaign by sponsoring X-Raids BMW racing team
through its newly created campaign called Green Power Racing. This Sponsoring
Agreement represents the first stage of our marketing plan focused on promoting
alternative energy sources of ethanol and bio-diesel. At the 2007 IAA event in
Frankfurt, the team unveiled its logo'd driver suits, logo'd BMW racing cars and
transport trucks. The AlgoDyne brand and ethanol product were displayed on the
vehicles and team suits and our Company provided the racing team with bio-diesel
for its racing fuel requirements. The Green Power Racing X-Raid team
participated in a number of events such as the Dakar Rally and the UAE Desert
Challenge. With a viewing audience in the millions and the use of alternative
fuels in a high performance vehicle, we are excited about the potential success
that will be achieved as a result of our initial efforts in marketing our
products.

In order to fund these developments, our Company has issued
debt and is in the process of raising equity through private placements with
accredited investors in Europe and North America.

OPERATING AND FINANCIAL REVIEW

Critical Accounting Policies

Our consolidated financial statements have been prepared in
accordance with generally accepted accounting principles in the United States.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of consolidated financial statements for a period
necessarily involves the use of estimates which have been made using careful
judgment. In determining estimates of net recoverable amounts and net realizable
values, or whether there has been a permanent impairment in value for accounts
receivable, inventories, capital assets, investments, patent rights and other
assets, we rely on assumptions regarding applicable industry performance and
prospects, as well as general business and economic conditions that prevail and
are expected to prevail. Assumptions underlying asset valuations are limited by
the availability of reliable comparable data and the uncertainty of predictions
concerning future events.

By nature, asset valuations are subjective and do not
necessarily result in precise determinations. Should the underlying assumptions
change, the estimated net recoverable amounts and net realizable values may
change by a material amount.

The consolidated financial statements have, in managements
opinion, been properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies summarized below:

|a. | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | The preparation of consolidated financial statements in
      conformity with accounting principles generally accepted in the United
      States requires management to make estimates and assumptions that affect
      the reported amounts of assets and liabilities, the disclosure of
      contingent assets and liabilities at the date of the consolidated
      financial statements, and the reported amounts of revenues and expenses
      for the reporting period. Actual results could differ from those
      estimates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|b. | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Our Companys functional currency is the U.S. dollar.
      Transactions in foreign currency are translated into U.S. dollars as
      follows: - monetary items at the rate prevailing at the balance sheet
      date; - non-monetary items at the historical exchange rate; -
      revenue and expense at the average rate in effect during the applicable
      accounting period.                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|c. | Revenue Recognition and Accounts
  Receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Our Company recognizes sales when the following criteria
      are met: persuasive evidence of an agreement exists, shipment has
      occurred, the price to the buyer is fixed and determinable and
      collectibility is reasonably                                                                                                                                                                                                                                                                                                 



5

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assured. Shipping and handling charges
billed to customers are included in revenue and the related shipping and
handling costs are included in cost of goods sold.

Accounts receivable consists of
receivables from customers. The Company does not provide allowances for
merchandise returns or claims due to the nature of the goods sold (reclaimed
textiles), however, the Company does provide an allowance for doubtful accounts
through periodic evaluations of the aging of accounts receivable.

|d. | Organization Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Our Company has adopted the provisions of the AICPA
      Statement of Position 98-5, Reporting on the Costs of Start-Up
      Activities whereby organization and initial costs incurred with the
      incorporation and initial capitalization are charged to operations as
      incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|e. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Our Company has adopted Statement of Financial Accounting
      Standards No. 109  Accounting for Income taxes (SFAS 109). This
      standard requires the use of an asset and liability approach for financial
      accounting, and reporting on income taxes. If it is more likely than not
      that some portion or all of a deferred tax asset will not be realized, a
      valuation allowance is recognized.                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|f. | Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | In accordance with SFAS No. 128  Earnings Per Share,
      the basic loss per common share is computed by dividing net loss available
      to common stockholders by the weighted average number of common shares
      outstanding. Diluted loss per common share is computed similar to basic
      loss per common share except that the denominator is increased to include
      the number of additional common shares that would have been outstanding if
      the potential common shares had been issued and if the additional common
      shares were dilutive. At August 31, 2007, our Company has no stock
      equivalents that were anti-dilutive and excluded in the earnings per share
      computation.

Going Concern and Continuing operations

Our consolidated financial statements have been prepared
assuming we will continue as a going concern. Our accumulated deficit amounts to
$1,355,801 as at August 31, 2007. Our future is dependent upon the continued
support of our lenders, our ability to obtain financing and upon future
profitable operations from the development of acquisitions. Management has plans
to seek additional capital through a private placement of our common stock and
the issuance of debt. Our consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts of and classification of liabilities that might be
necessary in the event we cannot continue in existence.

Due to the uncertainty of our ability to meet our current
operating expenses and the capital expenses noted above, in their report on the
annual financial statements for the year ended August 31, 2007, our independent
auditors included an explanatory paragraph regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

The continuation of our business is dependent upon us raising
additional financial support. The issuance of additional equity securities by us
could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

There can be no assurances that we will be successful in
raising additional cash to finance operations. If not, we will be required to
reduce operations and/or liquidate assets. Our consolidated financial statements
do not include any adjustments relating to the recoverability of assets and
classification of assets and liabilities that might be necessary should we be
unable to continue as a going concern.

LIQUIDITY AND CAPITAL RESOURCES

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Results of Operations for the Year Ended August 31, 2007 and
August 31, 2006

During the year ended August 31, 2007 (effective June 1, 2007),
the Company abandoned the business operated by its wholly-owned subsidiary,
Freshly Pressed Enterprises, Inc. Revenues for the twelve months ended August
31, 2007 amounted to $72,688 for Freshly Pressed Enterprises, Inc. compared to
$237,505 for the same period ended August 31, 2006. Cost of sales for the twelve
months ended August 31, 2007 amounted to $54,153 compared to $199,704 for the
same period ended August 31, 2006 due to the decrease in revenues over the
preceding year. Gross profit amounted to $18,535 for the twelve months ended
August 31, 2007 compared to $37,801 for the year ended August 31, 2006 again as
a result of lower revenues over the preceding twelve month period. Loss from
discontinued operations amounted to $15,971 for the year ended August 31, 2007
compared to income of $2,391 for the year ended August 31, 2006.

General and administrative expenses for the twelve months ended
August 31, 2007 were $1,504,937 compared to $75,452 for the year ended August
31, 2006. The increase of $1,429,485 during the year ended August 31, 2007
reflected increased legal, accounting, bank charges and interest, office and
administration, web site expenses, public relations, advertising and marketing,
consulting fees associated with re-organizing the business and pursuing other
business opportunities. As mentioned above, the costs associated with marketing
and advertising amounting to $1,212,120 were associated with a
SponsorshipAgreement with X-Raid GmbH Motorsport.

The net loss for the year end August 31, 2007, including the
loss from discontinued operations of $15,971, was $1,520,908 compared to a net
loss of $73,061 for the same period ended August 31, 2006.

As at August 31, 2007, our company had cash and cash
equivalents of $198,528 and a working capital deficiency of $1,535,810. We
anticipate that we will incur approximately $75,000 during the next twelve
months in connection with our company locating, evaluating and negotiating
potential business opportunities through which to carry out an asset acquisition
or business combination. We anticipate that we will incur additional expenses if
we are successful in locating a business opportunity and enter into an agreement
to acquire assets or carry out a business combination with a suitable target
company. If we acquire assets, we will require significant funds to develop and
commercialize the products or technologies in addition to any acquisition costs
that may be incurred. It is not possible to estimate such funding requirements
until such time as we enter into a definitive agreement.

In addition to the costs set out above, and regardless of
whether we focus entirely on new business opportunities, we estimate our general
operating expenses for the next twelve month period to be as follows:

Estimated Operating Expenses For the Next Twelve Month PeriodOperating Expenses:Consultant Compensation
    $
    300,000Professional Fees
    $
    100,000General and
      Administrative Expenses
    $
    30,000Total
    $
    430,000


Employees

Currently we have no employees. We anticipate that we will be
conducting most of our business through agreements with consultants and third
parties. Our officers do not have employment agreements with us.

Consultant Compensation

Given the early stage of our operations, we intend to continue
to outsource our professional and personnel requirements by retaining
consultants on an as-needed basis. We estimate that our consultant and related
professional compensation expenses for the next twelve month period will be
approximately $300,000.

7

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Professional Fees

We expect to incur on-going legal, accounting and audit
expenses to comply with our reporting responsibilities as public company under
the United States Securities Exchange Act of 1934, as amended. We estimate such
expenses for the next fiscal year to be approximately $100,000.

General and Administrative Expenses

We anticipate spending $30,000 on general and administrative
costs in the next twelve month period. These costs primarily consist of expenses
such as office supplies and office equipment.

Liquidity and Capital Resources

As of August 31, 2007, we had cash and cash equivalents of
$198,528 and $1,744,042 in current liabilities. The current liabilities
consisted of accounts payable and accrued liabilities, short term advances, a
demand loan and amounts due to related parties. We had a working capital
deficiency of $1,535,810 as of August 31, 2007.

To date, we have had negative cash flows from operations and we
have been dependent on sales of our equity securities and debt financing to meet
our cash requirements. We expect this situation to continue for the foreseeable
future. We anticipate that we will have negative cash flows during the next
twelve month period.

As indicated above, we anticipate that our estimated working
capital requirements and projected operating expenses for the next twelve months
will be $430,000 excluding the costs associated with the closing down the
operation of our reclaimed textiles business and excluding the costs associated
with locating suitable business opportunities. As we had a working capital
deficiency of $1,535,810 as of August 31, 2007, we will be required to raise
additional funds through the issuance of equity securities or through debt
financing in order to carry-out our plan of operations for the next twelve month
period. There can be no assurance that we will be successful in raising the
required capital or that actual cash requirements will not exceed our
estimates.

Given that we have not achieved profitable operations to date,
our cash requirements are subject to numerous contingencies and risk factors
beyond our control, including operation and acquisition risks, competition from
well-funded competitors, and our ability to manage growth. We can offer no
assurance that our company will generate cash flow sufficient to achieve
profitable operations or that our expenses will not exceed our projections. If
our expenses exceed estimates, we will require additional monies during the next
twelve months to execute our business plan.

There are no assurances that we will be able to obtain funds
required for our continued operation. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain
additional financing on a timely basis, we will not be able to meet our other
obligations as they become due and we will be forced to scale down or perhaps
even cease the operation of our business.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further long-term financing, successful operation or our reclaimed textiles
business or successful development of a suitable alternative business and,
finally, achieving a profitable level of operations. The issuance of additional
equity securities by us could result in a significant dilution in the equity
interests of our current stockholders. Obtaining commercial loans, assuming
those loans would be available, will increase our liabilities and future cash
commitments.

Operating Activities

Operating activities used cash of $1,452,828 during the year
ended August 31, 2007 as compared to $49,625 during the year ended August 31,
2006. The increase in cash used in operating activities during the twelve months
ended August 31, 2007 was largely the result of our increased net loss during
the period and the payment of a sponsoring agreement discussed in Note 12 to our
audited consolidated financial statements included herein.

Investing Activities

8

---

Investing activities used cash of $Nil during the years ended
August 31, 2007 and 2006.

Financing Activities

Financing activities provided cash of $1,644,723 during the
year ended August 31, 2007 as compared to financing activities which used cash
of $Nil during the year ended August 31, 2006. Short term advances, a demand
loan and amounts from related parties provided cash of $1,644,723 during the
year ended August 31, 2007.

Future Financings

We anticipate that additional funding, when required, will be
in the form of equity financing from the sale of our common stock or through
debt financing. However, we cannot provide investors with any assurance that we
will be able to raise sufficient funding from the sale of our common stock or
through debt financing on commercially reasonable terms to fund operations. We
do not currently have any arrangements in place for any future equity or debt
financing. Our limited operating history and our lack of significant tangible
capital assets makes it unlikely that we will be able to obtain significant debt
financing in the near future.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.

NEW ACCOUNTING PRONOUNCEMENTS

We have determined that there were no new accounting
pronouncements as of December 13, 2007 which have a material effect on our
company or our operations.

RISK FACTORS

Much of the information included in this annual report includes
or is based upon estimates, projections or other "forward-looking statements".
Such forward-looking statements include any projections or estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such estimates, projections or other "forward-looking
statements" involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward-looking statements". Prospective investors should consider
carefully the risk factors set out below.

RISKS RELATED TO OUR BUSINESS

We are a development stage company with a limited operating
history that makes it impossible to reliably predict future growth and operating
results.

Our business has been in operation for less than three years.
During this time, we have not been able to achieve profitable operations and
there are no assurances that we will be able to do so in the future. Potential
investors should be aware of the difficulties normally encountered by a new
enterprise and the high rate of failure of such enterprises. The potential for
future success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
development of a business in the area in which we operate and in connection with
the formation and commencement of operations of a new business in general. These
include, but are not limited to, unanticipated problems relating to fluctuations
in the supply and demand for recycled textile products, marketing, competition
and additional costs and expenses that may exceed current estimates. There is no
history upon which to base any assumption as to the likelihood that we will
prove

9

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successful, and there can be no assurance that we will generate
significant operating revenues in the future or ever achieve profitable
operations.

These and other factors may had a negative impact on our
ability to sell reclaimed textiles sourced by us to international purchasers.
This, in turn, had a significant negative impact on our business, results of
operations and financial condition.

Regarding the alternative energy business opportunities that
we are actively pursuing in Europe, North America and South America, our Company
anticipates it will have access to a broad range of equipment, products and
accessories and offer these products through a new e-commerce solution and sales
force, with the first market being in Canada and soon, expansion
internationally. If we are is unable to source out these products and services,
establish viable relationships with third parties, small entrepreneurs and
existing petroleum providers, keep up with technological advancements, compete
effectively in the relevant markets catering to the individual consumer level as
well as a commercial / retail level including the service station concept, raise
funds, obtain all necessary government and regulatory approvals including North
and South America, inadvertently infringe on third party intellectual property,
this could negatively impact our future operations and financial
condition.

To mitigate the above mentioned risk, our Company's focus is to
create a portfolio of three primary activities (raw materials,
wholesale/manufacturing, and retail) in the ethanol and biodiesel industries and
diligently be selective in entering these business segments.

Our two executive officers, have other business interests,
and as a result, they may not be willing or able to devote a sufficient amount
of time to our business operations, thereby limiting the success of our
company.

Richard Ritter v. Raffay our President and Prof. Franke our
Chief Technology Officer, presently spend approximately 25% of their business
time on business management services for our company and retains the necessary
consultants to assist in the development of our business on an as needed basis.
Due to the time commitments from Mr. v Raffays and Mr. Frankes other business
interests, Mr. v Raffay and Mr. Franke may not be able to provide sufficient
time to the management of our business in the future and our business may be
periodically interrupted or delayed as a result of Mr. v Raffays and Mr.
Frankes other business interests. To mitigate any such interruption, we are
currently seeking to add additional management and will also continue to retain
the necessary consultants in future exploration activities.

Upon completion of a business opportunity or combination,
there can be no assurance that we will be able to successfully manage or achieve
growth of that business opportunity or combination.

Our ability to achieve growth upon the acquisition of a
suitable business opportunity or business combination will be dependent upon a
number of factors including our ability to hire and train management and other
employees and the adequacy of our financial resources. There can be no assurance
that we will be able to successfully manage any business opportunity or business
combination. Failure to manage anticipated growth effectively and efficiently
could have a material adverse effect on our company.

If we complete a business opportunity or combination,
management of our Company may be required to sell or transfer common shares and
resign as members of our board of directors.

A business combination or acquisition of a business opportunity
involving the issuance of our common shares may result in new shareholders
obtaining a controlling interest in our company. Any such business combination
or acquisition of a business opportunity may require management of our company
to sell or transfer all or a portion of the shares they hold in our company and
require such individuals to resign as members of our board. The resulting change
in control of our company could result in the removal of one or more of our
present officers and directors and a corresponding reduction in or elimination
of their participation in the future affairs of our Company.

If we complete a business opportunity or combination, we may
be required to issue a substantial number of common shares which would dilute
the shareholdings of our current shareholders and result in a change of control
of our company.

We may pursue the acquisition of a business opportunity or a
business combination with a private company. The likely result of such a
transaction would result in our company issuing common shares to shareholders of
such private company. Issuing

10

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previously authorized and unissued common shares in the capital
of our company will reduce the percentage of common shares owned by existing
shareholders and may result in a change in the control of our company and our
management.

Other than a Letter of Intent signed on September 25, 2007,
we have no definitive agreement for a business combination or other transaction
and there can be no assurance that we will be able to successfully identify and
evaluate a suitable business opportunity.

As at the date of this report, we have a signed a letter of
intent to acquire private entity. The success of our Company following an entry
into any business opportunity or business combination will depend to a great
extent on the operations, financial condition and management of any identified
business opportunity. While management intends to seek business opportunities
and/or business combinations with entities with established operating histories,
there is no assurance that we will successfully locate business opportunities
meeting such criteria. In the event that we complete a business combination or
otherwise acquire a business opportunity, the success of our operations may be
dependent upon management of the successor firm or venture partner firm,
together with a number of other factors beyond our control.

As there are a large number of established and well-financed
entities actively seeking suitable business opportunities and business
combinations, we are at a competitive disadvantage in identifying and completing
such opportunities.

We are, and will continue to be, an insignificant participant
seeking a suitable business opportunity or business combination. A large number
of established and well-financed entities, including venture capital firms, are
active in seeking suitable business opportunities or business combinations which
may also be desirable target candidates for our company. Virtually all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than our company. Consequently, we are at a competitive
disadvantage in identifying possible business opportunities and completing a
business combination. In addition, we will also compete with numerous other
small public companies seeking suitable business opportunities or business
combinations.

RISKS RELATED TO OUR COMMON STOCK

Our common stock is illiquid and shareholders may be unable
to sell their shares.

There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. These fluctuations may adversely affect the trading
price of our common shares.

Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commission's penny stock regulations
which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines "penny stock" to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and "accredited investors". The term
"accredited investor" refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a

11

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suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

The National Association of Securities Dealers, or NASD, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

In addition to the "penny stock" rules described above, the
NASD has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the NASD believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock and have an adverse effect on the market for
our shares.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following consolidated financial statements are filed as part of
this annual report:

|1. | Report of Independent Registered Public
      Accounting Firm;                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                      
|2. | Consolidated Balance Sheets as at August 31,
      2007 and August 31, 2006;                                                                         
|   |                                                                                                                                                      
|3. | Consolidated Statements of Operations for the
      years ended August 31, 2007 and August 31, 2006;                                                 
|   |                                                                                                                                                      
|4. | Consolidated Statements of Cash Flows for the
      years ended August 31, 2007 and August 31, 2006;                                                 
|   |                                                                                                                                                      
|5. | Consolidated Statements of Stockholders Equity
      (Deficiency) for the period November 15, 2004 (Date of Inception) to
      August 31, 2007; and
|   |                                                                                                                                                      
|6. | Notes to Consolidated Financial Statements
      dated August 31, 2007.                                                                              



12

---









ALGODYNE ETHANOL ENERGY CORP.

REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

August 31, 2007 and 2006

(Stated in US Dollars)







13

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Stockholders, AlgoDyne Ethanol Energy Corp. (A
Development Stage Company)

We have audited the accompanying consolidated balance sheets of
AlgoDyne Ethanol Energy Corp. (A Development Stage Company) and its subsidiaries
as of August 31, 2007 and 2006 and the related consolidated statements of
operations, cash flows and stockholders deficiency for the years ended August
31, 2007 and 2006. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States of America). Those
standards require that we plan and perform an audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of AlgoDyne Ethanol Energy Corp. and its subsidiaries as of August 31,
2007 and 2006 and the results of their operations and their cash flows for the
years ended August 31, 2007 and 2006 in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements referred to
above have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 1 to the consolidated financial statements, the
Company has a working capital deficiency and is yet to attain profitable
operations which raise substantial doubt about the Companys ability to continue
as a going concern. Managements plan in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

|Vancouver, Canada | AMISANO HANSON     
|----------------- | ---------------------
|December 7, 2007  | Chartered Accountants





|750 WEST PENDER STREET, SUITE 604 | TELEPHONE: | 604-689-0188     
|--------------------------------- | ---------- | -----------------
|VANCOUVER CANADA                  | FACSIMILE: | 604-689-9773     
|V6C 2T7                           | E-MAIL:    | amishan@telus.net



14

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|ALGODYNE ETHANOL ENERGY CORP.
|-----------------------------
|(A Development Stage Company)
|CONSOLIDATED BALANCE SHEETS  
|August 31, 2007 and 2006     
|(Stated in US Dollars)       

|**ASSETS**                                                         |  |   |            |   | 2007       |        |   | 2006    |  
|------------------------------------------------------------------ |  | - | ---------- | - | ---------- | ------ | - | ------- | -
|                                                                   |  |   |            |   |            |        |   |         |  
|Current                                                            |  |   |            |   |            |        |   |         |  
|Cash                                                               |  |   |            | $ | 198,357    |        | $ | 6,628   |  
|Prepaid
      expenses                                             |  |   | 8,954      |   |            | 320    |  
|Current assets of
      discontinued operations  Note 8           |  |   | 921        |   |            | 50,361 |  
|                                                                   |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            | $ | 208,232    |        | $ | 57,309  |  
|                                                                   |  |   |            |   |            |        |   |         |  
|LIABILITIES                                                        |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            |   |            |        |   |         |  
|Current                                                            |  |   |            |   |            |        |   |         |  
|Accounts
      payable and accrued liabilities  Notes 5 and 6     |  | $ | 94,429     |   | $          | 33,686 |  
|Advances payable  Note 4                                          |  |   | 30,461     |   |            | -      |  
|Loans payable
       Note 5                                       |  |   | 1,587,120  |   |            | -      |  
|Due to related parties  Note
      6                              |  |   | 27,932     |   |            | 790    |  
|Current
      liabilities of discontinued operations  Note 8      |  |   | 4,100      |   |            | 37,414 |  
|                                                                   |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            |   | 1,744,042  |        |   | 71,890  |  
|                                                                   |  |   |            |   |            |        |   |         |  
|STOCKHOLDERS
      DEFICIENCY                                     |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            |   |            |        |   |         |  
|Common stock  $0.001 par value 
      Notes 3, 12 and 13         |  |   |            |   |            |        |  
|600,000,000 shares authorized                                      |  |   |            |   |            |        |   |         |  
|55,800,000
      shares issued and outstanding (2006  75,900,000) |  |   |            |   | 55,800     |        |   | 75,900  |  
|Additional paid-in capital (deficiency)                            |  |   | 19,476     |   |            | (624   | )
|Deficit                                                            |  |   |            |   | (255,597   | )      |   | (90,490 | )
|Deficit accumulated during the development stage                   |  |   | (1,355,801 | ) |            | -      |  
|Accumulated other comprehensive
      income                       |  |   | 312        |   |            | 633    |  
|                                                                   |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            |   | (1,535,810 | )      |   | (14,581 | )
|                                                                   |  |   |            |   |            |        |   |         |  
|                                                                   |  |   |            | $ | 208,232    |        | $ | 57,309  |  

Nature and Continuance of Operations  Note 1 Commitments 
Notes 12 and 13 Subsequent Events  Notes 12 and 13

15

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|ALGODYNE ETHANOL ENERGY CORP.                         
|------------------------------------------------------
|(A Development Stage Company)                         
|CONSOLIDATED STATEMENTS OF OPERATIONS                 
|for the years ended August 31, 2007 and 2006 and      
|for the period from June 1, 2007 (Date of Commencement
|of the Development Stage) to August 31, 2007          
|(Stated in US Dollars)                                

|                                                     |   |            |   |   |         |   |   | June 1, 2007 |  
|---------------------------------------------------- | - | ---------- | - | - | ------- | - | - | ------------ | -
|                                                     |   |            |   |   |         |   |   | (Date of     |  
|                                                     |   |            |   |   |         |   |   | Commencement |  
|                                                     |   |            |   |   |         |   |   | of the       |  
|                                                     |   |            |   |   |         |   |   | Development  |  
|                                                     |   |            |   |   |         |   |   | Stage) to    |  
|                                                     |   |            |   |   |         |   |   | August 31,   |  
|                                                     |   | 2007       |   |   | 2006    |   |   | 2007         |  
|                                                     |   |            |   |   |         |   |   |              |  
|General and administrative expenses                  |   |            |   |   |         |   |   |              |  
|Accounting and audit fees                            | $ | 41,808     |   | $ | 35,415  |   | $ | 3,761        |  
|Advertising and
      marketing  Note 12            |   | 1,212,120  |   |   | -       |   |   | 1,212,120    |  
|Bank charges and interest                            |   | 892        |   |   | 148     |   |   | 108          |  
|Consulting fees  Note
      6                       |   | 101,631    |   |   | -       |   |   | 69,571       |  
|Filing fees                                          |   | 2,351      |   |   | 2,919   |   |   | 1,854        |  
|Interest on demand
      loans payable               |   | 29,691     |   |   | -       |   |   | 26,223       |  
|Investor relations                                   |   | 26,017     |   |   | -       |   |   | 17,552       |  
|Legal fees                                           |   | 32,483     |   |   | 33,370  |   |   | 6,804        |  
|License fees                                         |   | 10,000     |   |   | -       |   |   | 10,000       |  
|Office and
      administration                      |   | 35,629     |   |   | 330     |   |   | 15,412       |  
|Rent                                                 |   | 3,880      |   |   | 1,165   |   |   | 3,400        |  
|Telephone                                            |   | 1,015      |   |   | 300     |   |   | 333          |  
|Transfer agent                                       |   | 2,420      |   |   | 1,805   |   |   | 50           |  
|Travel                                               |   | 5,000      |   |   | -       |   |   | 5,000        |  
|                                                     |   |            |   |   |         |   |   |              |  
|Loss from continuing operations for the
      period |   | (1,504,937 | ) |   | (75,452 | ) |   | (1,372,188   | )
|                                                     |   |            |   |   |         |   |   |              |  
|Income (loss) from discontinued operations           |   |            |   |   |         |   |   |              |  
|for the period  Note 8                              |   | (15,971    | ) |   | 2,391   |   |   | 16,387       |  
|                                                     |   |            |   |   |         |   |   |              |  
|Net loss for the period                              |   | (1,520,908 | ) |   | (73,061 | ) |   | (1,355,801   | )
|                                                     |   |            |   |   |         |   |   |              |  
|Other comprehensive income:                          |   |            |   |   |         |   |   |              |  
|Foreign currency
      translation adjustment        |   | (321       | ) |   | 439     |   |   | (4,465       | )
|                                                     |   |            |   |   |         |   |   |              |  
|Comprehensive loss for the period                    | $ | (1,521,229 | ) | $ | (72,622 | ) | $ | (1,360,266   | )

/contd

16

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Continued

|ALGODYNE ETHANOL ENERGY CORP.                         
|------------------------------------------------------
|(A Development Stage Company)                         
|CONSOLIDATED STATEMENTS OF OPERATIONS                 
|for the years ended August 31, 2007 and 2006 and      
|for the period from June 1, 2007 (Date of Commencement
|of the Development Stage) to August 31, 2007          
|(Stated in US Dollars)                                

|                                                        |   |            |   |   |            |   |   | June 1, 2007 |  
|------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ------------ | -
|                                                        |   |            |   |   |            |   |   | (Date of     |  
|                                                        |   |            |   |   |            |   |   | Commencement |  
|                                                        |   |            |   |   |            |   |   | of the       |  
|                                                        |   |            |   |   |            |   |   | Development  |  
|                                                        |   |            |   |   |            |   |   | Stage) to    |  
|                                                        |   |            |   |   |            |   |   | August 31,   |  
|                                                        |   | 2007       |   |   | 2006       |   |   | 2007         |  
|                                                        |   |            |   |   |            |   |   |              |  
|Basic and diluted loss from continuing
      operations | $ | (0.02      | ) | $ | (0.01      | ) | $ | (0.02        | )
|                                                        |   |            |   |   |            |   |   |              |  
|Basic and diluted income (loss) from
      discontinued |   |            |   |   |            |   |   |              |  
|operations                                              | $ | (0.00      | ) | $ | (0.00      | ) | $ | (0.00        | )
|                                                        |   |            |   |   |            |   |   |              |  
|Basic and diluted loss per share                        | $ | (0.02      | ) | $ | (0.01      | ) | $ | (0.02        | )
|                                                        |   |            |   |   |            |   |   |              |  
|                                                        |   |            |   |   |            |   |   |              |  
|Weighted average number of shares
      outstanding     |   | 63,950,137 |   |   | 75,900,000 |   |   | 55,800,000   |  



17

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|ALGODYNE ETHANOL ENERGY CORP.                         
|------------------------------------------------------
|(A Development Stage Company)                         
|CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|for the years ended August 31, 2007 and 2006 and      
|for the period from June 1, 2007 (Date of Commencement
|of the Development Stage) to August 31, 2007          
|(Stated in US Dollars)                                

|                                                                    |   |            |   |   |         |   |   | June 1, 2007 |  
|------------------------------------------------------------------- | - | ---------- | - | - | ------- | - | - | ------------ | -
|                                                                    |   |            |   |   |         |   |   | (Date of     |  
|                                                                    |   |            |   |   |         |   |   | Commencement |  
|                                                                    |   |            |   |   |         |   |   | of the       |  
|                                                                    |   |            |   |   |         |   |   | Development  |  
|                                                                    |   |            |   |   |         |   |   | Stage) to    |  
|                                                                    |   |            |   |   |         |   |   | August 31,   |  
|                                                                    |   | 2007       |   |   | 2006    |   |   | 2007         |  
|                                                                    |   |            |   |   |         |   |   |              |  
|Operating Activities                                                |   |            |   |   |         |   |   |              |  
|Net loss for the period                                             | $ | (1,520,908 | ) | $ | (73,061 | ) | $ | (1,355,801   | )
|Loss (income) from
      discontinued operations                    |   | 15,971     |   |   | (2,391  | ) |   | (16,387      | )
|Changes in non-cash working capital
      balances                  |   |            |   |   |         |   |   |              |  
|related to
      operations                                         |   |            |   |   |         |   |   |              |  
|Prepaid
      expenses                                              |   | (8,634     | ) |   | (95     | ) |   | 1,205,352    |  
|Accounts
      payable and accrued liabilities                      |   | 60,743     |   |   | 25,922  |   |   | 31,636       |  
|                                                                    |   |            |   |   |         |   |   |              |  
|                                                                    |   | (1,452,828 | ) |   | (49,625 | ) |   | (135,200     | )
|                                                                    |   |            |   |   |         |   |   |              |  
|Financing Activities                                                |   |            |   |   |         |   |   |              |  
|Short term advances                                                 |   | 30,461     |   |   | -       |   |   | -            |  
|Demand loans                                                        |   | 1,587,120  |   |   | -       |   |   | -            |  
|Due to related parties                                              |   | 27,142     |   |   | -       |   |   | -            |  
|                                                                    |   |            |   |   |         |   |   |              |  
|                                                                    |   | 1,644,723  |   |   | -       |   |   | -            |  
|                                                                    |   |            |   |   |         |   |   |              |  
|Foreign currency translations effect on cash                        |   | (166       | ) |   | (51     | ) |   | (166         | )
|                                                                    |   |            |   |   |         |   |   |              |  
|Increase (decrease) in cash during the period from
      continuing |   |            |   |   |         |   |   |              |  
|operations                                                          |   | 191,729    |   |   | (49,676 | ) |   | (135,366     | )
|                                                                    |   |            |   |   |         |   |   |              |  
|Increase (decrease) in cash for the period
      from discontinued  |   |            |   |   |         |   |   |              |  
|operations  Note 8                                                 |   | (3,150     | ) |   | (15,883 | ) |   | 192          |  
|                                                                    |   |            |   |   |         |   |   |              |  
|Increase (decrease) in cash during the period                       |   | 188,579    |   |   | (65,559 | ) |   | (135,174     | )
|                                                                    |   |            |   |   |         |   |   |              |  
|Cash, beginning of the period                                       |   | 9,949      |   |   | 75,508  |   |   | 333,702      |  
|                                                                    |   |            |   |   |         |   |   |              |  
|Cash, end of the period                                             |   | 198,528    |   |   | 9,949   |   |   | 198,528      |  
|                                                                    |   |            |   |   |         |   |   |              |  
|Less: cash, end of the period, discontinued operations              |   | (171       | ) |   | (3,321  | ) |   | (171         | )
|                                                                    |   |            |   |   |         |   |   |              |  
|Cash, end of the period, continuing operations                      | $ | 198,357    |   | $ | 6,628   |   | $ | 198,357      |  

/contd

18

---

Continued

|ALGODYNE ETHANOL ENERGY CORP.                         
|------------------------------------------------------
|(A Development Stage Company)                         
|CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|for the years ended August 31, 2007 and 2006 and      
|for the period from June 1, 2007 (Date of Commencement
|of the Development Stage) to August 31, 2007          
|(Stated in US Dollars)                                

|                                                         |   |      |  |  |       |  |   | June 1, 2007 | 
|-------------------------------------------------------- | - | ---- |  |  | ----- |  | - | ------------ | 
|                                                         |   |      |  |  |       |  |   | (Date of     | 
|                                                         |   |      |  |  |       |  |   | Commencement | 
|                                                         |   |      |  |  |       |  |   | of the       | 
|                                                         |   |      |  |  |       |  |   | Development  | 
|                                                         |   |      |  |  |       |  |   | Stage) to    | 
|                                                         |   |      |  |  |       |  |   | August 31,   | 
|                                                         |   | 2007 |  |  | 2006  |  |   | 2007         | 
|                                                         |   |      |  |  |       |  |   |              | 
|Supplementary disclosure of cash flow
      information: |   |      |  |  |       |  |   |              | 
|Cash paid for:                                           |   |      |  |  |       |  |   |              | 
|Interest                                                 | $ | - $  |  |  | -     |  | $ | -            | 
|                                                         |   |      |  |  |       |  |   |              | 
|Income taxes                                             | $ | - $  |  |  | 3,543 |  | $ | -            | 



19

---

|ALGODYNE ETHANOL ENERGY CORP.                                                
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
      (DEFICIENCY)           
|for the period November 15, 2004 (Date of Inception) to
      August 31, 2007
|(Stated in US Dollars)                                                       

|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   | Accumulated |   |   |            |  
|------------------------------- |  | ------------ | - | - | --------------- | - | - | ------- | - | - | ----------- | - | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   | Deficit     |   |   | Other       |   |   |            |  
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   | Accumulated |   |   | Compre-     |   |   |            |  
|                                |  | Note 1       |   |   | Additional      |   |   |         |   |   | During the  |   |   | hensive     |   |   |             |  
|                                |  | Common Stock |   |   | Paid-in         |   |   |         |   |   | Development |   |   | Income      |   |   |             |  
|                                |  | Number       |   |   | Par
      Value |   |   | Capital |   |   | Deficit     |   |   | Stage       |   |   | (Loss)      |   |   | Total      |  
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Issued for cash:                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|At initial capitalization       |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|at $0.000125                    |  | 48,000,000   |   | $ | 48,000          |   | $ | (42,000 | ) | $ | -           |   | $ | -           |   | $ | -           |   | $ | 6,000      |  
|Pursuant to private placements  |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|at $0.0025                      |  | 27,900,000   |   |   | 27,900          |   |   | 41,850  |   |   | -           |   |   | -           |   |   | -           |   |   | 69,750     |  
|Net loss for the period         |  | -            |   |   | -               |   |   | -       |   |   | (17,429     | ) |   | -           |   |   | -           |   |   | (17,429    | )
|Foreign currency translation    |  | -            |   |   | -               |   |   | -       |   |   | -           |   |   | -           |   |   | 194         |   |   | 194        |  
|Adjustment                      |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Deemed dividend                 |  | -            |   |   | -               |   |   | (474    | ) |   | -           |   |   | -           |   |   | -           |   |   | (474       | )
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Balance, August 31, 2005        |  | 75,900,000   |   |   | 75,900          |   |   | (624    | ) |   | (17,429     | ) |   | -           |   |   | 194         |   |   | 58,041     |  
|Net loss for the year           |  | -            |   |   | -               |   |   | -       |   |   | (73,061     | ) |   | -           |   |   | -           |   |   | (73,061    | )
|Foreign currency translation    |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Adjustment                      |  | -            |   |   | -               |   |   | -       |   |   | -           |   |   | -           |   |   | 439         |   |   | 439        |  
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Balance, August 31, 2006        |  | 75,900,000   |   |   | 75,900          |   |   | (624    | ) |   | (90,490     | ) |   | -           |   |   | 633         |   |   | (14,581    | )
|Cancellation of shares  Note 3 |  | (20,100,000  | ) |   | (20,100         | ) |   | 20,100  |   |   | -           |   |   | -           |   |   | -           |   |   | -          |  
|Net loss for the period         |  | -            |   |   | -               |   |   | -       |   |   | (165,107    | ) |   | -           |   |   | -           |   |   | (165,107   | )
|Net loss for the period         |  | -            |   |   | -               |   |   | -       |   |   | -           |   |   | (1,355,801  | ) |   | -           |   |   | (1,355,801 | )
|Foreign currency translation    |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Adjustment                      |  | -            |   |   | -               |   |   | -       |   |   | -           |   |   | -           |   |   | (321        | ) |   | (321       | )
|                                |  |              |   |   |                 |   |   |         |   |   |             |   |   |             |   |   |             |   |   |            |  
|Balance, August 31, 2007        |  | 55,800,000   |   | $ | 55,800          |   | $ | 19,476  |   | $ | (255,597    | ) | $ | (1,355,801  | ) | $ | 312         |   | $ | (1,535,810 | )



20

---

|ALGODYNE ETHANOL ENERGY CORP.                 
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|August 31, 2007 and 2006                      
|(Stated in US Dollars)                        

|Note 1 | Nature and Continuance of Operations
|------ | ------------------------------------

AlgoDyne Ethanol Energy Corp. (the
Company) was incorporated on November 15, 2004 under the laws of the State of
Nevada, USA with the name Eagle Ridge Ventures Inc. The Company is a public
company whose common shares are listed for trading on the United States
Over-the-Counter Bulletin Board.

By agreement dated October 24, 2006 and
effective November 3, 2006, a wholly-owned subsidiary of the Company, Algodyne
Ethanol Energy Corp., incorporated on October 19, 2006 under the laws of the
State of Nevada, was merged into the Company for the sole purpose of changing
the Companys name. The Company became the surviving entity and changed its name
from Eagle Ridge Ventures Inc. to AlgoDyne Ethanol Energy Corp. to further
reflect the Companys anticipation of pursuing other business opportunities. The
Company also incorporated an additional subsidiary on November 13, 2006 under
the name of AlgoDyne Energy Operation Corp., a Nevada corporation, which is
inactive. In conjunction with the aforementioned merger, the Company forward
split its authorized, issued and outstanding common stock on a 8 new for 1 old
basis. The number of shares, amount of consideration allocated to par value and
additional paid-in capital have been retroactively restated to reflect this
forward split.

The Company owns 100% of the issued and
outstanding common shares of Freshly Pressed Enterprises Inc. (Freshly Pressed),
a British Columbia, Canada company incorporated on September 30, 2004, whose
business is sourcing, selling and shipping cargo containers of reclaimed
textiles to developing countries. During the year ended August 31, 2007, the
Company abandoned the business of Freshly Pressed (Note 8).

As at June 1, 2007, the Company became
a development stage company. The Company effected a change in business and
commenced concentrating on developing ethanol and bio-diesel technologies (Note
13).

These financial statements have been
prepared in accordance with generally accepted accounting principles applicable
to a going concern, which assumes that the Company will be able to meet its
obligations and continue its operations for its next fiscal year. Realization
values may be substantially different from carrying values as shown and these
financial statements do not give effect to adjustments that would be necessary
to the carrying values and classification of assets and liabilities should the
Company be unable to continue as a going concern. At August 31, 2007, the
Company had not yet achieved profitable operations, has accumulated losses of
$1,611,398 since its inception, has a working capital deficiency of $1,535,810
and expects to incur further losses in the development of its business, all of
which casts substantial doubt about the Companys ability to continue as a going
concern. The Companys ability to continue as a going concern is dependent upon
its ability to generate future profitable operations and/or to obtain the
necessary financing to meet its obligations and repay its liabilities arising
from normal business operations when they come due. Management has no formal
plan in place to address this concern but considers that the Company will be
able to obtain additional funds by equity financing and/or related party
advances; however there is no assurance of additional funding being available.

|Note 2 | Significant Accounting Policies
|------ | -------------------------------

These consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
in the United States of America. Because a precise determination of many assets
and liabilities is dependent upon future events, the preparation of consolidated
financial statements for a period necessarily involves the use of estimates
which have been made using careful judgement. Actual results may vary from these
estimates.

21

---

The consolidated financial statements
have, in managements opinion, been properly prepared within the framework of
the significant accounting policies summarized below:

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

These consolidated financial
statements include the accounts of the Company and its wholly-owned
subsidiaries, AlgoDyne Energy Operation Corp. (an inactive Nevada incorporated
corporation) and Freshly Pressed Enterprises, Inc. (a British Columbia company).
All inter-company transactions and balances have been eliminated.

| | b) | Development Stage Company
| | -- | -------------------------

The Company complies with the
Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and
Reporting by Development Stage Enterprises for its characterization of the
Company as a development stage company. The Company is devoting substantially
all of its present efforts to establish a new business and none of its planned
principal operations have commenced. For the purpose of providing cumulative
amounts for the statement of operations and cash flows, these amounts consider
only those losses for the period from the Companys new development stage
activity effective June 1, 2007.

| | c) | Revenue Recognition and Accounts
  Receivable
| | -- | ---------------------------------------------

The Company recognizes sales when the
following criteria are met: persuasive evidence of an agreement exists, shipment
has occurred, the price to the buyer is fixed and determinable and
collectibility is reasonably assured. Shipping and handling charges billed to
customers are included in revenue, and the related shipping and handling costs
are included in cost of goods sold.

Accounts receivable consists of
receivables from customers. The Company does not provide allowances for
merchandise returns or claims due to the nature of the goods sold (reclaimed
textiles), however, the Company does provide an allowance for doubtful accounts
through periodic evaluations of the aging of accounts receivable.

| | d) | Advertising Costs
| | -- | -----------------

Advertising costs are expenses as
incurred, unless future benefits are probable.

| | e) | Foreign Currency
Translation
| | -- | ----------------------------

The Companys wholly-owned subsidiary
translates amounts from its functional currency, Canadian dollars, to the
reporting currency, United States dollars, in accordance with the SFAS No. 52,
Foreign Currency Translation. At each balance sheet date, recorded balances
that are denominated in a currency other than the reporting currency are
adjusted to reflect the current exchange rate which may give rise to a foreign
currency translation adjustment accounted for as a separate component of
stockholders equity.

Transactions undertaken in currencies
other than the reporting currency are translated at the exchange rate in effect
as of the transaction date. Any exchange gains or losses are included in the
statement of operations.

| | f) | Income Taxes
| | -- | ------------

The Company follows SFAS No. 109,
Accounting for Income Taxes which requires the use of the asset and liability
method of accounting for income taxes. Under the asset and liability method of
SFAS 109, deferred tax assets and liabilities are recognized for future tax
consequences attributable to temporary differences between the financial
statements carrying amounts of existing assets and liabilities and loss carry
forwards and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the year
in which those temporary differences are expected to be recovered or
settled.

22

---

| | g) | Basic and Diluted Loss Per
Share
| | -- | --------------------------------

The Company computes net loss per
share in accordance with SFAS No. 128, "Earnings Per Share". SFAS 128 requires
presentation of both basic and diluted loss per share (LPS) on the face of the
income statement. Basic LPS is computed by dividing net loss available to common
shareholders by the weighted average number of common shares outstanding during
the year. Diluted LPS gives effect to all dilutive potential common shares
outstanding during the year including stock options, using the treasury stock
method, and convertible preferred stock, using the if-converted method. In
computing diluted LPS, the average stock price for the year is used in
determining the number of shares assumed to be purchased from the exercise of
stock options or warrants. Diluted LPS excludes all dilutive potential common
shares if their effect is anti dilutive.

| | h) | Financial Instruments
| | -- | ---------------------

The carrying values of cash, accounts
receivable, accounts payable and accrued liabilities, advances payable, loans
payable and due to related parties approximate their carrying values due to the
short-term maturity of these instruments. Unless otherwise noted, it is
managements opinion that the Company is not exposed to significant interest,
currency or credit risks arising from these financial instruments.

| | i) | Recent Accounting
Pronouncements
| | -- | --------------------------------

In July 2006, FASB issued FASB
Interpretation No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48
clarifies the accounting for income taxes by prescribing the minimum recognition
threshold a tax position is required to meet before being recognized in the
financial statements. FIN 48 also provides guidance on derecognition,
measurement, classification, interest and penalties, accounting in interim
periods, disclosure and transition. The interpretation applies to all tax
positions related to income taxes subject to FASB Statement No. 109. FIN 48 is
effective for fiscal years beginning after December 15, 2006. Differences
between the amounts recognized in the statements of financial position prior to
the adoption of FIN 48 and the amounts reported after adoption should be
accounted for as a cumulative-effect adjustment recorded to the beginning
balance of retained earnings. The Company does not believe the adoption of FIN
48 will have a material impact on its financial statements.

In September 2006, FASB issued SFAS
No. 157, Fair Value Measurements in order to define fair value, establish a
framework for measuring fair value and to expand disclosures about fair value
measurements. This statement only applies when other standards require or permit
the fair value measurement of assets and liabilities. This statement is
effective for fiscal periods commencing after November 15, 2007 and the Company
does not expect the adoption of this statement to have a significant effect on
the Companys results of operations or financial position.

On February 15, 2007, FASB issued SFAS
No. 159 The Fair Value Option for Financial Assets and Financial Liabilities.
This Statement establishes presentation and disclosure requirements designed to
facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. SFAS No. 159 is
effective for the Companys financial statements issued in 2008. The Company is
currently evaluating the impact that the adoption of SFAS No. 159 might have on
its financial position or results of operations.

|Note 3 | Capital Stock Notes 12 and 13
|------ | ------------------------------

During the period from November 15,
2004 (Date of Inception) to August 31, 2006, the Company issued 75,900,000
common shares for proceeds of $75,750. Included in these share issuances were
50,800,000 common shares issued to directors and former directors of the Company
for proceeds of $13,000.

On January 26, 2007, the former
President and director of the Company tendered 20,100,000 common shares at a par
value of $0.01 for cancellation for nominal consideration. The cancellation and
return to treasury of shares was recorded at its previously recorded value.

23

---

At August 31, 2007 and 2006, there were
no outstanding stock options or warrants.

|Note 4 | Advances Payable
|------ | ----------------

The Company has received short-term
advances from a former director of the Company that are payable on demand,
unsecured and non-interest bearing.

|Note 5 | Loans Payable
|------ | -------------

During the year ended August 31, 2007,
the Company was loaned a total of $1,587,120. These loans are payable on demand,
unsecured and bear interest at 6% per annum. At August 31, 2007, accrued
interest of $29,691 is included in accounts payable and accrued liabilities.

|Note 6 | Related Party Transactions Note 4
|------ | ----------------------------------

The amounts due to related parties are
due to directors and former directors of the Company and represent cash advances
provided to the Company and unpaid compensation. These amounts are unsecured,
non-interest bearing and have no specific terms of repayment.

During the year ended August 31, 2007,
directors and officers of the Company charged $43,411 (2006- $Nil) in consulting
fees. Accrued liabilities at August 31, 2007 include $20,060 due to a director
of the Company for the aforementioned services.

During the year ended August 31, 2007,
the Company incurred $25,628 (August 31, 2006: $29,331) for executive
compensation, included in operating expenses of discontinued operations (Note
8), with respect to the former president of the Company.

|Note 7 | Segmented Information
|------ | ---------------------

During the period from November 15,
2004 to August 31, 2007, the Company operated one business segment which is
sourcing, selling and shipping cargo containers of reclaimed textiles to
developing countries. Revenues by geographic segment are as follows:

2007
    
    
    2006Canada
    $
    -
    
    $
    24,514United States of America
    
    72,688
    
    
    212,991$
    72,688
    
    $
    237,505


During the year ended August 31, 2007,
one customer accounted for 78% of revenues.

During the year ended August 31, 2006,
two customers accounted for 98% of revenues, 90% and 8% respectively

|Note 8 | Discontinued Operations
|------ | -----------------------

During the year ended August 31, 2007
(effective June 1, 2007), the Company abandoned the business operated by its
wholly-owned subsidiary, Freshly Pressed Enterprises, Inc. As a result, the
Company determined that this component met the criteria of classification as
discontinued operations in accordance with SFAS No. 114 Accounting for the
Impairment or Disposal of Long-lived Assets.

The consolidated financial statements
for the periods presented have been restated to present the operating results of
Freshly Pressed as discontinued operations.

The consolidated financial statements
include the following amounts as they relate to discontinued operations.

24

---

Balance Sheets
    
    2007
    
    
    2006Cash
    $
    171
    
    $
    3,321Accounts receivable
    
    -
    
    
    44,828Other current assets
    
    750
    
    
    2,212Current assets of discontinued operations
    $
    921
    
    $
    50,361Accounts payable
    $
    3,029
    
    $
    36,607Due to related party
    
    1,071
    
    
    807Current liabilities of discontinued operations
    $
    4,100
    
    $
    37,414Statements of Operations
    
    2007
    
    
    2006Revenue
    $
    72,688
    
    $
    237,505Cost of goods sold
    
    54,153
    
    
    199,70418,535
    
    
    37,801Operating expenses  Note 6
    
    (34,506
    )
    
    (35,410
    )Income (loss) from discontinued operations
    $
    (15,971
    )
    $
    2,391Statements of Cash FlowsCash used in operating activities
    $
    (3,003
    )
    $
    (7,508
    )Cash used in financing activity
    
    -
    
    
    (8,865
    )Effect of exchange rate changes on cash
    
    (147
    )
    
    490Change in cash from discontinued operations
    $
    (3,150
    )
    $
    (15,883
    )


|Note 9 | Income Taxes
|------ | ------------

The following table summarizes the
significant components of the Companys deferred tax assets:

2007
    
    
    2006Statutory tax rate
    
    33.1%
    
    
    18%Deferred tax assetsNon-capital loss
      carry-forward
    $
    527,205
    
    $
    16,000Less: valuation allowance
    
    (527,205
    )
    
    (16,000
    )$
    -
    
    $
    -


The amount taken into income as
deferred tax assets must reflect that portion of the income tax loss
carry-forwards that is more likely-than-not to be realized from future
operations. The Company has chosen to provide an allowance of 100% against all
available income tax loss carry-forwards, regardless of their time of
expiry.

At August 31, 2007, the Company has a
tax loss carryforward of $1,592,858 which will begin to expire in 2025, the
benefit of which has not been recorded in these financial statements.

|Note 10 | Comparative Figures
|------- | -------------------



25

---

Certain prior years comparative
figures have been reclassified to conform with the presentation used in the
current year.

|Note 11 | Financial Instruments
|------- | ---------------------

| | a) | Credit Risk:                                                                                                                                                                                                                                                  
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                               
| |    | The Company provides credit to its clients in the normal
      course of operations. It carries out, on a continuing basis, credit checks
      on its clients and maintains provisions for contingent losses.                                                
| |    |                                                                                                                                                                                                                                                               
| | b) | Foreign Currency Risk:                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                               
| |    | The Company is exposed to fluctuations in foreign
      currencies through accounts receivable and accounts payable to be settled
      in Canadian dollars. The Company monitors this exposure, but had no hedge
      positions at August 31, 2007 and 2006.

|Note 12 | Commitments Note 13
|------- | --------------------

On May 30, 2007 and amended on
September 30, 2007, the Company entered into a Sponsoring Agreement between
X-Raid GmbH Motorsport and NSP- Network Sport Promotion. The Sponsoring
Agreement provides the Company with the rights to increase its level of
awareness in the market place and advertise its future products in the context
of international automobile racing sports and events. Under the name patron of
the team and the campaign, "ALGODYNE Green Power Racing", the Sponsoring
Agreement gives the Company, the lead and title sponsor for a race team using
BMW race cars. The term of the Sponsoring Agreement covers two contractual
years, May 31, 2007 to May 30, 2008 and May 31, 2008 to April 30, 2009
respectively. Each contractual year requires payments of Euros 1,800,000. Of
this amount, Euros 900,000 ($1,212,120) was paid May 30, 2007 and has been
included in advertising and marketing expense. The remaining Euros 900,000 will
be paid in the form of common shares issued out of treasury on or before May 31,
2008. The share price, and thus the amount of shares for the first contractual
year, shall be the average market price of 10 trading day prices before the
issue date. The second contract term of the Sponsoring Agreement requires a cash
payment of Euros 900,000 on June 1, 2008 and the remaining Euros 900,000 will be
paid in the form of common shares issued out of treasury on or before June 10,
2008 using an average market share price of 10 trading day prices before the
issue date.

|Note 13 | Subsequent Events
|------- | -----------------

| | a) | By a Letter of Understanding (LOU) dated September 25,
      2007 and amended on October 8, 2007, the Company agreed to acquire 55% of
      the outstanding Class A common shares of Canadian Green Fuels, Inc.
      (Green), a company incorporated under the Business Corporations Act of
      Saskatchewan. Green is a development stage company which is developing a
      bio-diesel production facility.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | Pursuant to the terms of the LOU, the Company
    agreed:                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | iii)                                                                                                                                                                                                                                                                                                                                                                                                                  



26

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| | iv) | the Company will negotiate an employment contract for not
      less than two years for the President of Green;                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                    
| | v)  | the Company will agree to convert all Class C shares of
      Green (7,510 common shares) into common shares of the Company at $0.70 per
      share on or before January 30, 2008;
| |     |                                                                                                                                                                                    
| | vi) | the Company has until September 25, 2009 to acquire the
      remaining 45% of the outstanding Class A common shares of Green, valued at
      CDN$400,000.                        

This agreement is subject to the
completion of a formal purchase agreement on or before December 31, 2007.

| | b) | Subsequent to August 31, 2007, the Company received loans
      of $100,000, which is payable on demand, unsecured and bears interest at
      6% per annum.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



27

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ITEM 8. CHANGES IN REGISTRANTS CERTIFYING
ACCOUNTANT

There has been no change in our certifying accountant for the
past two most recent fiscal years or interim period.

ITEM 8A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange Act, as of the
date of the filing of this annual report on Form 10-KSB (the Evaluation Date),
being August 31, 2007, we have carried out an evaluation of the effectiveness of
the design and operation of our company's disclosure controls and procedures.
This evaluation was carried out under the supervision and with the participation
of our management, including our President (who is acting as our Chief Executive
Officer and Chief Financial Officer). Based upon that evaluation, our President
(who is acting as our Chief Executive Officer and Chief Financial Officer)
concluded that as of the Evaluation Date, our disclosure controls and procedures
are effective to ensure that material information relating to it would be made
known to us b others, particularly during the period in which this annual report
on Form 10-KSB was being prepared. There have been no changes in our internal
controls over financial reporting that occurred during the period covered by
this report that have materially affected, or are reasonably likely to
materially affect our internal controls over financial reporting.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Exchange Act is accumulated and communicated to management, including our
President (who is acting as our Chief Executive Officer and Chief Financial
Officer) as appropriate, to allow timely decisions regarding required
disclosure. There were no significant changes in our internal controls or in
other factors that could significantly affect our disclosure controls and
procedures subsequent to the Evaluation Date, nor any significant deficiencies
or material weaknesses in such disclosure controls and procedures requiring
corrective actions.

ITEM 8B. OTHER INFORMATION

n.a.

ITEM 9. DIRECTORS, EXECUTIVE OFFICES, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

All directors of our Company hold office until the next annual
meeting of the stockholders or until their successors have been elected and
qualified. The officers of our Company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors, executive officers and significant employees, their ages, positions
held, and duration as such, are as follows:

Name
    Position Held with the Company
    Age
    Date First Elected or
      AppointedRichard Ritter v. Raffay
    Director, Chief
      Executive Officer, Chief Financial Officer, President, Secretary,
      Treasurer and Director
    53
    January 26,
      2007Prof. Hans-Jürgen Franke
    Chief
      Technology Officer, Director
    65
    May 22, 2007Vladislav Iaroukov
    Director
    49
    November 17,
      2006


Business Experience



28



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The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee, indicating the principal occupation during that
period, and the name and principal business of the organization in which such
occupation and employment were carried out.

Richard Ritter v.Raffay

On January 26, 2007, Richard Ritter v. Raffay was appointed as
our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial
Officer and a director of our company.

Mr. Raffay has a Master of Business Administration from the
Hamburg University for Economics and Politics and studied management economics
and law at the University of Hamburb, law faculty, Hamburg. Mr. Raffay has acted
as the managing director of Hanseatishe Commodity und Capital GmbH, and was a
senior corporate finance advisor

Prof. Hans-Jürgen Franke

On May 22, 2007 Prof. Hans-Jurgen Franke was appointed as a
director of our company.

Prof. Hans-Jürgen Franke brings a significant level of
experience in urban planning, design and technology research in alternative
energies and is ideally qualified to lead a team in developing innovative
solutions for alternative eco-fuel sources. With more than 30 years in regional
and urban planning, The company also looks to Prof. Frankes experience in
identifying marketing trends and industry applications emerging in the
alternative energy space.

Vladislav Iaroukov

Mr. Iaroukov became a director of our company on November 17,
2006. Mr. Iaroukov has over twenty years of computer experience and has been
employed with ViXS Systems as a senior software engineer since January 2003
where he designs, develops and maintains computer software programs. Prior to
that time, he was a contractor for Mailing Innovations where he developed an
application that formats documents for high-speed ink-jet printers and a senior
software engineer with Mobile Computing Corporation where he designed, developed
and maintained computer software programs. Mr. Iaroukov completed his Master of
Science, Cybernetics (Computer Science) in 1982 from the Institute of Steel and
Alloys in Moscow, Russia. Mr. Iaroukov became a Microsoft Certified Specialist
in January 2006.

Family Relationships

There are no family relationships among our directors or
officers.

Committees of the Board of Directors

We do not presently have a separately constituted audit
committee, compensation committee, nominating committee, executive committee or
any other committees of our board of directors.

Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an audit committee financial
expert as defined in Item 401(e) of Regulation S-B, and is independent as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. In
addition, we believe that retaining an independent director who would qualify as
an audit committee financial expert would be overly costly and burdensome and
is not warranted in our circumstances given the early stages of our development
and the fact that we have not generated any material revenues to date.

Code of Ethics

*29*

---

We have not yet adopted a corporate code of ethics. Our board
of directors is considering, over the next year, establishing a code of ethics
to deter wrongdoing and promote honest and ethical conduct; provide full, fair,
accurate, timely and understandable disclosure in public reports; comply with
applicable laws; ensure prompt internal reporting of code violations; and
provide accountability for adherence to the code.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not
been involved in any of the following events during the past five years:

|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                
|3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                                
|4  | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment has not been reversed, suspended, or
vacated.                                           

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
our common stock and other equity securities, on Forms 3, 4 and 5 respectively.
Executive officers, directors and greater than 10% shareholders are required by
the Securities and Exchange Commission regulations to furnish us with copies of
all Section 16(a) reports they file. We are not aware of any director, executive
officer or beneficial owner of more than 10% of the outstanding common stock who
or which has not timely filed reports required by Section 16(a) of the Exchange
Act during or in respect of the fiscal year of our successor company ended
August 31, 2006.

ITEM 10. EXECUTIVE COMPENSATION

No executive officer of our company or our subsidiary received
annual salary and bonus in excess of $100,000 for our companys fiscal year
ended August 31, 2007 and from November 15, 2004 (Date of Inception) to August
31, 2005. As of the date of this annual report, we have no compensatory plan or
arrangement with respect to any officer that results or will result in the
payment of compensation in any form from the resignation, retirement or any
other termination of employment of such officers employment with our company,
from a change in control of our company or a change in such officers
responsibilities following a change in control.

30

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SUMMARY COMPENSATION TABLEName
      And Principal Position
    Year
    Annual Compensation
    Long-Term CompensationSalary ($)
    Bonus ensation Awards ($)
    (1) Other Annual Restricted
      Under-lying Compensation($)
    Awards
    Payouts
    All Other
      Compen- sation ($)Stock ($)
    Securities Options/
      SARs (#)
    LTIP
      Payouts ($)Richard Ritter v.Raffay Prof.
      Franke Greg McAdam
    2007 2007
      2007 2006 2005
    $20,060 $20,060
      $21,494 $29,331 $20,722
    Nil Nil Nil
      Nil Nil
    Nil Nil Nil
      Nil Nil
    Nil Nil Nil
      Nil Nil
    Nil Nil Nil
      Nil Nil
    Nil Nil Nil
      Nil Nil
    Nil Nil Nil
      Nil Nil


On January 26, 2007, Greg McAdam resigned as our President,
Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and a
director of our company.

Stock Option Grants

As of the date of this annual report on Form 10-KSB, we do not
have any outstanding options, warrants to purchase our common stock or
securities convertible into shares of our common stock.

Long-Term Incentive Plans

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers, except that
our directors and executive officers may receive stock options at the discretion
of our board of directors. We do not have any material bonus or profit sharing
plans pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.

Employment Contracts, Termination of Employment and Change
In Control Arrangements

We have not entered into any employment agreements with our
officers and directors.

Stock Option Plan

Our board of directors has not adopted a stock option plan.

Directors Compensation

Directors may be paid their expenses for attending each meeting
of the directors and may be paid a fixed sum for attendance at each meeting of
the directors or a stated salary as director. No payment precludes any director
from serving our company in any other capacity and being compensated for such
service. Members of special or standing committees may be allowed like
reimbursement and compensation for attending committee meetings.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of the directors or executive officers of our company or
any associate or affiliate of our company during the last two fiscal years, is
or has been indebted to our company by way of guarantee, support agreement,
letter of credit or other similar agreement or understanding currently
outstanding.

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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDERS

The following table sets forth, as of December 13, 2007,
certain information with respect to the beneficial ownership of our common stock
by each stockholder known by us to be the beneficial owner of more than 5% of
our common stock and by each director, nominee and named executive officer of
our company and our wholly-owned operating subsidiary, and by the directors and
executive officers of our company as a group. Each person has sole voting and
investment power with respect to the shares of common stock, except as otherwise
indicated. Beneficial ownership consists of a direct interest in the shares of
common stock, except as otherwise indicated.

Name and Address of Beneficial Owner
    Amount and Nature of Beneficial Ownership
    Percentage of Class (1) (2)Vladislav Iaroukov
      Director 817 Hillgrove Ct. Las Vegas, Nevada 89145
    27,900,000
    50%Directors and Officers (as a group)
    27,900,000
    50%


(1) Regulation S-B under the Exchange Act, defines a beneficial
owner of a security as any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or otherwise, has or shares:
(i) voting power, which includes the power to vote, or to direct the voting of
shares; and (ii) investment power, which includes the power to dispose or direct
the disposition of shares. Certain shares may be deemed to be beneficially owned
by more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire the shares
(for example, upon exercise of an option) within 60 days of the date as of which
the information is provided. In computing the percentage ownership of any
person, the amount of shares outstanding is deemed to include the amount of
shares beneficially owned by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in this table does not necessarily reflect the persons
actual ownership or voting power with respect to the number of shares of common
stock actually outstanding on November 20, 2006.

(2) Based upon 55,800,000 issued and outstanding shares of
common stock as of December 13, 2007.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Other than as disclosed below, during the last two years we
have not been a party to any transaction, proposed transaction, or series of
transactions in which the amount involved exceeded $60,000, and in which, to our
knowledge, any of the following persons had, or is to have, a direct or indirect
material interest: a director or executive officer of our company; a nominee for
election as a director of our company; a beneficial owner of more than five
percent of the outstanding shares of our common stock; or any member of the
immediate family of any such person.

The President and Chief Technology Officer of our company
provides management services to us. During the year ended August 31, 2007, we
incurred $40,120 (2006: $29,331) for executive compensation.

The amounts due to related parties are due to directors and
former directors of our company and represent cash advances and unpaid
compensation. These amounts are unsecured, non-interest bearing and have no
specific terms of repayment.

ITEM 13. EXHIBITS

Exhibits required by Item 601 of Regulation
S-B

(3) Articles of Incorporation and By-laws

3.1 Articles of Incorporation (incorporated by reference from
our Registration Statement on Form SB-2, filed on February 21, 2006).

32

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3.2 Bylaws, as amended (incorporated by reference from our
Registration Statement on Form SB-2, filed on February 21, 2006).

3.3 Articles of Merger filed with the Secretary of State of
Nevada on November 1, 2006, effective November 6, 2006 (incorporated by
reference from our current report on Form 8-K filed on November 6, 2006).

3.4 Certificate of Change filed with the Secretary of State of
Nevada on November 2, 2006 and which is effective November 6, 2006 (incorporated
by reference from our current report on Form 8-K filed on November 6, 2006).

(4) Instruments defining rights of security holders,
including indentures

4.1 Form of Share Certificate (incorporated by reference from
our Registration Statement on Form SB-2, filed on February 21, 2006).

(10) Material Contracts

10.1 Share Purchase Agreement between Freshly Pressed
Enterprises Inc. and Eagle Ridge Ventures Inc. dated February 4, 2005
(incorporated by reference from our Registration Statement on Form SB-2, filed
on February 21, 2006).

10.2 Management Services Agreement between Freshly Pressed
Enterprises and Greg McAdam dated September 1, 2005 (incorporated by reference
from our Registration Statement on Form SB-2, filed on February 21, 2006).

(21) Subsidiaries

21.1* List of Subsidiaries

(31) Section 302 Certification

31.1* Certification of Chief Executive Officer as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(32) Section 906 Certification

32.1* Certification of Chief Executive Officer as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES AUDIT
FEES

Audit Fees

The aggregate fees billed for the fiscal year ended August 31,
2006 and August 31, 2006 for professional services rendered by the principal
accountant for the audit of our annual financial statements and review of the
financial statements included in our Form 10-KSB or services that are normally
provided by the accountant in connection with statutory and regulatory filings
or engagements for these fiscal periods were $34,000 and $16,396 respectively.
In addition, fees billed for audit related fees for the respective periods were
$17,133 and $Nil, and all other fees for the respective periods were $4,219 and
$Nil.

33

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, we have duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

ALGODYNE ETHANOL ENERGY CORP.

|By:   Richard Ritter v. Raffay                                                                   
|-------------------------------------------------------------------------------------------------
|Richard Ritter v. Raffay                                                                         
|President, Chief
      Executive Officer, Chief Financial Officer, Secretary,                    
|Treasurer and Director                                                                           
|(Principal Executive
      Officer, Principal Financial Officer and Principal Accounting Officer)

Date: December 13, 2007

34

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