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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934
  For the quarterly period ended September 30, 2006

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
  THE EXCHANGE ACT 
  For the transition period from _______________ to _______________

Commission file number 000-28305

SYNGAS INTERNATIONAL CORP.(Exact name of small business issuer as specified in its charter)

|Nevada                                           | 91-1880015                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|Suite 600, 595 Hornby Street                     |                                     
|Vancouver, British Columbia, Canada              | V6C 1A4                             
|(Address of principal executive offices)         | (Zip Code)                          

604.646.5611(Issuer's telephone
number)

______________________________________________________(Former
name, former address and former fiscal year, if changed since last report)

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
  DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has filed all documents and reports
  required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange
  Act of 1934 subsequent to the distribution of securities under a plan confirmed
  by a court. [   ] Yes [   ] No

APPLICABLE ONLY TO CORPORATE ISSUERS

As of November 13, 2006, the registrants outstanding common
stock consisted of 39,850,364shares.

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Part I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Our financial statements are stated in United States Dollars
and are prepared in accordance with United States Generally Accepted Accounting
Principles. All dollar amounts in this report refer to US dollars unless
otherwise indicated.

As used in this report, the terms "we", "us", "our", and
"Syngas" and the Company mean Syngas International Corp., unless otherwise
indicated.

Syngas International Corp.(A Development Stage
Company) (Unaudited)

September 30, 2006

|                                                     | Index
|---------------------------------------------------- | -----
|                                                     |      
|Consolidated
      Balance Sheet                     | F-1  
|                                                     |      
|Consolidated
      Statement of Operations           | F-2  
|                                                     |      
|Consolidated
      Statement of Cash Flows           | F-3  
|                                                     |      
|Notes
      to the Consolidated Financial Statements | F-4  

1

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SYNGAS INTERNATIONAL CORP.(A Development Stage
Company) Consolidated Balance Sheets (Expressed in US dollars)
(Unaudited)

|                                                                        |  | September 30, |   |  | December 31, |  
|----------------------------------------------------------------------- |  | ------------- | - |  | ------------ | -
|                                                                        |  | 2006          |   |  | 2005         |  
|                                                                        |  | $             |   |  | $            |  
|Assets                                                                  |  |               |   |  |              |  
|Current Assets                                                          |  |               |   |  |              |  
|Cash and cash equivalents                                               |  | 13,720        |   |  | 2,810        |  
|Prepaid expenses and deposits                                           |  | 8,654         |   |  | 8,654        |  
|Total Current Assets                                                    |  | 22,374        |   |  | 11,464       |  
|Advances receivable (Note 10 (b))                                       |  | 182,388       |   |  |             |  
|Intangible Asset
      (Note 5)                                         |  | 25,204        |   |  | 25,204       |  
|Total Assets                                                            |  | 229,966       |   |  | 36,668       |  
|                                                                        |  |               |   |  |              |  
|Liabilities and Stockholders' Deficit                                   |  |               |   |  |              |  
|Current Liabilities                                                     |  |               |   |  |              |  
|Accounts payable and accrued
      liabilities                          |  | 28,859        |   |  | 45,645       |  
|Accounts payable - related parties (Note
      6)                       |  | 31,444        |   |  | 30,175       |  
|Loans payable (Note 7)                                                  |  | 238,644       |   |  | 79,972       |  
|Total Liabilities                                                       |  | 298,947       |   |  | 155,792      |  
|Stockholders' Deficit                                                   |  |               |   |  |              |  
|Preferred Stock                                                         |  |               |   |  |              |  
|Authorized: 1,000,000 shares,
      with a $0.01 par value; none issued |  |              |   |  |             |  
|Common Stock (Note 8)                                                   |  |               |   |  |              |  
|Authorized: 100,000,000
      shares, with a $0.001 par value;          |  |               |   |  |              |  
|Issued: 39,478,364 shares (2005  37,755,050
      shares)              |  | 39,478        |   |  | 37,755       |  
|Additional Paid-in Capital                                              |  | 2,380,239     |   |  | 1,026,477    |  
|Accumulated Other Comprehensive Loss                                    |  | (2,369        | ) |  | (1,019       | )
|Deficit Accumulated During the Development Stage                        |  | (2,486,329    | ) |  | (1,182,337   | )
|Total
      Stockholders Deficit                                       |  | (68,981       | ) |  | (119,124     | )
|Total Liabilities and Stockholders Deficit                             |  | 229,966       |   |  | 36,668       |  

The accompanying notes are an integral part of these
consolidated financial statements. F-1

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SYNGAS INTERNATIONAL CORP.(A Development Stage
Company) Consolidated Statements of Operations (Expressed in US dollars)
(Unaudited)

Accumulated fromDecember 14, 2004
      
    
      For the Three
      
    
      For the Three
      
    
      For the Nine
      
    
      For the Nine(Date of Inception) to
      
    
      Months Ended
      
    
      Months Ended
      
    
      Months Ended
      
    
      Months EndedSeptember 30,
      
    
      September 30,
      
    
      September 30,
      
    
      September 30,
      
    
      September 30,2006
      
    
      2006
      
    
      2005
      
    
      2006
      
    
      2005$
      
    
      $
      
    
      $
      
    
      $
      
    
      $Revenue
    
    
      
    
      
      
    
      
      
    
      
      
    
      ExpensesConsulting and management fees
    
    2,207,600
      
    
      24,085
      
    
      349,730
      
    
      1,180,736
      
    
      380,117General and
      administrative
    
    104,304
      
    
      70,211
      
    
      4,165
      
    
      82,331
      
    
      10,859Professional fees
    
    103,314
      
    
      14,313
      
    
      29,509
      
    
      46,752
      
    
      35,0542,415,218
      
    
      108,609
      
    
      383,404
      
    
      1,309,819
      
    
      426,030Loss before the following:
    
    (2,415,218
      )
    
      (108,609
      )
    
      (383,404
      )
    
      (1,309,819
      )
    
      (426,030
      )Gain on write-off of debt
    
    5,827
      
    
      5,827
      
    
      
      
    
      5,827
      
    
      Net loss
    
    (2,409,391
      )
    
      (102,782
      )
    
      (383,404
      )
    
      (1,303,992
      )
    
      (426,030
      )Other comprehensive lossForeign currency translation adjustment
    
    (2,369
      )
    
      (156
      )
    
      (1,002
      )
    
      (1,350
      )
    
      (1,083
      )Total Comprehensive Loss
    
    (2,411,760
      )
    
      (102,938
      )
    
      (384,406
      )
    
      (1,305,342
      )
    
      (427,113
      )Net
      Loss Per Share  Basic and Diluted
    
    
      
    
      (0.00
      )
    
      (0.01
      )
    
      (0.03
      )
    
      (0.01
      )Weighted Average Shares Outstanding
    
    
      
    
      39,301,000
      
    
      36,590,000
      
    
      38,839,000
      
    
      32,248,000


The accompanying notes are an integral part of these
consolidated financial statements. F-2

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SYNGAS INTERNATIONAL CORP.(A Development Stage
Company) Consolidated Statements of Cash Flows (Expressed in US dollars)
(Unaudited)

|                                                            |  | Accumulated from       |   |  | For the Nine  |   |  | For the Nine  |  
|----------------------------------------------------------- |  | ---------------------- | - |  | ------------- | - |  | ------------- | -
|                                                            |  | December 14, 2004      |   |  | Months Ended  |   |  | Months Ended  |  
|                                                            |  | (date of Inception) to |   |  | September 30, |   |  | September 30, |  
|                                                            |  | September 30, 2006     |   |  | 2006          |   |  | 2005          |  
|                                                            |  | $                      |   |  | $             |   |  | $             |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Cash Flows Used In Operating
      Activities               |  |                        |   |  |               |   |  |               |  
|Net loss                                                    |  | (2,409,391             | ) |  | (1,303,992    | ) |  | (426,030      | )
|                                                            |  |                        |   |  |               |   |  |               |  
|Adjustments to reconcile net
      loss to net cash used in |  |                        |   |  |               |   |  |               |  
|operating activities:                                       |  |                        |   |  |               |   |  |               |  
|Stock based
      compensation                              |  | 994,563                |   |  | 654,801       |   |  | 339,762       |  
|Shares issued for expenses                                  |  | 1,109,284              |   |  | 499,284       |   |  |              |  
|Gain on write-off
      of debt                             |  | (5,827                 | ) |  | (5,827        | ) |  |              |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Changes in operating assets and
      liabilities:          |  |                        |   |  |               |   |  |               |  
|Deposits                                                    |  |                       |   |  |              |   |  | (25,000       | )
|Accounts payable
      and accrued liabilities              |  | 12,575                 |   |  | (10,959       | ) |  | 26,858        |  
|Loans payable                                               |  |                       |   |  |              |   |  | 5,204         |  
|Accounts payable - related
      parties                    |  | 28,568                 |   |  | 1,269         |   |  | 11,009        |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Net
      Cash Used in Operating Activities                 |  | (270,228               | ) |  | (165,424      | ) |  | (68,197       | )
|                                                            |  |                        |   |  |               |   |  |               |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Investing Activities                                        |  |                        |   |  |               |   |  |               |  
|Net cash acquired
      on business acquisition             |  | 565                    |   |  |              |   |  | 565           |  
|Purchase of intangible asset                                |  | (25,000                | ) |  |              |   |  |              |  
|Advances receivable                                         |  | (182,388               | ) |  | (182,388      | ) |  |              |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Net
      Cash Used In Investing Activities                 |  | (206,823               | ) |  | (182,388      | ) |  | 565           |  
|                                                            |  |                        |   |  |               |   |  |               |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Financing Activities                                        |  |                        |   |  |               |   |  |               |  
|Advances from
      related parties                         |  | 193,996                |   |  | 158,672       |   |  |              |  
|Proceeds from issuance of common
      stock                |  | 299,144                |   |  | 201,400       |   |  | 98,287        |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Net Cash Provided By Financing Activities                   |  | 493,140                |   |  | 360,072       |   |  | 98,287        |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Effect of Exchange Rate Changes on Cash                     |  | (2,369                 | ) |  | (1,350        | ) |  | (703          | )
|                                                            |  |                        |   |  |               |   |  |               |  
|Increase in Cash and Cash
      Equivalents                 |  | 13,720                 |   |  | 10,910        |   |  | 29,952        |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Cash and Cash Equivalents, beginning of period              |  |                       |   |  | 2,810         |   |  | 384           |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Cash and Cash Equivalents, end of period                    |  | 13,720                 |   |  | 13,720        |   |  | 30,336        |  
|                                                            |  |                        |   |  |               |   |  |               |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Supplemental Disclosures                                    |  |                        |   |  |               |   |  |               |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Cash paid for taxes                                         |  |                       |   |  |              |   |  |              |  
|Cash paid for interest                                      |  |                       |   |  |              |   |  |              |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Non-Cash Financing and
      Investing Activities           |  |                        |   |  |               |   |  |               |  
|                                                            |  |                        |   |  |               |   |  |               |  
|Common stock issued for intangible asset                    |  | 204                    |   |  |              |   |  | 204           |  

The accompanying notes are an integral part of these
consolidated financial statements. F-3

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SYNGAS INTERNATIONAL CORP.(A Development Stage
Company) Notes to the Consolidated Financial Statements (Expressed in US
dollars) (Unaudited)

|1. | Nature of Operations and Going Concern
    Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On January 28, 2005, Syngas International Corp. (Syngas
      International) entered into two Share Exchange Agreements to acquire all
      of the shares of Syngas Energy Corp. (Syngas Energy). Syngas Energy was
      incorporated in the Province of British Columbia, Canada, on December 14,
      2004, and its principal business involves an integrated gasification
      production system technology that combines modern gasification with
      turbine technologies to produce synthetic gas, hydrogen or electricity.
      Syngas International intends to further develop the technology to make it
      commercially viable and intends to then sell or license the technology.
      Syngas Energy is in the development stage as defined under Statement of
      Financial Accounting Standards (SFAS) No. 7 Accounting and Reporting
      by Development Stage Enterprises.Effective June 30, 2005, the
      acquisition of Syngas Energy by Syngas International was completed through
      the issuance of one share of Syngas International common stock for each
      share of Syngas Energy outstanding. Syngas International issued 30,047,500
      shares of common stock to the shareholders of Syngas Energy, and as a
      result, the former Syngas Energy shareholders own approximately 82% of the
      outstanding common stock of Syngas International.   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The acquisition of Syngas Energy by Syngas International
      is considered a reverse acquisition and accounted for under the purchase
      method of accounting. Under reverse acquisition accounting, Syngas Energy
      is considered the acquirer for accounting and financial reporting
      purposes, and acquired the assets and assumed the liabilities of Syngas
      International. Assets acquired and liabilities assumed are reported at
      their historical amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These consolidated financial statements include the
      accounts of Syngas International since the effective date of the reverse
      acquisition (June 30, 2005) and the historical accounts of its
      wholly-owned subsidiary, Syngas Energy, since inception (collectively, the
      Company). All significant intercompany balances and transactions have
      been eliminated on consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | As of September 30, 2006, the Company had not reached a
      level of operations which would finance day-to-day activities. These
      financial statements have been prepared on the assumption that the Company
      is a going concern, meaning it will continue in operation for the
      foreseeable future and will be able to realize assets and discharge
      liabilities in the ordinary course of operations. Different bases of
      measurement may be appropriate when a company is not expected to continue
      operations for the foreseeable future. The Companys continuation as a
      going concern is dependent upon its ability to attain profitable
      operations and generate funds therefrom and/or raise equity capital or
      borrowings sufficient to meet current and future obligations. Management
      plans to raise equity financings of approximately $1,000,000 over the next
      twelve months to finance operations. There is no guarantee that the
      Company will be able to complete any of these objectives. The Company
      incurred losses from operations of $2,486,329 since inception and has a
      working capital deficiency of $276,573 and these conditions, among others,
      give rise to substantial doubt about the Companys ability to continue as
      a going concern.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|2. | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The unaudited financial information furnished herein
      reflects all adjustments, which in the opinion of management are necessary
      to fairly state the Companys financial position and the results of its
      operations for the periods presented. This report on Form 10-Q should be
      read in conjunction with the Companys financial statements and notes
      thereto included in the Companys Form 10-K for the fiscal year ended
      December 31, 2005. The Company assumes that the users of the interim
      financial information herein have read or have access to the audited
      financial statements for the preceding fiscal year and that the adequacy
      of additional disclosure needed for a fair presentation may be determined
      in that context. Accordingly, footnote disclosure, which would
      substantially duplicate the disclosure contained in the Companys Form
      10-K for the fiscal year ended December 31, 2005, has been omitted. The
      results of operations for the nine-month period ended September 30, 2006
      are not necessarily indicative of results for the entire year ending
      December 31, 2006. The accounting principles applied in the preparation of
      these interim financial statements are consistent with those applied for
      the year ended December 31, 2005, except as described in Note
  3.

F-4

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**SYNGAS INTERNATIONAL CORP.**(A Development
Stage Company) Notes to the Consolidated Financial Statements (Expressed
in US dollars) (Unaudited)

|3. | Adoption of New Accounting Policy                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Stock  Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company has a stock-based compensation plan (Note 8),
      whereby stock options are granted in accordance with the policies of
      regulatory authorities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Prior to January 1, 2006, the Company accounted for
      stock-based awards under the recognition and measurement provisions of
      Accounting Principles Board Opinion (APB) No. 25, Accounting for
      Stock Issued to Employees using the intrinsic value method of
      accounting, under which compensation expense was only recognized if the
      exercise price of the Companys employee stock options was less than the
      market price of the underlying common stock on the date of grant.
      Effective January 1, 2006, the Company adopted the fair value recognition
      provisions of SFAS No. 123R Share Based Payments, using the
      modified prospective transition method. Under that transition method,
      compensation cost is recognized for all share-based payments granted prior
      to, but not yet vested as of January 1, 2006, based on the grant date fair
      value estimated in accordance with the original provisions of SFAS No.
      123, and compensation cost for all share-based payments granted subsequent
      to January 1, 2006, based on the grant-date fair value estimated in
      accordance with the provisions of SFAS 123R. Results for prior periods
      have not been restated. There was no change to the Company income from
      operations for the period ended September 30, 2006, than if it had
      continued to account for share-based compensation under APB No.
  25.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | All transactions in which goods or services are the
      consideration received for the issuance of equity instruments are
      accounted for based on the fair value of the consideration received or the
      fair value of the equity instrument issued, whichever is more reliably
      measurable. Equity instruments issued to employees and the cost of the
      services received as consideration are measured and recognized based on
      the fair value of the equity instruments issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The following table illustrates the effect on net loss
      per share as if the fair value method had been applied to all outstanding
      and vested awards in the prior period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                                                                                        |  | Nine Months   |  
| | -------------------------------------------------------------------------------------- |  | ------------- | -
| |                                                                                        |  | Ended         |  
| |                                                                                        |  | September 30, |  
| |                                                                                        |  | 2005          |  
| |                                                                                        |  | $             |  
| |                                                                                        |  |               |  
| | Net loss, as reported                                                                  |  | (426,030      | )
| |                                                                                        |  |               |  
| | Add: Stock-based compensation expense
      included in reported net income, net of    |  |               |  
| | related tax effects                                                                    |  | 339,762       |  
| |                                                                                        |  |               |  
| | Deduct: Total stock-based compensation expense determined
      under fair value based |  |               |  
| | method for all awards, net of related tax effects                                      |  | (339,762      | )
| |                                                                                        |  |               |  
| | Pro forma net loss                                                                     |  | (426,030      | )
| |                                                                                        |  |               |  
| |                                                                                        |  |               |  
| | Loss per share:                                                                        |  |               |  
| |                                                                                        |  |               |  
| | Basic and Diluted - as reported                                                        |  | (0.01         | )
| | Basic and Diluted - pro forma                                                          |  | (0.01         | )

|4. | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In February 2006, the FASB issued SFAS No. 155,
      "Accounting for Certain Hybrid Financial Instruments-an amendment of
      FASB Statements No. 133 and 140", to simplify and make more consistent
      the accounting for certain financial instruments. SFAS No. 155 amends SFAS
      No. 133, "Accounting for Derivative Instruments and Hedging
      Activities", to permit fair value re-measurement for any hybrid
      financial instrument with an embedded derivative that otherwise would
      require bifurcation, provided that the whole instrument is accounted for
      on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting
      for the Impairment or Disposal of Long-Lived Assets", to allow a
      qualifying special-purpose entity to hold a derivative financial
      instrument that pertains to a beneficial interest other than another
      derivative financial instrument. SFAS No. 155 applies to all financial
      instruments acquired or issued after the beginning of an entity's first
      fiscal year that begins after September 15, 2006, with earlier application
      allowed. The adoption of this statement is not expected to have a material
      effect on the Company's future reported financial position or results of
      operations.

F-5

---

**SYNGAS INTERNATIONAL CORP.**(A Development
Stage Company) Notes to the Consolidated Financial Statements (Expressed
in US dollars) (Unaudited)

|4. | Recent Accounting Pronouncements
  (continued)
|-- | ----------------------------------------------

|   | In March 2006, the FASB issued SFAS No. 156,
      "Accounting for Servicing of Financial Assets, an amendment of FASB
      Statement No. 140, Accounting for Transfers and Servicing of Financial
      Assets and Extinguishments of Liabilities". This statement requires
      all separately recognized servicing assets and servicing liabilities be
      initially measured at fair value, if practicable, and permits for
      subsequent measurement using either fair value measurement with changes in
      fair value reflected in earnings or the amortization and impairment
      requirements of Statement No. 140. The subsequent measurement of
      separately recognized servicing assets and servicing liabilities at fair
      value eliminates the necessity for entities that manage the risks inherent
      in servicing assets and servicing liabilities with derivatives to qualify
      for hedge accounting treatment and eliminates the characterization of
      declines in fair value as impairments or direct write-downs. SFAS No. 156
      is effective for an entity's first fiscal year beginning after September
      15, 2006. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or
      results of operations.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In September 2006, the FASB issued SFAS No. 157, Fair
      Value Measurements. The objective of SFAS 157 is to increase
      consistency and comparability in fair value measurements and to expand
      disclosures about fair value measurements. SFAS 157 defines fair value,
      establishes a framework for measuring fair value in generally accepted
      accounting principles, and expands disclosures about fair value
      measurements. SFAS 157 applies under other accounting pronouncements that
      require or permit fair value measurements and does not require any new
      fair value measurements. The provisions of SFAS No. 157 are effective for
      fair value measurements made in fiscal years beginning after November 15,
      2007. The adoption of this statement is not expected to have a material
      effect on the Company's future reported financial position or results of
      operations.                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In September 2006, the FASB issued SFAS No. 158,
      Employers Accounting for Defined Benefit Pension and Other
      Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106,
      and 132(R). This statement requires employers to recognize the
      over-funded or under-funded status of a defined benefit postretirement
      plan (other than a multiemployer plan) as an asset or liability in its
      statement of financial position and to recognize changes in that funded
      status in the year in which the changes occur through comprehensive income
      of a business entity or changes in unrestricted net assets of a not-
      for-profit organization. This statement also requires an employer to
      measure the funded status of a plan as of the date of its year-end
      statement of financial position, with limited exceptions. The provisions
      of SFAS No. 158 are effective for employers with publicly traded equity
      securities as of the end of the fiscal year ending after December 15,
      2006. The adoption of this statement is not expected to have a material
      effect on the Company's future reported financial position or results of
      operations.                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | Intangible Asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On December 24, 2004, the Company purchased from the CEO
      of the Company an integrated gasification production system. This
      technology combines modern gasification with gas turbine technologies to
      produce synthetic gas, hydrogen or electricity. The Company intends to
      further develop the technology to make it commercially viable and intends
      to then sell or license the technology. The Company purchased the asset by
      issuing 10,000,000 common shares of the Company and a $25,000 payment. If
      by January 2006 the Company had not raised a minimum of $1,000,000 by way
      of equity private placements, it has the option, until June 30, 2007, of
      cancelling the 10,000,000 shares issued to 975110 Alberta Ltd. and subject
      to escrow, in consideration for the transfer to 975110 Alberta Ltd. of
      100% of the interest in all of the enhanced gasification intellectual
      property and a small gasification unit.                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As at September 30, 2006, $2,920 (December 31, 2005 
      $2,919), is owing to a director and officer of the Company, $9,877
      (December 31, 2005  $9,438), is owing to related companies, and $18,647
      (December 31, 2005 - $17,818), is owing to a company with a common
      director. These amounts are unsecured, non-interest bearing and have no
      terms of repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|7. | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As at September 30, 2006, $238,644 (December 31, 2005 -
      $79,972), is owing to companies with common directors. These amounts are
      unsecured, non-interest bearing and are due on
demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-6

---

**SYNGAS INTERNATIONAL CORP.**(A Development
Stage Company) Notes to the Consolidated Financial Statements (Expressed
in US dollars) (Unaudited)

|8. | Common Stock
|-- | ------------
|   |             
|   | a)          
|   |             
|   | b)          
|   |             
|   | c)          
|   |             
|   | d)          
|   |             
|   | e)          
|   |             
|   | f)          
|   |             
|   | g)          
|   |             
|   | h)          
|   |             
|   | i)          
|   |             
|   | j)          
|   |             
|   | k)          
|   |             
|   | l)          
|   |             
|   | m)          
|   |             
|   | n)          
|   |             
|   | o)          

F-7

---

**SYNGAS INTERNATIONAL CORP.**(A Development
Stage Company) Notes to the Consolidated Financial Statements (Expressed
in US dollars) (Unaudited)

|9. | Stock Options                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                               
|   | On February 25, 2005, the Company adopted a Stock Option
      Plan (the 2005 Stock Option Plan) under which the Company is authorized
      to grant options to acquire up to a total of 4,000,000 common shares. The
      term of any stock options granted under the plan is limited to ten
      years.                                
|   |                                                                                                                                                                                                                                                                                                                                               
|   | On July 19, 2005, the Company adopted the 2005
      Non-Qualified Stock Compensation Plan (the 2005 Non- Qualified Plan)
      under which the Company is authorized to issue up to 1,000,000 shares of
      common stock. On September 26, 2005, these shares were registered on a
      Form S - 8 registration.                        
|   |                                                                                                                                                                                                                                                                                                                                               
|   | On September 16, 2005, the Company adopted the September
      2005 Non-Qualified Stock Compensation Plan (the September 2005
      Non-Qualified Plan) under which the Company is authorized to issue up to
      2,000,000 shares of common stock. On September 26, 2005, these shares were
      registered on a Form S - 8 registration.
|   |                                                                                                                                                                                                                                                                                                                                               
|   | A summary of the Companys stock option activity is as
      follows:                                                                                                                                                                                                                                                                         

| |                              |  | Nine months ended  |  
| | ---------------------------- |  | ------------------ | -
| |                              |  | September 30, 2006 |  
| |                              |  |                    |  
| |                              |  | Number of          |  
| |                              |  | Options            |  
| | Balance  January 1, 2006    |  | 1,205,000          |  
| | Granted                      |  | 1,450,000          |  
| | Cancelled / Forfeited        |  |                   |  
| | Exercised                    |  | (575,333           | )
| | Balance  September 30, 2006 |  | 2,079,667          |  

|10. | Commitments
|--- | -----------
|    |            
|    | a)         
|    |            
|    | b)         

|11. | Subsequent events
|--- | -----------------
|    |                  
|    | a)               
|    |                  
|    | b)               

F-8

---

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION / PLAN OF OPERATIONS

Forward Looking Statements

This report on Form 10-QSB contains certain forward-looking
statements. All statements other than statements of historical fact are
forward-looking statements for purposes of these provisions, including any
projections of earnings, revenues, or other financial items; any statements of
the plans, strategies, and objectives of management for future operation; any
statements concerning proposed new products, services, or developments; any
statements regarding future economic conditions or performance; statements of
belief; and any statement of assumptions underlying any of the foregoing. Such
forward-looking statements are subject to inherent risks and uncertainties, and
actual results could differ materially from those anticipated by the
forward-looking statements.

Overview

Syngas was incorporated as a Nevada company on December 14, 2004.
  On December 29, 2005 we changed our name from Fairchild International Corporation
  to Syngas International Corp. We are a development stage company. We have only
  recently begun our current operations. As of September 30, 2006, we have not
  yet earned any revenues, have had operational losses to date and have an accumulated
  deficit. As of September 30, 2006, we had net losses since inception in the
  amount of $2,409,391.

We have one wholly-owned subsidiary, Syngas Energy Corp. (Syngas
  Energy), incorporated as a British Columbia company on December 14, 2004
  and its principal business involves an integrated gasification production system
  technology that combines modern gasification with turbine technologies to produce
  synthetic gas, hydrogen or electricity. On June 30, 2005, we completed the acquisition
  of Syngas Energy by issuing one common share to each share of Syngas Energy
  outstanding. We issued 30,047,500 shares of our common stock to the shareholders
  of Syngas Energy and as a result the former Syngas Energy shareholders became
  owners of approximately 82% of our outstanding common stock. Our acquisition
  of Syngas Energy was considered a reverse acquisition and Syngas Energy was
  considered the acquirer for accounting and financial reporting purposes. Accordingly
  our consolidated financial statements include our accounts since the effective
  date of the reverse acquisition (June 30, 2005), and the historical accounts
  of Syngas Energy since its inception December 14, 2004.

Our continuation as a going concern is dependent upon our
ability to attain profitable operations and generate revenues or raise equity
capital or borrowings sufficient to meet current and future obligations. Our
management plans to raise equity financings of approximately $1,272,000 over the
next twelve months to finance operations. There is no guarantee that we will be
able to complete any of these objectives.

2

---

Results of Operations for Three Months Ended September 30,
2006 and Nine Months Ended September 30, 2006 and for the Period from December
14, 2004 (Date of Inception) to September 30, 2006

We incurred a net loss of $2,409,391 since December 14, 2004
(date of inception) to June 30, 2006. As of September 30, 2006 we had a working
capital deficiency of $276,573 and these financial conditions give rise to
substantial doubt about our ability to continue as a going concern.

For the three months ended September 30, 2006, we incurred a
net loss of $102,782, compared to $383,404 for the same period in 2005. For the
nine months ended September 30, 2006 we incurred a net loss of $1,303,992,
compared to a net loss of $426,030 for the three months ended September 30,
2005. For the three months ended September 30, 2006, our net loss per share was
$0, compared to $0.01 for the same period in 2005. For the nine months ended
September 30, 2006, our net loss per share was $0.03, compared to $0.01 for the
same period in 2005.

Lack of Revenues

Since December 14, 2004 (date of inception) to September 30,
2006, we have not yet generated any revenues. At this time, our ability to
generate any significant revenues continues to be uncertain. The auditor's
report on our December 31, 2005 financial statements contains an additional
explanatory paragraph which identifies issues that raise substantial doubt about
our ability to continue as a going concern. Our financial statements do not
include any adjustment that might result from the outcome of this uncertainty.

Expenses

Total expenses for the quarterly period ended September 30,
2006 were $108,609, compared to total expenses of $383,404 for the quarterly
period ended September 30, 2005. Total expenses for the nine months ended
September 30, 2006 were $1,309,819, compared to total expenses of $426,030 for
the nine months ended September 30, 2005. Our total expenses from December 14,
2004 (date of inception) to September 30, 2006 were $2,415,218 and consisted of
$2,207,600 in consulting and management fees, $104,304 in general and
administrative fees, and $103,314 in professional fees.

Our general and administrative expenses had an increase of
$66,046 from $70,211 for the three months ended September 30, 2006 to $4,165 for
the same period in 2005. Our general and administrative expenses had an increase
of $71,472 from $82,331 for the nine months ended September 30, 2006 to $10,859
for the same period in 2005. Our administrative expenses consist of office
supplies, travel expenses, rent, communication expenses (cellular, internet,
fax, telephone), office maintenance, courier and postage costs and office
equipment.

Our professional fees of $14,313 for the three months ended
September 30, 2006 consisted primarily of legal, accounting and auditing fees.
For the same period in 2005, our professional fees were $29,509. Our
professional fees were $46,752 for the nine months ended September 30, 2006,
compared to $35,054 for the same period in 2005.

3

---

Our consulting and management fees of $24,085 for the three
months ended September 30, 2006 consisted mainly of amounts paid to our CEO and
CFO and fees paid to our other officers. For the same period in 2005, our
consulting and management fees were $349,730. Our consulting and management fees
had an increase of $800,619 from $1,180,736 for the nine months ended September
30, 2006 to $380,117 for the same period in 2005. The increase of consulting and
management fees was related mainly to the development of our marketing
strategies and related to assisting us in locating and acquiring new
technologies.

Limited Operating History; Need for Additional
Capital

There is limited historical financial information about us upon
which to base an evaluation of our performance. We are a development stage
company and have generated no revenues. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources and possible cost overruns due to price and cost increases in services
and products.

To become profitable and competitive, we have to license our
technologies. We are seeking equity financing to provide for the capital
required to fully carry out our business plan and develop and market our
technology.

We have no assurance that future financing will be available to
us on acceptable terms. Obtaining additional financing will be subject to a
number of factors including market conditions, investor acceptance of our
business plan and investor sentiment. These factors may make the timing, amount,
terms and conditions of additional financing unattractive or unavailable to us.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations. If we are unable to raise additional
financing, we will have to significantly reduce our spending, delay or cancel
planned activities or substantially change our current corporate structure. In
such an event, we intend to implement expense reduction plans in a timely
manner. However, these actions would have material adverse effects on our
business, revenues, operating results, and prospects, resulting in a possible
failure of our business. If we raise funds through equity or convertible
securities, our existing stockholders may experience dilution and our stock
price may decline.

We have incurred operating losses from our inception and we are
dependent upon our ability to raise capital from stockholders or other sources
to sustain operations. These factors raise substantial doubt about our ability
to continue as a going concern.

Plan of Operation

We intend to maintain our current model of commercializing our
proprietary processes to produce energy using environmentally friendly methods.
We also intend to expand our product offerings in terms of the type of energy
produced and the methodologies used to produce these energies.

4

---

Gasification Technology

In Fiscal 2005 we acquired Syngas Energy along with all rights
and title to its advanced gasification process. Subsequently, we completed a
prototype of the gasification technology. During the next 12 months we plan to
commercialize our advanced gasification unit. We plan to joint venture with
clients seeking co-generation power sources, or with those that have low value
feed stocks to convert to energy and take a percentage of the proceeds from
energy sales.

PyStR Process  Hydrogen Production

In 2005, through our wholly owned subsidiary Syngas Energy, we
acquired world wide exclusive licenses to develop, produce and market PyStR, a
low cost proprietary hydrogen production technology. We plan to complete a
prototype and commercialize the PyStR hydrogen production process during
2006.

We have agreed to begin construction on a demonstration sized
installation of the PyStR technology no later than February 14, 2008. Also, we
are obligated to sell at least one commercial installation using the PyStR
technology by the end of 2008. If we fail to carry out either of these
obligations, all rights and interests in the hydrogen technology will revert
back to the creator of the technology at the end of 2008.

Our plan of operation for the next 12 month period is to
continue implementing our business strategy, including the continued
improvements of our hydrogen gas generator and the commercializing of recently
acquired PyStR low cost hydrogen process. We also intend to expand our
technology base by seeking complementary technologies to our PyStR and other
hydrogen gas generating processes through purchasing or licensing arrangements.
We intend to maintain our current model of commercializing its proprietary
process to produce energy using environmentally friendly methods. We also intend
to expand our product offerings in terms of the type of energy produced and the
methodologies used to produce these energies.

Beiseker Medical Waste Facility

In 2005 we commenced negotiations to enter into a formal
agreement with the Beiseker Medical Waste Facility. If we are successful in
reaching an agreement, this facility will act as a co-generation plant to start,
with further expansion capacity to sell energy (electricity) directly to the
grid. Negotiations are ongoing. In January, 2006, we entered into a non-binding
letter of intent with Beiseker Envirotech, owned by Globetech Environmental Inc.
to enter into a joint venture. Medical waste products, if misused, mishandled or
not disposed of properly, could cause significant harm. Gasification not only
ensures that expired medical waste and used equipment will not cause harm, but
can do it in a way that produces energy, cuts costs and saves the environment
from needless land filling. We hope to enter into a joint venture with Beiseker
Envirotech to use our technologies to covert medical waste to energy. The
Agreement with Globetech Environmental Inc. was subsequently frustrated due to
the previous owner, Cristallo Holdings Inc., taking over the facility.
Negotiations are now ongoing with Cristallo Holdings Inc.

Management also anticipates searching out and securing other
uses for PyStR and the advanced gasification offerings across different
industries and geographic locations.

5

---

Salmon Arm Plastics Limited.

In June of 2006, we commenced negotiations to enter into a
formal agreement with the Salmon Arm Plastics Ltd. (SAPL). We entered into a
non-binding letter of intent which sets out the possible key terms of an
acquisition by us of SAPL and we have been negotiating with SAPL in an attempt
to reach a definitive agreement since then. If we are successful in reaching an
agreement, SAPL's facility will act as a co-generation plant to start, with
further expansion capacity to sell energy (electricity) directly to electricity
suppliers. SAPL is located in Salmon Arm, British Columbia, Canada, where there
is an active forestry industry. SAPL has extra space in its operating facility
in Salmon Arm. We want to use it as a showcase for our PyStR technology. SAPL
currently takes flake made from used pop, water and liquor bottles, and
produces plastic sheeting which is then turned into clam shells used in most
popular grocery stores. We would like to take the wood waste from the forestry
industry and use our PystR technology plant to convert it into electricity to
power the SAPL factory and to sell back to electricity suppliers. Our management
anticipates that if we are able to install a PystR plant in the SAPL facility,
we will diminish SAPL's electricity costs, therefore lowering its operating
expenses. The agreement as contemplated would have SAPL become one of our wholly
owned subsidiaries.

As of November 13, 2006, we had advanced, as a loan,
approximately $182,388 to SAPL. SAPL shall pay interest at a rate of 10% per
annum, payable on the maturity date. In case of an event of default, SAPL shall
pay interest from the date of default at the rate of 2% per month compounded
monthly. The loans maturity date shall be the earlier date of demand or 90 days
following the date of closing of the acquisition of SAPL. The shareholders of
SAPL have placed the company into voluntary receivership. Our management has
been advised that they have done this to restructure SAPL's debt. Our management
anticipates that it will have the opportunity to purchase the assets and
operations of SAPL at a lower price than we had initially been negotiating. We
are currently preparing a sealed tender offer for purchase of SAPL, which would
involve taking over its bank debts of approximately $500,000. Because of the
debt currently owed by SAPL, we do not anticipate that SAPL will be able to
repay us our $182,388 in the near future. If we are successful in acquiring
SAPL, we plan to keep it operating for several years. Our hope is with the PystR
energy savings we can contribute, we will lower SAPL's operating costs, making
it profitable so that in a few years it will be able to repay its loans.

If we are successful in our purchase of SAPL, we anticipate
revenues on day when completion of the purchase, and those revenues will go
towards operating and the plastics subsidiary. There are no assurances that
SAPL's revenues will be sufficient to cover its expenses. It is likely that we
will have to contribute additional capital to SAPL in order to keep it
operating.

Management also anticipates searching out and securing other
uses for PyStR and the advanced gasification offerings across the forestry
industry once we are able to showcase our technologies at the SAPL plant.

6

---

We anticipate that we will generate revenues within the next
eighteen months from licenses of our proprietary technologies. If we are
successful in generating such revenues, we plan to apply them towards our
general and administrative expenses. There are no assurances that we will
receive any revenues or that such revenues will be sufficient to cover our
expenses.

Liquidity and Capital Resources

We do not expect to generate any revenues over the next twelve
months. As of September 30, 2006, our total current assets were $22,374, which
was comprised of $13,720 in cash or cash equivalents and$8,654 in prepaid
expenses and deposits. Our total current liabilities were $298,947 for a total
working capital deficit of $276,573. We expect to incur substantial losses over
the next two years.

Our accumulated deficit was $2,486,329 as at September 30,
2006. Our net loss of $2,409,391 from December 14, 2004 (date of inception) to
September 30, 2006 was mostly funded by our equity financing. During the nine
months ended September 30, 2006, we raised $201,400 in equity finance. During
the nine months ended September 30, 2006, the $158,672 was advanced by our
related parties. The increase in cash during the nine months ended September 30,
2006 was $10,910. The increase was due to our equity financing activities.

We used net cash in operations of $165,424 for the nine months
ended September 30, 2006 and net cash used in investing activities was $182,388.
Investing activities during the nine months ended September 30, 2006 were
involved in a loan advanced by us to SAPL. During the nine months ended
September 30, 2006 our monthly cash requirement was approximately $38,646,
including $18,380 monthly in operating activities and $20,266 in investing
activities. At the end of the period as at September 30, 2006, we had cash of
$13,720, which we anticipate will not cover our costs for even one month
according to our current monthly burn rate.

We believe that we need approximately an additional $1,285,859
to meet our capital requirements over the next 12 months (beginning the early
2007) for the following estimated expenses:

Expense
    AmountMarketing our gasification technology
    $112,000Development of our PyStR technology
    $500,000Payment of accounts payable and accrued liabilities
    $28,859General administrative expenses
    $145,000Purchase and upgrade SAPL
    $500,000Total
    $1,285,859


7

---

Of the $1,285,859 we need for the next 12 months, we had
$13,720 in cash or cash equivalents as of September 30, 2006, and we intend to
raise the balance of our cash requirements (approximately $1,272,000) from
private placements and possibly a registered public offering (either
self-underwritten or through a broker-dealer) within the next few months. At
this time we do not have any commitments from any broker-dealer to provide us
with financing. There is no guarantee that we will be successful in raising any
capital. If we fail in raising capital, our business may fail.

To the extent that we consider acquisitions as a means to
expand, or if we decide to commence with the manufacture of applications of our
technology, we will require additional funds. We intend to sell stock to finance
our capital requirements. There is no assurance that we will be able to obtain
such additional funds on favorable terms, if at all. If we are unsuccessful in
raising enough money through private placements and the direct offering, we may
review other financing possibilities such as bank loans. If we cannot raise at
least $1,272,000, we will not be able to carry out our full business plan and we
may not be able to become profitable and we may have to cease operations.

We anticipate that we will generate revenues within the next
eighteen months from sales of our proprietary technologies. If we are successful
in generating such revenues, we plan to apply them towards our general and
administrative expenses. If we are successful in acquiring SAPL, we expect to
begin generating revenues on completion of the acquisition. There are no
assurances that we will receive any revenues or that such revenues will be
sufficient to cover our expenses. Our inability to receive sufficient revenues
could prevent us from implementing our business plan.

Research and Development

We anticipate that we will spend $500,000 on research and
development over the next twelve months to upgrade our PyStR technology,
including upgrading a prototype. If we are successful in acquiring other
technologies, we may increase our research and development budget.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment during
the next 12 months unless we are successful in the purchase of SAPL or unless we
identify a suitable business opportunity or business combination that may
require us to invest in such equipment.

8

---

Marketing

We plan to market our gasification unit by hiring consultants
to contact companies with waste facilities, such as lumber waste and municipal
waste. We believe that our PyStR technology is suitable for companies in the oil
and gas business and in the shipping business. We plan on targeting such
companies through sales consultants that we will hire. Our marketing plan
includes attending several oil and gas, and alternative energy trade shows
during the next year. We are currently negotiating with several consultants to
act as sales persons for our technologies. We have recently entered into a
representative agreement with Ecogestion Ltda. in Santiago, Chile to act as our
exclusive distributor of our technologies in Chile. Our gasification technology
was shown and PyStR process explained to several potential clients during the
months of May and June 2006.

Employees

Over the next twelve months, we anticipate an increase in the
number of employees, only if we complete our prototype gasification unit and
begin the sales cycle. On May 5, 2006, Robert Klein resigned as President, Chief
Executive Officer and Chief Financial Officer of Syngas. The resignation was not
motivated by a disagreement with Syngas on any matter relating to our
operations, policies or practices.

On May 5, 2006, our board of directors appointed Wilf Ouellette
as President, Chief Executive Officer and Chief Financial Officer of Syngas. Mr.
Ouellette has been a director of Syngas since July 1, 2005. Mr. Ouellette has
been a director and the Chief Executive Officer of Syngas Energy, our wholly
owned subsidiary, since February 2005.

Currently we have two employees, Wilf Ouellette, our President
and Chief Executive Officer, and Gloria Porter, who works in technology
development for Syngas Energy. Such an increase on the number of employees may
significantly increase our monthly expenses and such increase in our monthly
expenses depends on the number of employees we ultimately retain, if any. To
facilitate our growth we anticipate hiring independent sales and marketing
consultants. We currently engage people as outside contractors and consultants
for bookkeeping, legal, accounting, website development and audit functions.

Audit Committee

The functions of the audit committee are currently carried out
by our Board of Directors. Our Board of Directors has determined that we do not
have an audit committee financial expert on our Board of Directors carrying out
the duties of the audit committee. Our Board of Directors has determined that
the cost of hiring a financial expert to act as a director of Syngas and to be a
member of the audit committee or otherwise perform audit committee functions
outweighs the benefits of having a financial expert on the audit committee.

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Certain Relationships and Related Party Transactions

We have not entered into any transactions with our officers,
directors, persons nominated for these positions, beneficial owners of 5% or
more of our common stock, or family members of these persons wherein the amount
involved in the transaction or a series of similar transactions exceeded
$60,000.

Known Material Trends and Uncertainties

As of September 30, 2006, we had no off balance sheet
transactions that have or are reasonably likely to have a current or future
effect on our financial condition, changes in our financial condition, revenues
or expenses, results of operations, liquidity, capital expenditures or capital
resources.

In view of the uncertainties concerning our continued existence
as a going concern, our management plans to mitigate the effect of such
conditions, management intends to take the following steps in the event that we
are not able to raise sufficient funds to meet the needs of our business plans:

- generate revenues on completion of the acquisition of SAPL;
- continue equity financing by private placements or a direct offering; and
- negotiate with our management and consultants to pay parts of salaries and
  fees with stock and stock options instead of cash.

We believe that the above discussion contains a number of
forward-looking statements. Our actual results and our actual plan of operations
may differ materially from what is stated above. Factors which may cause our
actual results or our actual plan of operations to vary include, among other
things, decision of the Board of Directors not to pursue a specific course of
action based on a re-assessment of the facts or new facts, or changes in general
economic conditions.

Critical Accounting Policies

Our financial statements are impacted by the accounting
policies used and the estimates and assumptions made by management during their
preparation. A complete summary of these policies is included in the notes to
our historical financial statements. We have identified below the accounting
policy that is of particular importance in the presentation of our financial
position, results of operations and cash flows and which require the application
of significant judgment by management.

Stock-based Compensation

We have a stock-based compensation plan, whereby stock options
are granted in accordance with the policies of regulatory authorities.

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Prior to January 1, 2006, we accounted for stock-based awards
under the recognition and measurement provisions of Accounting Principles Board
Opinion (APB) No. 25, Accounting for Stock Issued to Employees using
the intrinsic value method of accounting, under which compensation expense was
only recognized if the exercise price of our employee stock options was less
than the market price of the underlying common stock on the date of grant.

Effective January 1, 2006, we adopted the fair value
recognition provisions of SFAS No. 123R Share Based Payments, using the
modified prospective transition method. Under that transition method,
compensation cost is recognized for all share-based payments granted prior to,
but not yet vested as of January 1, 2006, based on the grant date fair value
estimated in accordance with the original provisions of SFAS No. 123, and
compensation cost for all share-based payments granted subsequent to January 1,
2006, based on the grant-date fair value estimated in accordance with the
provisions of SFAS 123R. Results for prior periods have not been restated. There
was no change to our income from operations for the period ended September 30,
2006, than if it had continued to account for share-based compensation under APB
No. 25.

All transactions in which goods or services are the
consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the
equity instrument issued, whichever is more reliably measurable. Equity
instruments issued to employees and the cost of the services received as
consideration are measured and recognized based on the fair value of the equity
instruments issued.

ITEM 3. CONTROL AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

Our Chief Executive Officer and Chief Financial Officer
evaluated our disclosure controls and procedures (as defined in Rule 13a-14
(c) of the Securities Exchange Act of 1934 (the Exchange Act) as of a date
within 90 days before the filing date of this report and has concluded that as
of the evaluation date, our disclosure controls and procedures are effective to
ensure that information we are required to disclose in reports that we file or
submit 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.

(b) Changes in internal controls

Subsequent to the date of their evaluation, there were no
significant changes in our internal controls over financial reporting or in
other factors that could significantly affect these controls. There were no
significant deficiencies or material weaknesses in our internal controls so no
corrective actions were taken.

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PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated
by any governmental authority or any other party against us. None of our
directors, officers or affiliates are (i) a party adverse to us in any legal
proceedings, or (ii) have an adverse interest to us in any legal proceedings.
Management is not aware of any other legal proceedings that have been threatened
against us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

On July 19, 2006, we issued 150,000 common shares upon the
exercise of 150,000 stock options at a price of $0.30 per share. We received
$45,000 in cash.

On August 7, 2006, we issued 40,000 common shares upon the
exercise of 40,000 stock options at a price of $0.45 per share for cash proceeds
of $18,000.

On September 8, 2006, we issued 84,000 common shares upon the
exercise of 84,000 stock options at a price of $0.45 per share. We received
$37,800 in cash.

On September 27, 2006, we issued 68,000 common shares upon the
exercise of 68,000 stock options at a price of $0.45 per share. We received
$30,600 in cash.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES:

None

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

None

ITEM 5. OTHER INFORMATION:

None

ITEM 6. EXHIBITS

|Exhibit | Exhibit                                                                                                                                                                                               
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | **Description**                                                                                                                                                                                       
|        |                                                                                                                                                                                                       
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002                                                        
|        |                                                                                                                                                                                                       
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002

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SIGNATURES

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

|                         | SYNGAS INTERNATIONAL CORP.         
|------------------------ | -----------------------------------
|                         |                                    
|Dated: November 16, 2006 | /s/
      Wilf Ouellette           
|                         | Wilf Ouellette                     
|                         | President, Chief Executive Officer,
|                         | Chief Financial Officer            
|                         | Principal Accounting Officer       

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