UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934



|For the quarterly period endedSeptember 30, 2007
|------------------------------------------------

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _______________to _______________



|Commission file number000-28305
|-------------------------------



|Energy Quest Inc.
|-----------------

|Nevada(State or other jurisdiction of incorporation or organization) | 91-1880015(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------- | ----------------------------------------------
|                                                                    
|850 South Boulder Hwy., Suite 169                                    |                                               
|Henderson, Nevada                                                    | 89015 - 7564                                  
|(Address of principal executive offices)                             | (Zip Code)                                    



|(702) 568 4131(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 16, 2007, the registrants outstanding common stock consisted of2,565,549shares.

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Table of ContentsPART I - FINANCIAL INFORMATION
     
     F-1ITEM 1. Financial Statements
     
     F-1ITEM 2. Management Discussion and Analysis of Financial Condition / Plan of Operations
     
     2ITEM 3. Control and Procedures
     
     13PART II  OTHER INFORMATION
     
     13ITEM 1. Legal Proceedings
     
     13ITEM 2. Unregistered Sales of Equity Securities
     
     13ITEM 3. Defaults upon Senior Securities
     
     14ITEM 4. Submission of Matters to a Vote of Security Holders
     
     14ITEM 5. Other Information
     
     14ITEM 6. Exhibits
     
     15


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PART I - FINANCIAL INFORMATION

Safe Harbor Statement

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.

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs, and risk of declining revenues. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors. These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements. The following discusses our financial condition and results of operations based upon our consolidated financial statements which have been prepared in conformity with accounting principles generally accepted in the United States. It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

ITEM 1. Financial Statements

Our unaudited interim consolidated financial statements are stated in US 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. When we refer to Energy Quest, we, our or us, we are referring to Energy Quest Inc.

Energy Quest Inc.



|(Formerly Syngas International Corp.)(A Development Stage Company)(Expressed in US dollars)(Unaudited)September 30, 2007
|------------------------------------------------------------------------------------------------------------------------

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

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

F-1

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|Energy Quest Inc.                                                 |  |               |  |             
|----------------------------------------------------------------- |  | ------------- |  | ------------
|(Formerly Syngas International Corp.)                             |  |               |  |             
|(A Development Stage Company)                                     |  |               |  |             
|Consolidated Balance Sheets                                       |  |               |  |             
|(Expressed in US dollars)                                         |  |               |  |             
|(Unaudited)                                                       |  |               |  |             
|                                                                  |  | September 30, |  | December 31,
|                                                                  |  | 2007          |  | 2006        
|                                                                  |  | $             |  | $           
|Assets                                                            |  |               |  |             
|Current Assets                                                    |  |               |  |             
|Cash and cash equivalents                                         |  | 84,788        |  | 4,694       
|Prepaid expenses and deposits                                     |  | 239,796       |  | 8,654       
|Note receivable                                                   |  | 61,801        |  |            
|                                                                  |  |               |  |             
|Total Current Assets                                              |  | 386,385       |  | 13,348      
|Intangible Asset(Note 3)                                          |  | 25,204        |  | 25,204      
|                                                                  |  |               |  |             
|Total Assets                                                      |  | 411,589       |  | 38,552      
|                                                                  |  |               |  |             
|                                                                 
|Liabilities and Stockholders' Deficit                             |  |               |  |             
|Current Liabilities                                               |  |               |  |             
|Accounts payable and accrued liabilities                          |  | 143,221       |  | 25,105      
|Accounts payable - related parties(Note 4)                        |  | 136,204       |  | 219,585     
|Loans payable(Note 5)                                             |  | 391,406       |  | 67,062      
|                                                                  |  |               |  |             
|Total Liabilities                                                 |  | 670,831       |  | 311,752     
|                                                                  |  |               |  |             
|Stockholders' Deficit                                             |  |               |  |             
|Preferred Stock                                                   |  |               |  |             
|Authorized: 1,000,000 shares, with a $0.01 par value; none issued |  |              |  |            
|Common Stock                                                      |  |               |  |             
|Authorized: 200,000,000 shares, with a $0.001 par value;          |  |               |  |             
|Issued: 2,165,049 shares (December 31, 2006  1,992,518 shares)   |  | 2,165         |  | 1,993       
|Additional Paid-in Capital                                        |  | 3,114,272     |  | 2,603,944   
|Accumulated Other Comprehensive Loss                              |  | (5,877)       |  | (1,097)     
|Deficit Accumulated During the Development Stage                  |  | (3,369,802)   |  | (2,878,040) 
|                                                                  |  |               |  |             
|Total Stockholders Deficit                                       |  | (259,242)     |  | (273,200)   
|                                                                  |  |               |  |             
|Total Liabilities and Stockholders Deficit                       |  | 411,589       |  | 38,552      
|                                                                  |  |               |  |             

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

F-2

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|Energy Quest Inc.                                                  |  |               |  |               |  |               |  |               |  |                    
|------------------------------------------------------------------ |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | -------------------
|(Formerly Syngas International Corp.)                              |  |               |  |               |  |               |  |               |  |                    
|(A Development Stage Company)                                      |  |               |  |               |  |               |  |               |  |                    
|Consolidated Statements of Operations and Other Comprehensive Loss |  |               |  |               |  |              
|(Expressed in US dollars)                                          |  |               |  |               |  |               |  |               |  |                    
|(Unaudited)                                                        |  |               |  |               |  |               |  |               |  |                    
|                                                                  
|                                                                   |  | For the       |  | For the       |  | For the       |  | For the       |  | Accumulated from   
|                                                                   |  | Three Months  |  | Three Months  |  | Nine Months   |  | Nine Months   |  | December 14, 2004  
|                                                                   |  | Ended         |  | Ended         |  | Ended         |  | Ended         |  | (Date of Inception)
|                                                                   |  | September 30, |  | September 30, |  | September 30, |  | September 30, |  | to September 30,   
|                                                                   |  | 2007$         |  | 2006
$        |  | 2007$         |  | 2006$         |  | 2007$              
|                                                                   |  |               |  |               |  |              
|Revenue                                                            |  |              |  |              |  |              |  |              |  |                   
|                                                                  
|                                                                  
|Expenses                                                           |  |               |  |               |  |               |  |               |  |                    
|Consulting and management fees                                     |  | 191,863       |  | 24,085        |  | 330,722       |  | 1,180,736     |  | 2,711,035          
|General and administrative                                         |  | 15,002        |  | 70,211        |  | 40,148        |  | 82,331        |  | 148,854            
|Professional fees                                                  |  | 8,795         |  | 14,313        |  | 122,214       |  | 46,752        |  | 246,201            
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|                                                                   |  | 215,660       |  | 108,609       |  | 493,084       |  | 1,309,819     |  | 3,106,090          
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|Loss before the following:                                         |  | (215,660)     |  | (108,609)     |  | (493,084)     |  | (1,309,819)   |  | (3,106,090)        
|                                                                  
|Interest income                                                    |  | 762           |  |              |  | 1,322         |  |              |  | 1,322              
|Gain on write-off of debt                                          |  |              |  | 5,827         |  |              |  | 5,827         |  | 5,826              
|Loss on write-off of receivable                                    |  |              |  |              |  |              |  |              |  | (193,922)          
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|                                                                  
|Net loss                                                           |  | (214,898)     |  | (102,782)     |  | (491,762)     |  | (1,303,992)   |  | (3,292,864)        
|Other comprehensive loss                                           |  |               |  |               |  |               |  |               |  |                    
|Foreign currency translation adjustment                            |  | (2,033)       |  | (156)         |  | (4,780)       |  | (1,350)       |  | (5,877)            
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|Total Comprehensive Loss                                           |  | (216,931)     |  | (102,938)     |  | (496,542)     |  | (1,305,342)   |  | (3,298,741)        
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|Net Loss Per Share  Basic and Diluted                             |  | (0.10)        |  | (0.05)        |  | (0.24)        |  | (0.67)        |  |                    
|                                                                   |  |               |  |               |  |               |  |               |  |                    
|Weighted Average Shares Outstanding                                |  | 2,165,000     |  | 1,965,000     |  | 2,092,000     |  | 1,942,000     |  |                    
|                                                                   |  |               |  |               |  |               |  |               |  |                    

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

F-3

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|Energy Quest Inc.                             |  |               |  |               |  |                       
|--------------------------------------------- |  | ------------- |  | ------------- |  | ----------------------
|(Formerly Syngas International Corp.)         |  |               |  |               |  |                       
|(A Development Stage Company)                 |  |               |  |               |  |                       
|Consolidated Statements of Cash Flows         |  |               |  |               |  |                       
|(Expressed in US dollars)                     |  |               |  |               |  |                       
|(Unaudited)                                   |  |               |  |               |  |                       
|                                             
|                                             
|                                              |  | For the       |  | For the       |  | Accumulated from      
|                                              |  | Nine Months   |  | Nine Months   |  | December 14, 2004     
|                                              |  | Ended         |  | Ended         |  | (Date of Inception) to
|                                              |  | September 30, |  | September 30, |  | September 30,         
|                                              |  | 2007          |  | 2006          |  | 2007                  
|                                              |  | $             |  | $             |  | $                     
|                                             
|Cash Flows Used In Operating Activities       |  |               |  |               |  |                       
|Net loss                                      |  | (491,762)     |  | (1,303,992)   |  | (3,292,864)           
|                                             
|Adjustments to reconcile net loss to net cash |  |               |  |               |  |                       
|used in operating activities:                 |  |               |  |               |  |                       
|Stock-based compensation                      |  | 180,658       |  | 654,801       |  | 1,175,221             
|Shares issued for expenses                    |  |              |  | 499,284       |  | 1,295,504             
|Gain on write-off of debt                     |  |              |  | (5,827)       |  | (5,826)               
|Loss on write-off of loan receivable          |  |              |  |              |  | 193,922               
|                                             
|Changes in operating assets and liabilities:  |  |               |  |               |  |                       
|Accrued interest                              |  | (1,301)       |  |              |  | (1,301)               
|Accounts payable and accrued liabilities      |  | 117,897       |  | (10,959)      |  | 126,717               
|Accounts payable  related parties            |  | 123,468       |  | 1,269         |  | 123,468               
|                                              |  |               |  |               |  |                       
|                                             
|Net Cash Used in Operating Activities         |  | (71,040)      |  | (165,424)     |  | (385,159)             
|                                              |  |               |  |               |  |                       
|                                             
|Investing Activities                          |  |               |  |               |  |                       
|Net cash acquired on business acquisition     |  |              |  |              |  | 565                   
|Purchase of intangible assets                 |  |              |  |              |  | (25,000)              
|Loan receivable                               |  |              |  | (182,388)     |  | (193,922)             
|                                              |  |               |  |               |  |                       
|                                             
|Net Cash Used In Investing Activities         |  |              |  | (182,388)     |  | (218,357)             
|                                              |  |               |  |               |  |                       
|                                             
|Financing Activities                          |  |               |  |               |  |                       
|Advances from related parties                 |  |              |  | 158,672       |  | 224,734               
|Proceeds from issuance of common stock        |  | 30,000        |  | 201,400       |  | 329,144               
|Loans payable                                 |  | 120,915       |  |              |  | 135,304               
|                                              |  |               |  |               |  |                       
|                                             
|Net Cash Provided By Financing Activities     |  | 150,915       |  | 360,072       |  | 689,182               
|                                              |  |               |  |               |  |                       
|                                             
|Effect of Exchange Rate Changes on Cash       |  | 219           |  | (1,350)       |  | (878)                 
|                                              |  |               |  |               |  |                       
|                                             
|Increase in Cash and Cash Equivalents         |  | 80,094        |  | 10,910        |  | 84,788                
|                                             
|Cash and Cash Equivalents, beginning of       |  |               |  |               |  |                       
|period                                        |  | 4,694         |  | 2,810         |  |                      
|                                              |  |               |  |               |  |                       
|                                             
|Cash and Cash Equivalents, end of period      |  | 84,788        |  | 13,720        |  | 84,788                
|                                              |  |               |  |               |  |                       
|                                             
|                                             
|Supplemental Disclosures                      |  |               |  |               |  |                       
|                                             
|Cash paid for taxes                           |  |              |  |              |  |                      
|Cash paid for interest                        |  |              |  |              |  |                      
|                                              |  |               |  |               |  |                       
|                                             
|Non-Cash Financing and Investing Activities   |  |               |  |               |  |                       
|                                             
|Common stock issued for intangible asset      |  |              |  |              |  | 204                   
|Common stock issued fro promissory note       |  | 60,500        |  |              |  | 60,500                
|                                              |  |               |  |               |  |                       

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

F-4

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|1. | Nature of Operations and Going Concern Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | On January 28, 2005, Energy Quest Inc. (Energy Quest) 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. Energy Quest 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 Energy Quest was completed through the issuance of one share of Energy Quest common stock for each share of Syngas Energy outstanding. Energy Quest issued 30,047,500 (1,502,375 post reverse stock split) 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 Energy Quest. On May 31, 2007, Energy Quest changed its name from Syngas International Corp. to Energy Quest Inc.
|  
|   | The acquisition of Syngas Energy by Energy Quest 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 Energy Quest. Assets acquired and liabilities assumed are reported at their historical amounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | These consolidated financial statements include the accounts of Energy Quest 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 inter-company balances and transactions have been eliminated on consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | As of September 30, 2007, 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 $120,000,000 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 $3,369,802 since inception and at September 30, 2007, has a working capital deficiency of $284,446 and these conditions, among others, give rise to substantial doubt about the Companys ability to continue as a going concern.                                                                                                        
|  
|   | On July 17, 2007, the Company filed an SB-2 Registration Statement with the United States Securities and Exchange Commission which was declared effective on July 25, 2007, to register 1,679,000 shares of common stock. Of the 1,679,000 shares registered, 1,000,000 shares are being directly offered at $3.00 per share for gross proceeds of $3,000,000, and 679,000 shares are for resale by existing stockholders of the Company at prevailing market price established on the OTC Bulletin Board at the time of sale or any prices as the selling shareholders determine. The Company will not receive any proceeds from the resale of shares of common stock by the selling stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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F-5

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|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
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|   | b)                                                    
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|   | f)                                                    
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F-6

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|2. | Summary of Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|   | g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|   | h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|   | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|   | j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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|3. | Intangible Asset                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | On December 24, 2004, the Company purchased an integrated gasification production system from the CEO of the Company. The 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 500,000 post reverse stock split 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 had the option, until June 30, 2007, of cancelling the 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. By September 30, 2007, the 500,000 common shares were released from escrow.
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|4. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  

|a. | As at September 30, 2007, $221,990 (December 31, 2006  $201,764) is owing to former related companies. This amount is unsecured, non-interest bearing and due on demand. At September 30, 2007, this amount is included in loans payable.                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. | As at September 30, 2007, $20,936 (December 31, 2006 - $17,821) is owing to a company with a common director. This amount is unsecured, non-interest bearing and has no terms of repayment.                                                                                                                                  
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|c. | During the nine-month period ended September 30, 2007, the Company recorded $75,851 (2006 - $nil) for management services provided by the President of the Company. At September 30, 2007, the Company was owed $8,200 by the President of the Company. At September 30, 2007, $57,480 is included in due to related parties.
|  
|d. | During the nine-month period ended September 30, 2007, the Company recorded $57,788 (2006 - $nil) for management services provided by the Treasurer of the Company. At September 30, 2007, this amount is included in due to related parties.                                                                                
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|5. | Loans Payable                                                           
|-- | ------------------------------------------------------------------------
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|   | Loans payable are unsecured, non-interest bearing and are due on demand.
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F-7

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|6. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
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|7. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|   | 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 June 25, 2007, the Company terminated the 2005 Stock Option plan and cancelled all outstanding options granted under the 2005 Stock Option Plan. The Company removed from registration all remaining registered unissued options on July 17, 2007. Shares of the Companys common stock that have been offered, issued and sold upon the exercise of options remain effective.
|  
|   | 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 June 25, 2007, the Company terminated the 2005 Non-Qualified Plan and removed from registration all remaining registered unissued common shares on July 17, 2007. Shares of the Companys common stock that have been offered, issued and sold under the 2005 Non-Qualified Plan remain effective.                                                                   
|  
|   | 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. On June 25, 2007, the Company terminated the September 2005 Non-Qualified Plan and removed from registration all remaining registered unissued common shares on July 17, 2007. Shares of the Companys common stock that have been offered, issued and sold under the 2005 Non-Qualified Plan remain effective.                                
|  
|   | A summary of the Companys stock option activity is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  

|                                |  |             |  | Weighted |  |             |  |          
|------------------------------- |  | ----------- |  | -------- |  | ----------- |  | ---------
|                                |  |             |  | Average  |  | Remaining   |  |          
|                                |  | Number of   |  | Exercise |  | Contractual |  | Intrinsic
|                                |  | Options     |  | Price    |  | Life        |  | Value    
|                                |  |             |  |          |  |             |  |          
|                               
|Outstanding, January 1, 2007    |  | 2,079,667   |  | $ 0.40   |  |             |  |          
|                               
|Cancelled / Forfeited           |  | (2,079,667) |  | $ 0.40   |  |             |  |          
|                                |  |             |  |          |  |             |  |          
|                               
|Outstanding, September 30, 2007 |  | -           |  | -        |  | -           |  | -        
|                                |  |             |  |          |  |             |  |          

F-8

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|8. | Commitments
|-- | -----------
|  
|   | a)         
|  
|   |            
|  
|   |            
|  
|   |            
|  
|   |            
|  
|   |            
|  
|   | b)         
|  
|   | c)         
|  
|   | d)         
|  
|   | e)         
|  
|   | f)         
|  

F-9

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|9. | Subsequent Events
|-- | -----------------
|  
|   | a)               
|  
|   | b)               
|  
|   |                  
|  
|   |                  
|  
|   | c)               
|  

F-10

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ITEM 2. Management Discussion and Analysis of Financial Condition / Plan of Operations

Overview

We were incorporated as a Nevada company on June 20, 1997. We are a development stage company in the development and production of hydrogen-enriched alternative fuels in an environmentally responsible manner. We plan to employ gasification technologies and catalytic conversion processes to produce clean fuels. We design, build, lease and in some cases operate the following gasification technologies with broad potential application within the energy field:

- Pyrolysis Steam Reformer (PyStR), which utilizes for steam reformation of coal and other carbonaceous feedstocks, and separates hydrogen and carbon dioxide into separate streams;
- M2 Fluidized Bed Gas Generator (M2), an air blown fluid bed gasifier which converts waste solid fuel sources into gaseous form; and
- Modular Advanced Controlled Air Incinerator, which allows for incineration of waste, and is ideally suited to medical waste and moderately prepared municipal waste.

Our principal offices are located at 850 South Boulder Highway, Suite 169, Henderson, Nevada. Our fiscal year end is December 31. We changed our name from Syngas International Corp. to Energy Quest Inc. on May 31, 2007.

We have one wholly-owned subsidiary, Syngas Energy Corp., 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 Energy was incorporated as a British Columbia company on December 14, 2004.

Recent Business Development

On June 7, 2007 we completed carbon dioxide sequestration technology, a component of our PyStR technology. On June 11, 2007 we completed our company restructuring and plan to concentrate on using our PyStR and catalytic process to produce butanol or hydrogen from lignite coal or petroleum coke as well as feed-stocks.

On June 8, 2007, we appointed Jim Clark as a director and to serve on our Board of Directors to replace Robert Klein.

We are in the process of building equipment that we intend to license and lease. On July 24, 2007 we entered into an agreement with I-Coda Group, of Edmonton, Alberta, for the manufacture of units using our PyStR and M2 gasification technology. In April 2007 we also entered into other two agreements for exclusive licenses of our technologies in geographic territories with two companies, Re-Gen International Corporation and Beaufort Energy Solutions, Inc.

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On September 4, 2007, we entered into a 0% convertible debenture due September 4, 2012 with Jain Vasant whereby Mr. Vasant agreed to loan $120,000,000 to us. Pursuant to the convertible
debenture the funds will be transferred to us within 10 business days after the convertible debenture documents are successfully posted on Euroclear. As of November 16, 2007 the document are in the final stages of being posted and we expect to
receive the funds within the next two weeks.

Also on September 4, 2007 we increased the number of directors on our Board of Directors from 3 to 4 and appointed Gilles H. Imbeault as a director and our Vice President of Finance.

On September 13, 2007 we completed the research and development of our small Modular Bio-energy units: Model FS324 and M2-3 Gasifier.

In October 2007 we retained C & H Capital Inc. and Internet Capital Markets Corporation for raising capital and engaged Jeffrey Langberg as a consultant for business development.

Results of Operations

Lack of Revenues

Since our inception on December 14, 2004 to September 30, 2007, we had not yet earned any revenues. As of September 30, 2007, we had an accumulated deficit of $3,369,802. At this time, our
ability to generate any significant revenues continues to be uncertain. Our financial statements contain an additional explanatory paragraph in Note 1, 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.

Net Loss

We incurred net loss of $3,292,864 since December 14, 2004 (date of inception) to September 30, 2007. Our net loss increased $112,116 to $214,898 for the three months ended September
30, 2007 from $102,782 for the same period in 2006. Our net loss decreased $812,230 to $491,762 for the nine months ended September 30, 2007 from $1,303,992 for the same period in 2006. The significant decrease in net loss in the
nine month periods ended September 30, 2007 was mainly due to the cancellation of all outstanding options granted as consulting fees. On June 25, 2007, we terminated the 2005 Stock Option plan and cancelled all outstanding options granted under the
2005 Stock Option Plan.

For the three months ended September 30, 2007, our net loss per share was $0.10, compared to net loss of $0.05 per share for the same period in 2006. For the nine months ended September
30, 2007, our net loss per share was $0.24, compared to net loss of $0.67 per share for the same period in 2006.

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Expenses

Our total expenses from December 14, 2004 (date of inception) to September 30, 2007 were $3,106,090 and consisted of $2,711,035 in consulting and management fees, $148,854 in general
and administrative fees, and $246,201 in professional fees. Total expenses for the three months ended September 30, 2007 were $215,660, compared to total expenses of $108,609 for the same period in 2006. Total expenses decreased
$816,735 to $493,084 for the nine months ended September 30, 2007 from $1,309,819 for the same period in 2006, mostly due to the cancellation of all outstanding options granted as consulting fees.

Our consulting and management fees increased $167,778 to $191,863 for the three months ended September 30, 2007 from $24,085 for the same period in 2006, as more consultants were
hired during the three months ended September 30, 2007. Our consulting and management fees for the nine months ended September 30, 2007 were $330,722, compared to $1,180,736 for the same period in 2006. During the nine month period ended
September 30, 2007, our consulting fees decreased as a result of the cancellation of all outstanding options. Our consulting and management fees consisted mainly of amounts paid to our CEO and CFO and fees paid to our other officers and consultants.

Our general and administrative expenses decreased to $55,209 or 79% from $70,211 for the three months ended September 30, 2006 to $15,002 for the same period ended September 30,
2007. Our general and administrative expenses decreased $42,183 or 51% from $82,331 for the nine months ended September 30, 2006 to $40,148 for the same period ended September 30, 2007. The decrease in general and administrative expenses
was mainly due to cost-cutting measures implemented by our management. Our general and 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 decreased $5,518 or 39% to $8,795 for the three months ended September 30, 2007 from $14,313 for the same period in 2006, mainly due to less legal and auditing
services provided in the three month periods ended September 30, 2007. Our professional fees increased $75,462 or 161% to $122,214 for the nine months ended September 30, 2007 from $46,752 for the same period in 2006. The increase in
professional fees was due to additional legal and auditing services provided relating to our increased day to day operating activities. Our professional fees consisted primarily of legal, accounting and auditing fees.

Plan of Operation

We believe that we need approximately an additional $3,450,000 to meet our capital requirements over the next 12 months (beginning November, 2007) for the following estimated expenses:

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Description
     
     Estimated ExpenseMarketing our gasification technologies
     
     $200,000Continued improvement of our PyStR and other technologies
     
     $1,200,000Further commercializing our gasification technologies
     
     $400,000Manufacturing of Modular Bio-energy units
     
     $400,000Payment of accounts payable and accrued
     
     $250,000liabilitiesGeneral and administrative expenses
     
     $500,000Professional fees
     
     $100,000Consulting fees
     
     $200,000Investor relations expenses
     
     $100,000Patent application costs (including legal fees)
     
     $100,000Total
     
     $3,450,000


Our corporate strategy for the next 12 months includes the following:

- Produce, sell, lease and maintain energy generators that we have developed;
- License our integrated gasification technologies to third parties in North American, European and global markets;
- Continually improve our gasification technologies and commercializing our technologies;
- Expand our technology base by acquiring complementary technologies to our PyStR and other technologies through purchasing or licensing arrangements;
- Identify partnerships that will benefit from having in-house energy production facilities;
- File patents on several technologies, including the PyStR process, the M2 Fluidized Bed Gas Generator and seek accredited valuations for these intellectual properties in a variety of markets including the U.S., Germany and Canada; and
- Create additional service lines to complement current operations.

The PyStR Process

PyStR is a low cost proprietary hydrogen production technology process. This process can directly produce high purity hydrogen from common cheap biomass and other carbonaceous feed-stocks such as oil sands, coal and petroleum coke. The PyStR technology involves the simultaneous pyrolysis and steam reforming of virtually any carbon-based material. Its products include separate high purity streams of hydrogen (H2), carbon dioxide (CO2) and nitrogen (N2) produced in a relatively low cost stainless steel or refractory lined vessel. Approximately 100% of carbon dioxide can be prevented from entering the atmosphere. It produces no flue gas.

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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.

Carbon dioxide sequestration technology

On June 7, 2007 we completed carbon dioxide sequestration technology, a component of the PyStR technology. Traditional gasification technology lets carbon dioxide escape into the air, but the PyStR technology captures carbon dioxide that is commonly accepted to be responsible for global warming. This captured carbon dioxide emission reduction creates an opportunity for us to pursue carbon credits by capturing produced carbon dioxide gases from our gasification process and injecting carbon dioxide into oil-bearing formations for geologic storage and enhanced oil recovery and is called carbon neutral.

The PyStR hydrogen production process is used in wells that have already passed through primary production, where natural pressure in the well pushes out the oil, and in wells that have passed secondary production using water or natural gas flooding. In primary and secondary production, well pressure eventually falls to levels where output is so thin it's not profitable. Use of carbon dioxide allows an opportunity to take a third run at the reservoir to tap a potentially large amount of remaining oil. The biggest problem has been a reliable supply of carbon dioxide. We, through our PyStR hydrogen production process, can capture carbon dioxide that is produced either as a primary or bi-product.

Butanol

We plan to use our PyStR and catalytic process to produce butanol from carbon based feedstocks. Butanol is a 4-carbon alcohol that is presently made through a fermentation process in the same manner as ethanol using mostly grains and corn.

Advantages of butanol are as follows:

- Energy density is only 10% below gasoline;
- Octane rating is 25% higher than gasoline;
- Butanol does not eat away at plastic or rubber engine parts (like ethanol/methanol);
- Butanol can be pumped, stored, or transported in same equipment as gasoline;
- Any percentage gas plus butanol (10 to 100%) will run in today's cars;
- No modifications are required unlike ethanol fuelled cars;
- Butanol does not absorb water like ethanol or methanol; and
- Butanol burns cleaner than gasoline.

M2 Fluidized Bed Gas Generator (M2 gasifier)

In Fiscal 2005 we acquired Syngas Energy along with all rights and title to its advanced gasification process. The M2 gasifier is an air blown fluid bed gasifier, which converts waste solid fuel sources into a gaseous form. The M2 gas produced can be used in most boilers, kilns and furnaces to offset the use of natural gas.

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The M2 fluidized bed gasification process offers substantial benefits compared to simple burning processes, and other forms of gasification. The gasifier has been successfully used to convert
biomass wastes (i.e. wood wastes, bark, and agricultural wastes) into a clean fuel gas that can be used to fire
various types of industrial equipment.

The overall thermal efficiency of fluid bed gasifiers is typically in the range of 75% to over 90%, depending on the ash and moisture content of the fuel. Unlike some burners (such as suspension
burners) or old style fixed bed gasifiers, the fluid bed gasifiers can operate satisfactorily with highly variable feed materials ranging from coal, shredded wood and bark to sawdust fines, or lump wood with particle sizes of less than 1 1/2 - 2
inches. In contrast, other types of gasifiers or burners require either dry pellets, nuggets of clean wood, or uniformly dry sander dust. Thus the various types of fuels generally available around lumber mills can be used in fluid bed gasifiers with
good results. The fluid bed gasifier does not have moving grates or other moving parts in the high temperature regions of the bed. Where there are moving parts, heavy duty industrial components proven in lumber and pulp mill operations are used.
Reliability is thus high.

The size of energy conversion systems is generally dictated by their air flow. Because fluid bed gasifiers use comparatively small amounts of air, the equipment is comparatively small and
compact. This permits systems to be completely shop fabricated and assembled on skids thereby reducing purchase price and installed costs. Because the process produces a fuel gas rather than just quantities of heat, it can be easily applied to a
variety of industrial processes including boilers, dry kilns, veneer dryers, or several pieces of equipment at once. Operation with wood/bark fuels results in very low emissions, including low NOx, carbon monoxide, and particulate emissions. No "tail end" exhaust cleanup devices are required.

Commercialization of the PyStR and M2 technologies

We are focusing our efforts in getting the PyStR and M2 technologies to market. We completed prototypes of the PyStR hydrogen production process and the M2 fluidized bed gasification
process. In April 2007 we began to commercialize the PyStR and M2 technologies.

Manufacturing agreement with I-Coda

On July 24, 2007 we entered into a manufacturing agreement with I-Coda Group, of Edmonton, Alberta, for the manufacture of units using our PyStR and M2 gasification technologies. Pursuant
to the agreement, I-Coda has agreed to manufacture and package both the PyStR and M2 gasification units, for which we will pay the cost of manufacturing the units plus 15% and all taxes. The parties have agreed to jointly develop commercial
units using the PyStR technology for use in emerging markets around the world. The agreement prohibits I-Coda from manufacturing products that will compete with the gasification units and allows us to retain all intellectual property relating
to the design of the units. Any intellectual property developed jointly by the parties pursuant to the agreement will be our exclusive property. The term of the agreement is one year and will be renewed annually unless terminated by either party on
two months notice.

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Modular Bio-energy units

On September 13, 2007 we completed the research and development of our small Modular Bio-energy units: Model FS324 and M2-3 Gasifier. By using our PyStR and M2 gasification technologies,
these units can convert waste biomass or coal to electricity and heat.

Model FS324 will supply electricity and heat for a single family home. This system is capable of providing up to 7 KW per hour of electricity and 33 thousand British thermal unit (BTU) of gas
for heating and cooking purposes over a 24 hour period. More gas can be provided when power generation is reduced. This unit consumes 12.5 pounds of powdered coal per hour. M2-3 Gasifier will provide a community of approximately 20-30 families. M2-3
Gasifier, a small community unit, can provide 170 kilowatts per hour plus 800 thousand BTU per hour of gas. This ratio can change if less electrical energy is required. This system is sized to produce a maximum of 200 kilowatts per hour. This system
consumes 300 pounds of powdered coal per hour. The price for Model FS324 will be approximately $28,000. The price for M2-3 Gasifier will be approximately $400,000. These prices do not include installation.

Our small Modular Bio-energy units will be deployed in remote areas of Canada, United States, South Africa and India. Our small Modular Bio-energy units will give remote areas an alternative
energy source. These units have state of the art controls and are user friendly. We plan to commence manufacturing our small Modular Bio-energy units in December, 2007.

The Modular Advanced Controlled Air Incinerator

We have developed a Modular, Controlled Air, Factory Built and Packaged incinerator. The unit is a Starved Ignition Chamber, Excess Air Combustion Chamber. These are not Pyrolytic Units since
air is introduced into the ignition chamber. All units are designed and rated on a Burning Rate Basis, meaning they will burn waste as fast as it is charged.

The integrated design of the ignition chamber, flame port and combustion chamber allows proper and constant gas velocities to insure proper air/fuel (waste) ratios for optimum combustion
efficiency. The units are ideally suited for medical waste and moderately prepared municipal waste disposal.

Liquidity and Capital Resources

We do not expect to generate any revenues over the next twelve months. As of September 30, 2007, our current assets were $386,385, which was comprised of $84,788 in cash and cash
equivalents, $239,796 in prepaid expenses and deposits, and $61,801 in loan receivable. As of September 30, 2007 we had a working capital deficit of $284,446.

Our net loss of $3,292,864 from December 14, 2004 (date of inception) to September 30, 2007 was mostly funded by our equity financing. We expect to incur substantial losses over the next two
years. During the nine months ended September 30, 2007 our cash position increased by $80,094, mainly due to the sale of our common stock for cash and loans received in this period.

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During the nine months ended September 30, 2007, we received net cash of $150,915 from financing activities compared to $360,072 for the same period in 2006. We used net cash of
$71,040 in operating activities compared to $165,424 for the same period in 2006. We used net cash of $0 in investing activities compared to $182,388 for the same period in 2006. During the nine months ended September 30, 2007 our
monthly cash requirement was approximately $8,000. At the end of the period as at September 30, 2007, we had cash and cash equivalent of $84,788, which will cover our costs for ten months according to our current monthly burn
rate.

We are currently not in good short-term financial standing. We anticipate that we may not generate any revenues in the near future and we will not have enough positive internal operating cash
flow until we can generate substantial revenues, which may take the next few years to fully realize. There is no assurance we will achieve profitable operations. We have historically financed our operations primarily by cash flows generated from the
sale of our equity securities and through cash infusions from officers and outside investors in exchange for debt and/or common stock.

We believe that we need approximately $3,450,000 to meet our capital requirements over the next 12 months (beginning November 2007). Of the $3,450,000, we had $84,788 in cash and
cash equivalents as of September 30, 2007. We intend to meet the balance of our cash requirements for the next 12 months through external sources: a combination of debt financing and equity financing through private placements.

On September 4, 2007, we entered into a 0% convertible debenture due September 4, 2012 with Jain Vasant whereby Mr. Vasant agreed to loan us $120,000,000. At any time after September 4, 2012
and until September 4, 2017 Mr. Vasant has the right to convert all, or a portion of, the principal amount of the convertible debenture into our common shares at a conversion price of $50.00 per share. Pursuant to the convertible debenture the
funds will be transferred to us within 10 business days after the convertible debenture documents are successfully posted on Euroclear. As of November 16, 2007 the agreement had not closed.

Once the agreement is closed, we will have enough capital to meet our cash requirements over the next twelve months. However, we cannot guarantee that the agreement will successfully be closed
on a timely basis. If the agreement fails to be closed, we intend to raise the balance of our cash requirements (approximately $3,365,000) from private placements, loans, or 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. There is no assurance that
we will be able to obtain such additional funds on favorable terms, if at all. If we fail in raising capital, our business may fail and we may curtail or cease our operations.

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Going Concern

Our operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, obtain a
customer base, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technologies and products on a timely and cost-effective basis, respond to competitive developments and emerging industry
standards, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial
condition and results of operations.

We are seeking equity financing to provide for the capital required to market and develop our technologies and fully carry out our business plan. We cannot guarantee we will be successful in our
business operations. A critical component of our operating plan impacting our continued existence is our ability to obtain additional capital through additional equity and/or debt financing. 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 never generated any revenues and have incurred significant operating losses from operations. We may continue to experience net negative cash flows from operations and will be required to
obtain additional financing to fund operations through equity securities offerings and bank borrowings to the extent necessary to provide working capital. Our continuation as a going concern is dependent upon our ability to generate sufficient
cash flow from stockholders or other outside sources to sustain operations and meet our obligations on a timely basis and ultimately to attain profitability. We have limited capital with which to pursue our business plan. There can be no assurance
that our future operations will be significant and profitable, or that we will have sufficient resources to meet our objectives.

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These factors raise substantial doubt about our ability to continue as a going concern. Our auditors have issued a going concern opinion. This means that our auditors believe there is
substantial doubt that we can continue as an on-going business for the next twelve months. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business. If we are unable to
obtain additional financing from outside sources and eventually produce enough revenues, we may be forced to sell our assets, curtail or cease our operations.

Off-Balance Sheet Arrangements

As of September 30, 2007, 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.

Research and Development

Since our inception to September 30, 2007, we have spent approximately $250,000 on research and development.

We anticipate that we will spend $1,200,000 on research and development over the next twelve months to upgrade our PyStR and other technologies. If we are successful in acquiring other
technologies, we may increase our research and development budget.

Intellectual Property

On December 24, 2004, we purchased an integrated gasification production system from our CEO. The technology combines modern gasification with gas turbine technologies to produce synthetic gas
or electricity. We intend to further develop the technology to make it commercially viable and intend to then sell or license the technology. We plan to file patents on several technologies, including the PyStR process and the M2 Fluidized Bed
Gas Generator over next 12 months. We have not filed for any protection of our trademarks.

Employees and Consultants

As of September 30, 2007, we have two full time employees. In addition to employing Wilf Ouellette, our President, CEO, and CFO, we have engaged Steve Eilers as Secretary and Treasurer. We
entered into an executive employment agreement with Mr. Ouellette dated April 17, 2007, for the position of Chief Executive Officer, for a period of 60 months at a base salary of $150,000 per year. On April 20, 2007 we entered into an officer
employment agreement with Steve Eilers, for the position of Secretary and Treasurer, for a period of 60 months at a base salary of $130,000 per year.

We also engage people as outside contractors and consultants for marketing, business development, investor relations, bookkeeping, legal, accounting, website development and audit functions.
During the three months ended September 30, 2007 we engaged three consultants as follows:

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On October 8, 2007 we entered into a consulting agreement with C & H Capital, Inc. for public and investor relations services for a period of twelve months. Pursuant to the consulting
agreement we issued 150,000 shares of our common stock as compensation for services.

On October 3, 2007 we entered into a consulting agreement with Internet Capital Markets Corporation for a period of one year. Internet Capital is authorized to act as a non-exclusive placement
agent. Pursuant to the consulting agreement we issued 13,000 shares of our common stock as fees for the due diligence investigation conducted by Internet Capital. We will pay a cash fee of 6% of the gross proceeds, and issue warrants to purchase a
total of 6% of the total number of shares to be purchased by any investors identified by Internet Capital.

On October 1, 2007 we entered into a consulting agreement with Jeffrey Langberg for a term of twelve months. Mr. Langberg will assist us in identifying business opportunities or potential
business acquisitions in the gasification fields, assist us in obtaining new intellectual properties or technology related to our business, assist us in marketing our products and services, and assist us in the research and development of our
technologies. Pursuant to the consulting agreement we issued 200,000 shares of our common stock as compensation for his services.

Any increase in the number of employees or consultants may significantly increase our monthly expenses. To facilitate our growth we anticipate hiring independent sales and marketing consultants.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Our financial statements are impacted by the accounting
policies used and the estimates and assumptions made by our management during their preparation. A complete summary of these policies is included in the notes to our financial statements. The following is a brief discussion of the critical
accounting policies and methods used by us.

Intangible Asset

Intangible asset consist of an integrated gasification production system. This technology combines modern gasification with gas turbine technologies to produce synthetic gas, hydrogen or
electricity. We intend to further develop the technology to make it commercially viable and intend to then sell or license the technology. The technology will be amortized on a systematic basis upon commencement of revenue from the sale or license
of the technology.

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On December 24, 2004, we purchased an integrated gasification production system from our CEO. The technology combines modern gasification with gas turbine technologies to produce synthetic gas,
hydrogen or electricity. We intend to further develop the technology to make it commercially viable and intend to then sell or license the technology. We purchased the asset by issuing 10,000,000 shares of our common stock and a $25,000 payment.
If by January 2006 we had not raised a minimum of $1,000,000 by way of equity private placements, we had the option, until June 30, 2007, of canceling 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. At September 30, 2007, the asset has been transferred to us and the 10,000,000 common shares
were released from escrow.

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.

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 October 17, 2007, we issued 150,000 shares of our common stock to C & H Capital, Inc. as compensation for public and investor relations services for one year. These shares were issued
without a prospectus pursuant to Section 4(2) of the Securities Act of 1933.

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On October 17, 2007, we issued 13,000 shares of our common stock as compensation for the due diligence investigation conducted by Internet Capital. These shares were issued without a prospectus
pursuant to Section 4(2) of the Securities Act of 1933.

On October 17, 2007, we issued 200,000 shares of our common stock to Jeffrey Langberg, a consultant, as compensation for business development services. These shares were issued without a
prospectus pursuant to Section 4(2) of the Securities Act of 1933.

Our reliance upon the exemption under Section 4(2) of the Securities Act of 1933 was based on the fact that the issuance of these shares did not involve a public offering.The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons
involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, the investors had the necessary
investment intent as required by Section 4(2) since they agreed to and received a share certificate bearing a legend stating that such shares are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these shares would
not be immediately redistributed into the market and therefore not be part of a "public offering." The investors negotiated the terms of the transactions directly with our executive officers. No general solicitation was used, no commission or other
remuneration was paid in connection with these transactions, and no underwriter participated. Based on an analysis of the above factors, these transactions were effected in reliance on the exemption from registration provided in Section 4(2) of the
Securities Act for transactions not involving any public offering.

ITEM 3. Defaults upon Senior Securities

None

ITEM 4. Submission of Matters to a Vote of Security Holders

None

ITEM 5. Other Information

None

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|ITEM 6. ExhibitsNumber Description
|----------------------------------

|10.1 | Manufacturing Agreement with I-Coda Group dated July 24, 2007 (1)                                                                                                            
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|10.2 | 0% Convertible Debenture with Jain Vansa
nt dated September 4, 2007                                                                                                          
|    
|10.3 | Consulting Agreement with C & H Capital, Inc. dated October 8, 2007                                                                                                          
|    
|10.4 | Consulting Agreement with Internet Capital Markets Corporation dated October 3, 2007                                                                                         
|    
|10.5 | Consulting Agreement with Jeffrey Langberg dated October 1, 2007                                                                                                             
|    
|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

(1) Included as an exhibit on our Form 10QSB filed August 15, 2007.



|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.



|                        
|------------------------
|                        
|Dated: November 19, 2007
|                        





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