----

----

| þ | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31,  2008 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE  ACT |
|---|-----------------------------------------------------------------------------|

| DELAWARE                                                                |   | 2992                                                              |   | 98-0543691                          |
|-------------------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|-------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (Primary      Standard IndustrialClassification      Code Number) |   | (I.R.S.      EmployerI.D.      No.) |

| Large accelerated      filer o | Accelerated filer      o                   |
|--------------------------------|--------------------------------------------|
| Non-accelerated      filer o   | Smaller reporting      company þ |

----

| PART      I.  | FINANCIAL      INFORMATION | 1                                                                                                     |
|---------------|----------------------------|-------------------------------------------------------------------------------------------------------|
|          | ITEM      1.               | FINANCIAL      INFORMATION                                                                            | 1 |
|          | ITEM      2.               | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS | 2 |
|          | ITEM      3.               | QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                       | 3 |
|          | ITEM      4.               | CONTROLS      AND PROCEDURES                                                                          | 3 |
| PART      II. | OTHER      INFORMATION     | 4                                                                                                     |
|          | ITEM      1.               | LEGAL      PROCEEDINGS                                                                                | 4 |
|          | ITEM      2.               | UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                      | 4 |
|          | ITEM      3.               | DEFAULTS UPON      SENIOR SECURITIES                                                             | 4 |
|          | ITEM      4.               | SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS                                              | 4 |
|          | ITEM      5.               | OTHER      INFORMATION                                                                                | 4 |
|          | ITEM      6.               | EXHIBITS                                                                                              | 4 |

----

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

----

| Pax      Clean Energy, Inc.                                        |   |             |     |   |           |   |
|--------------------------------------------------------------------|--------|------------------|----------|--------|----------------|--------|
| (Formerly      Pax Biofuels Inc.)                                  |   |             |     |   |           |   |
| (A      Development Stage Company)                                 |   |             |     |   |           |   |
| Balance      Sheets                                                |   |             |     |   |           |   |
| (Unaudited)                                                        |   |             |     |   |           |   |
|                                                               |   |             |     |   |           |   |
|                                                               |   | October      31, |     |   | April      30, |   |
|                                                               |   | 2008             |     |   | 2008           |   |
|                                                               |   | $                |     |   | $              |   |
|                                                               |   |             |     |   |           |   |
|                                                               |   |             |     |   |           |   |   |   |
| ASSETS                                                             |   |             |     |   |           |   |   |   |
|                                                               |   |             |     |   |           |   |   |   |
| Current      Assets                                                |   |             |     |   |           |   |   |   |
| Cash                                                               |   |             | 5        |   |           |   | 42 |   |
|                                                               |   |             | 5        |   |           |   | 42 |   |
|                                                               |   |             |     |   |           |   |   |   |
| Equipment,      net                                                |   |             | 1,351    |   |           |   | 1,675 |   |
|                                                               |   |             |     |   |           |   |   |   |
|                                                               |   |             | 1,356    |   |           |   | 1,717 |   |
|                                                               |   |             |     |   |           |   |   |   |
|                                                               |   |             |     |   |           |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' DEFICIT                         |   |             |     |   |           |   |   |   |
|                                                               |   |             |     |   |           |   |   |   |
| Current      Liabilities                                           |   |             |     |   |           |   |   |   |
| Accounts      payable and accrued liabilities                      |   |             | 67,100   |   |           |   | 30,825 |   |
| Due      to related parties                                        |   |             | 138,097  |   |           |   | 97,641 |   |
|                                                               |   |             | 205,197  |   |           |   | 128,466 |   |
|                                                               |   |             |     |   |           |   |   |   |
| STOCKHOLDERS'      DEFICIT                                         |   |             |     |   |           |   |   |   |
|                                                               |   |             |     |   |           |   |   |   |
| Common      Stock (Note 2)                                         |   |             |     |   |           |   |   |   |
| Authorized:                                                        |   |             |     |   |           |   |   |   |
| 300,000,000      common shares authorized, with a $0.001 par value |   |             |     |   |           |   |   |   |
| Issued      and oustanding:                                        |   |             |     |   |           |   |   |   |
| 211,640,000      common shares (April 30, 2008 - 214,260,000)      |   |             | 68,200   |   |           |   | 10,713 |   |
| Subscriptions      receivable                                      |   |             | -        |   |           |   | (25,261 | ) |
| Additional      paid-in capital                                    |   |             | -        |   |           |   | 70,587 |   |
| Deficit      accumulated during the development stage              |   |             | (272,041 | )      |           |   | (182,788 | ) |
|                                                               |   |             | (203,841 | )      |           |   | (126,749 | ) |
|                                                               |   |             |     |   |           |   |   |   |
|                                                               |   |             | 1,356    |   |           |   | 1,717 |   |

----

| Pax      Clean Energy, Inc.                                     |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
|-----------------------------------------------------------------|--------|---------------------------------|-------------|--------|-------------------------------|--------|-------------|---------------------|--------|--------|-------------|--------|--------|----------------------|-------------|
| (Formerly      Pax Biofuels Inc.)                               |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
| (A      Development Stage Company)                              |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
| Statements      of Operations                                   |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
| (Unaudited)                                                     |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   | Cumulative      from |        |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   | February      5,     |        |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   | 2007                 |        |
|                                                            |   | For      the three months ended |        |   | For      the six months ended |   |        | (inception)      to |   |
|                                                            |   | October      31,                |        |   | October      31,              |   |        | October      31,    |   |
|                                                            |   | 2008                            |        |   | 2007                          |   |        | 2008                |   |   | 2007        |   |   | 2008                 |        |
|                                                            |   | $                               |        |   | $                             |   |        | $                   |   |   | $           |   |   | $                    |        |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
| EXPENSES                                                        |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
|      Amortization                      |   |                            | 162         |   |                          |   | 162         |                |   |   | 324         |   |   |                 | 162         |   |   |   | 810 |   |
|      Communications                    |   |                            | -           |   |                          |   | -           |                |   |   | 22          |   |   |                 | 264         |   |   |   | 286 |   |
|      Foreign      exchange (gain) loss |   |                            | 60          |   |                          |   | 237         |                |   |   | 277         |   |   |                 | 227         |   |   |   | (174 | ) |
|      Interest      and bank charges    |   |                            | 107         |   |                          |   | 152         |                |   |   | 316         |   |   |                 | 233         |   |   |   | 916 |   |
|      Management      fees              |   |                            | 17,593      |   |                          |   | 18,888      |                |   |   | 37,093      |   |   |                 | 37,025      |   |   |   | 123,796 |   |
|      Miscellaneous                     |   |                            | 185         |   |                          |   | 98          |                |   |   | 466         |   |   |                 | 98          |   |   |   | 754 |   |
|      Office      supplies              |   |                            | -           |   |                          |   | -           |                |   |   | 197         |   |   |                 | 632         |   |   |   | 1,221 |   |
|      Printing      and reproduction    |   |                            | -           |   |                          |   | -           |                |   |   | -           |   |   |                 | -           |   |   |   | 875 |   |
|      Professional      fees            |   |                            | 33,746      |   |                          |   | 17,791      |                |   |   | 49,735      |   |   |                 | 36,080      |   |   |   | 114,471 |   |
|      Travel                            |   |                            | 1           |   |                          |   | -           |                |   |   | 823         |   |   |                 | 828         |   |   |   | 29,086 |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
| NET      LOSS                                                   |   |                            | (51,854     | )      |                          |   | (37,328     | )                   |   |   | (89,253     | )      |   |                 | (75,549     | ) |   |   | (272,041 | ) |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
| NET      LOSS PER SHARE - BASIC AND DILUTED                     |   |                            | (0.00       | )      |                          |   | (0.00       | )                   |   |   | (0.00       | )      |   |                 | (0.00       | ) |   |   |   |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |
| WEIGHTED      AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED    |   |                            | 211,924,783 |   |                          |   | 204,089,180 |                |   |   | 213,092,391 |   |   |                 | 204,089,180 |   |   |   |   |   |
|                                                            |   |                            |        |   |                          |   |        |                |   |   |        |   |   |                 |        |   |   |   |   |   |

----

| Pax      Clean Energy, Inc.                    |   |                          |    |   |                |   |    |                 |   |
|------------------------------------------------|--------|-------------------------------|---------|--------|---------------------|--------|---------|----------------------|--------|
| (Formerly      Pax Biofuels Inc.)              |   |                          |    |   |                |   |    |                 |   |
| (A      Development Stage Company)             |   |                          |    |   |                |   |    |                 |   |
| Statements      of Cash Flows                  |   |                          |    |   |                |   |    |                 |   |
| (Unaudited)                                    |   |                          |    |   |                |   |    |                 |   |
|                                           |   |                          |    |   |                |   |    |                 |   |
|                                           |   |                          |    |   |                |   |    | Cumulative      from |   |
|                                           |   |                          |    |   |                |   |    | February      5,     |   |
|                                           |   |                          |    |   |                |   |    | 2007                 |   |
|                                           |   | For      the six months ended |    |   | (inception)      to |   |
|                                           |   | October      31,              |    |   | October      31,    |   |
|                                           |   | 2008                          |    |   | 2007                |   |    | 2008                 |   |
|                                           |   | $                             |    |   | $                   |   |    | $                    |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES      |   |                          |    |   |                |   |    |                 |   |   |   |
| Net      loss                                  |   |                          | (89,253 | )      |                |   | (75,549 | )                    |   |   | (272,041 | ) |
| Non-cash      item                             |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Amortization                                   |   |                          | 324     |   |                |   | 162     |                 |   |   | 810 |   |
| Change      in non-cash working capital item   |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Accounts      payable and accrued liabilities  |   |                          | 36,275  |   |                |   | 15,320  |                 |   |   | 67,100 |   |
| Net      cash used in operating activities     |   |                          | (52,654 | )      |                |   | (60,067 | )                    |   |   | (204,131 | ) |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES      |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Share      subscriptions received              |   |                          | 12,161  |   |                |   | 33,409  |                 |   |   | 68,200 |   |
| Due      to related parties                    |   |                          | 40,456  |   |                |   | 35,156  |                 |   |   | 138,097 |   |
| Net      cash provided by financing activities |   |                          | 52,617  |   |                |   | 68,565  |                 |   |   | 206,297 |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES      |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Purchase      of equipment                     |   |                          | -       |   |                |   | (499    | )                    |   |   | (2,161 | ) |
| Net      cash used in investing activities     |   |                          | -       |   |                |   | (499    | )                    |   |   | (2,161 | ) |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| NET      INCREASE (DECREASE) IN CASH           |   |                          | (37     | )      |                |   | 7,999   |                 |   |   | 5 |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| CASH      - BEGINNING                          |   |                          | 42      |   |                |   | 23      |                 |   |   | - |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| CASH      - ENDING                             |   |                          | 5       |   |                |   | 8,022   |                 |   |   | 5 |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |
| SUPPLEMENTAL      CASH FLOW INFORMATION:       |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Cash      Paid For                             |   |                          |    |   |                |   |    |                 |   |   |   |   |
| Interest                                       |   |                          | -       |   |                |   | -       |                 |   |   | - |   |
| Income      tax                                |   |                          | -       |   |                |   | -       |                 |   |   | - |   |
|                                           |   |                          | -       |   |                |   | -       |                 |   |   | - |   |
|                                           |   |                          |    |   |                |   |    |                 |   |   |   |   |

----

| Pax      Clean Energy, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Formerly      Pax Biofuels Inc.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (A      Development Stage Company)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Notes      to the Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| October      31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| (Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Note      1.Basis      of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Nature      of Operation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| On      October 16, 2008, the Company amended its Articles of Incorporation to      change its name from "Pax      Biofuels Inc." to "Pax Clean Energy, Inc." to reflect its new business      direction.  The Company also completed      a 20 for 1 (20:1) forward stock split of its common      shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Unaudited      Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| The      accompanying unaudited interim financial statements have been prepared in      accordance with      generally accepted accounting principles for interim financial statements      and in accordance with      the rules and regulations of the Securities and Exchange      Commission.  They may not include all      information and footnotes required by generally accepted accounting      principles for complete financial      statements.  However, except as disclosed herein, there has been      no material changes in the      information disclosed in the notes to the financial statements for the      year ended April 30, 2008 included      in the Company's Form 10-K filed with the Securities and Exchange      Commission.  The unaudited      interim financial statements should be read in conjunction with those      financial statements      included in the Form 10-K.  In the opinion of Management, all      adjustments considered      necessary for a fair presentation, consisting solely of normal recurring      adjustments, have been      made.  Operating results for the six months ended October 31,      2008 are not necessarily indicative      of the results that may be expected for the year ending April 30,      2009. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Note      2.Common      Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| a)      In August 2008, the Company cancelled  2,620,000 (pre-stock      split 131,000) common shares due to non-payments from a subscriber.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| b)      On October 16, 2008, the Company completed a 20 for 1 (20:1) forward stock      split of its common shares.  All      shares and per share information have been retroactively restated for all      periods presented to give effect      to this stock split.  The Company also increased the number of      authorized shares of common stock      from 100,000,000 to 300,000,000, with par value of $0.001 per      share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

----

----

----

| Exhibit      No. |   | Description                                                                                                 |
|------------------|--------|-------------------------------------------------------------------------------------------------------------|
| 31.1             |   | Sec.      302 Certification of Principal Executive Officer, Financial Officer &      Accounting Officer |
|             |   |                                                                                                        |
| 32.1             |   | Sec.      906 Certification of Principal Executive Officer, Financial Officer &      Accounting Officer |

----

|                         |   | PAX      CLEAN ENERGY, INC.                                                                                                |
|------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------|
|                         |   |                                                                                                                       |
|                         |   |                                                                                                                       |
| Date:      December 22, 2008 | By:    | /s/      Paul Leslie Hammond                                                                                               |
|                         |   | Paul      Leslie Hammond                                                                                                   |
|                         |   | Principal      Executive Officer, Principal Financial Officer and Principal Accounting      Officer, President andDirector |

----

| Exhibit      No. |   | Description                                                                                                 |
|------------------|--------|-------------------------------------------------------------------------------------------------------------|
| 31.1             |   | Sec.      302 Certification of Principal Executive Officer, Financial Officer &      Accounting Officer |
|             |   |                                                                                                        |
| 32.1             |   | Sec.      906 Certification of Principal Executive Officer, Financial Officer &      Accounting Officer |

----