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**FORM            10-QSB**

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| **DELAWARE**                                                                      |   | **98-0543691**                                |
|-----------------------------------------------------------------------------------|--------|-----------------------------------------------|
| (State                    or other jurisdiction of incorporation or organization) |   | (I.R.S.Employer                    ID Number) |

| Large                    Accelerated Filer ྑ | Accelerated                    filer ྑ   |
|----------------------------------------------------|------------------------------------------------|
| Non-accelerated                    filer ྑ   | Smaller                    Reporting company x |

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

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**PART          I.**
**FINANCIAL          INFORMATION**

**ITEM          1.**
**Financial          Information**

**Index          to the Financials**

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

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**Pax      Biofuels Inc.**

**(A      Development Stage Company)**

**Balance      Sheets**

**(Unaudited)**

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|                                                                                                                                                                      |   | **July                31,** |     | **April                30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|----------|------------------------------|--------|
|                                                                                                                                                                      |   | **2008**                    |     | **2008**                     |   |
|                                                                                                                                                                      |   | $                           |     | $                            |   |
|                                                                                                                                                                      |   |                        |     |                         |   |
| **ASSETS**                                                                                                                                                                |   |                        |     |                         |   |   |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| Current                Assets                                                                                                                                             |   |                        |     |                         |   |   |   |
| Cash                                                                                                                                                       |   |                        | 1,568    |                         |   | 42 |   |
|                                                                                                                                                                      |   |                        | 1,568    |                         |   | 42 |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| Equipment,                net                                                                                                                    |   |                        | 1,513    |                         |   | 1,675 |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
|                                                                                                                                        |   |                        | 3,081    |                         |   | 1,717 |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' DEFICIT**                                                                                                                  |   |                        |     |                         |   |   |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| Current                Liabilities                                                                                                                                        |   |                        |     |                         |   |   |   |
| Accounts                payable and accrued liabilities                                                                                                                   |   |                        | 35,485   |                         |   | 30,825 |   |
| Due                to related parties                                                                                                                                     |   |                        | 119,583  |                         |   | 97,641 |   |
|                                                                                                                                        |   |                        | 155,068  |                         |   | 128,466 |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| **STOCKHOLDERS'                DEFICIT**                                                                                                                                  |   |                        |     |                         |   |   |   |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
| Common                Stock                                                                                                                                               |   |                        |     |                         |   |   |   |
| Authorized:                                                                                                                                                               |   |                        |     |                         |   |   |   |
| 100,000,000                common shares authorized, with a $0.001 par value Issued and oustanding:                10,713,000 common shares (April 30, 2008 - 10,713,000) |   |                        | 10,713   |                         |   | 10,713 |   |
| Subscriptions                receivable                                                                                                                                   |   |                        | (13,100  | )                            |   | (25,261 | ) |
| Additional                paid-in capital                                                                                                                                 |   |                        | 70,587   |                         |   | 70,587 |   |
| Deficit                accumulated during the development stage                                                                                                 |   |                        | (220,187 | )                            |   | (182,788 | ) |
|                                                                                                                                        |   |                        | (151,987 | )                            |   | (126,749 | ) |
|                                                                                                                                                                      |   |                        |     |                         |   |   |   |
|                                                                                                                                        |   |                        | 3,081    |                         |   | 1,717 |   |

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**Pax      Biofuels Inc.**

**(A      Development Stage Company)**

**Statements      of Operations**

**(Unaudited)**

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|                                                                       |   |                                               |       |                    |   | **Cumulative from** |   |
|----------------------------------------------------------------------------|--------|----------------------------------------------------|------------|-------------------------|--------|--------------------------|--------|
|                                                                       |   |                                               |       |                    |   | **February 5,**     |   |
|                                                                       |   |                                               |       |                    |   | **2007**                 |   |
|                                                                       |   | **For the three months ended** |       | **(inception) to** |   |
|                                                                       |   | **July 31,**                                  |       | **July 31,**       |   |
|                                                                       |   | **2008**                                           |       | **2007**                |   | **2008**                 |   |
|                                                                       |   |  $                                            |       | $                       |   | **$**                    |   |
|                                                                       |   |                                               |       |                    |   |                     |   |
| **EXPENSES**                                                               |   |                                               |       |                    |   |                     |   |   |   |   |
|                                                                       |   |                                               |       |                    |   |                     |   |   |   |   |
| Amortization                                                               |   |                                               | 162        |                    |   | -                        |   |   | 648 |   |
| Communications                                                             |   |                                               | 22         |                    |   | 264                      |   |   | 286 |   |
| Foreign                exchange (gain) loss                                |   |                                               | 217        |                    |   | (47                      | )      |   | (234 | ) |
| Interest                and bank charges                                   |   |                                               | 209        |                    |   | 81                       |   |   | 809 |   |
| Management                fees                                             |   |                                               | 19,500     |                    |   | 18,138                   |   |   | 106,203 |   |
| Miscellaneous                                                              |   |                                               | 281        |                    |   | -                        |   |   | 569 |   |
| Office                supplies                                             |   |                                               | 197        |                    |   | 632                      |   |   | 1,221 |   |
| Printing                and reproduction                                   |   |                                               | -          |                    |   | -                        |   |   | 875 |   |
| Professional                fees                                           |   |                                               | 15,989     |                    |   | 18,859                   |   |   | 80,725 |   |
| Travel                                                                     |   |                                               | 822        |                    |   | 828                      |   |   | 29,085 |   |
|                                                                       |   |                                               |       |                    |   |                     |   |   |   |   |
| **NET                LOSS**                                                |   |                                               | (37,399    | )                       |   | (38,755                  | )      |   | (220,187 | ) |
|                                                                       |   |                                               |       |                    |   |                     |   |   |   |   |
| **NET                LOSS PER SHARE - BASIC AND DILUTED**                  |   |                                               | (0.00      | )                       |   | (0.00                    | )      |   |  |   |
|                                                                       |   |                                               |       |                    |   |                     |   |   |   |   |
| **WEIGHTED                AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED** |   |                                               | 10,713,000 |                    |   | 10,204,459               |   |   |  |   |

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**Pax      Biofuels Inc.**

**(A      Development Stage Company)**

**Statements      of Cash Flows**

**(Unaudited)**

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|                                                                       |   |                                               |    |                    |   | **Cumulative from** |   |
|----------------------------------------------------------------------------|--------|----------------------------------------------------|---------|-------------------------|--------|--------------------------|--------|
|                                                                       |   |                                               |    |                    |   | **February 5,**     |   |
|                                                                       |   |                                               |    |                    |   | **2007**                 |   |
|                                                                       |   | **For the three months ended** |    | **(inception) to** |   |
|                                                                       |   | **July 31,**                                  |    | **July 31,**       |   |
|                                                                       |   | **2008**                                           |    | **2007**                |   | **2008**                 |   |
|                                              |   |  $                                            |    | $                       |   | **$**                    |   |
|                                                                       |   |                                               |    |                    |   |                     |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                    |   |                                               |    |                    |   |                     |   |   |   |   |
| Net                loss                                                    |   |                                               | (37,399 | )                       |   | (38,755                  | )      |   | (220,187 | ) |
| Non-cash                item:                                              |   |                                               |    |                    |   |                     |   |   |   |   |
| Amortization                                                               |   |                                               | 162     |                    |   | -                        |   |   | 648 |   |
| Change                in non-cash working capital item:                    |   |                                               |    |                    |   |                     |   |   | - |   |
| Accounts                payable and accrued liabilities                    |   |                                               | 4,660   |                    |   | 2,839                    |   |   | 35,485 |   |
| Net                cash used in operating activities             |   |                                               | (32,577 | )                       |   | (35,916                  | )      |   | (184,054 | ) |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                    |   |                                               |    |                    |   |                     |   |   |   |   |
| Share                subscriptions received                                |   |                                               | 12,161  |                    |   | 19,482                   |   |   | 68,200 |   |
| Due                to related parties                       |   |                                               | 21,942  |                    |   | 18,698                   |   |   | 119,583 |   |
| Net                cash provided by financing activities         |   |                                               | 34,103  |                    |   | 38,180                   |   |   | 187,783 |   |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                    |   |                                               |    |                    |   |                     |   |   |   |   |
| Purchase                of equipment                        |   |                                               | -       |                    |   | (500                     | )      |   | (2,161 | ) |
| Net                cash used in investing activities             |   |                                               | -       |                    |   | (500                     | )      |   | (2,161 | ) |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| **NET                INCREASE IN CASH**                                    |   |                                               | 1,526   |                    |   | 1,764                    |   |   | 1,568 |   |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| **CASH                - BEGINNING**                         |   |                                               | 42      |                    |   | 23                       |   |   | - |   |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| **CASH                - ENDING**                       |   |                                               | 1,568   |                    |   | 1,787                    |   |   | 1,568 |   |
|                                                                       |   |                                               |    |                    |   |                     |   |   |   |   |
| Supplemental                cash flow information                          |   |                                               |    |                    |   |                     |   |   |   |   |
| Cash                Paid For:                                              |   |                                               |    |                    |   |                     |   |   |   |   |
| Interest                                                                   |   |                                               | -       |                    |   | -                        |   |   | - |   |
| Income                tax                              |   |                                               | -       |                    |   | -                        |   |   | - |   |
|                                                                       |   |                                               | -       |                    |   | -                        |   |   | - |   |

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**Pax      Biofuels Inc.**

**(A      Development Stage Company)**

**Notes      to the Financial Statements**

**July      31, 2008**

**(Unaudited)**

**Note      1. Basis of Presentation**

*Unaudited      Interim Financial Statements*

**Note      2. Subsequent Event**

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**ITEM      2.**
**MANAGEMENT’S      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

***Overview***

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***Liquidity      and Capital Resources***

**Results      of Operations for the Three-Month Periods Ended July 31, 2008 and      2007.**

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**Off-Balance      Sheet Arrangements**

**Tabular      Disclosure of Contractual Obligations**

**ITEM      3.**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4.**
**CONTROLS      AND PROCEDURES**

***(a)      Evaluation of Disclosure Controls and Procedures***

***(b)      Changes in Internal Control Over Financial Reporting***

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**PART      II.**
**OTHER      INFORMATION**

**ITEM      1.**
**LEGAL      PROCEEDINGS**

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

**ITEM      3.**
**DEFAULT      UPON SENIOR SECURITIES**

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

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**ITEM      5.**
**OTHER      INFORMATION**

**ITEM      6.**
**EXHIBITS**

| **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 |

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**SIGNATURES**

|                                          |      | **PAX                BIOFUELS INC.**                                                                                                            |
|-----------------------------------------------|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|  Date:                September 15, 2008 |  By: |  /s/                Paul Leslie Hammond                                                                                                    |
|                                          |      | Paul                Leslie Hammond                                                                                                              |
|                                          |      | Principal                Executive Officer, Principal Financial Officer and Principal Accounting                Officer, President and Director |

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**EXHIBIT      INDEX**

| **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 |

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