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

Form 10-QSB



|ý | Quarterly report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2006                   
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|q | Transition report pursuant section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ________________ to ________________
|  | Commission file number 000-50907                                                                                                                         

PURE BIOFUELS CORP.



|Nevada 
(State of Incorporation)                                                                                                                                                                                     | 47-0930829
(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------
|Suite 203 - 910 Richards Street, Vancouver, British Columbia, Canada V6B 3C1
Telephone No.: (778) 895-3595(Address and telephone number of Registrant's principal
executive offices and principal place of business)
|Calle Los eucharis 150, Dpto 201, Monterrico, Surco, Lima 33 Peru(Former address, 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 required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý
    No q

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

As of November 17, 2006, the Company had 61,727,421 outstanding shares of common stock.

Transitional Small Business Disclosure Format (Check one):  Yes q
   No ý



1

---



PART I - FINANCIAL INFORMATION



Pure Biofuels Corp.(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
(Unaudited)

September 30, 2006



|                                                 | Index
|------------------------------------------------ | -----
|Consolidated Balance Sheets                      | F - 1
|Consolidated Statement of Operations             | F - 2
|Consolidated Statement of Stockholders' Equity   | F - 3
|Consolidated Statement of Cash Flows             | F - 4
|Notes to
		the Consolidated Financial Statements | F - 5





















---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets



|                                                          |  |  | September 30,
		2006 | January 31,
		2006
|--------------------------------------------------------- |  |  | -------------------- | ------------------
|                                                          |  |  | (Unaudited)          | (Note 2(a))       
|                                                          |  |  |                      |                   
|ASSETS                                                    |  |  |                      |                   
|Current
		Assets                                          |  |  |                      |                   
|Cash                                                      |  |  | $  4,572,124         | $        16,682   
|Receivables                                               |  |  | 136,837              | 1,415             
|Prepaid
		expenses                                        |  |  | 1,800                | -                 
|                                                          |  |  | 4,710,761            | 18,097            
|Property and Equipment (Note 1)                           |  |  | -                    | 5,704             
|Intangible Assets (Note 1)                                |  |  | -                    | 401               
|License Agreement (Note 5(g))                             |  |  | 720,000              | -                 
|Total
		Assets                                            |  |  | $  5,430,761         | $        24,202   
|                                                          |  |  |                      |                   
|LIABILITIES AND STOCKHOLDERS' EQUITY                      |  |  |                      |                   
|Current
		Liabilities                                     |  |  |                      |                   
|Accounts payable
		and accrued liabilities                |  |  | $  1,007,008         | $        52,810   
|Due to
		related party (Note 4)                           |  |  | 230,000              | 12,532            
|Total
		Liabilities                                       |  |  | 1,237,008            | 65,342            
|                                                          |  |  |                      |                   
|Stockholders' Equity                                      |  |  |                      |                   
|Common stock (Note
		6)                                   |  |  |                      |                   
|Authorized: 93,750,000 shares, par value $0.001           |  |  |                      |                   
|Issued: 55,031,228 shares (January 31, 2006 - 68,943,425) |  |  | 30,304               | 55,155            
|Additional
		paid-in capital                              |  |  | 1,601,459            | (45,562)          
|Donated
		capital                                         |  |  | -                    | 32,500            
|Accumulated other comprehensive income                    |  |  | -                    | 2,222             
|Stock
		subscriptions received in advance (Note 6)        |  |  | 3,052,723            | -                 
|Deficit
		accumulated during the development stage        |  |  | (490,733)            | (85,455)          
|Total
		Stockholders' Equity                              |  |  | 4,193,753            | 41,140            
|Total
		Liabilities and Stockholders' Equity              |  |  | $  5,430,761         | $        24,202   
|                                                          |  |  |                      |                   
|                                                          |  |  |                      |                   
|                                                          |  |  |                      |                   





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

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Consolidated Statement of Operations
(Unaudited)

|                                                                    |  |  | For the period from
		May 10, 2006
		(Date of Inception)
		to September 30,
		2006
|------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------
|                                                                    |  |  |                                                                                   
|                                                                    |  |  |                                                                                   
|Operating Expenses                                                  |  |  |                                                                                   
|                                                                    |  |  |                                                                                   
|Consulting fees                                                     |  |  | $      359,000                                                                    
|General and administrative                                          |  |  | 16,734                                                                            
|Professional fees                                                   |  |  | 15,365                                                                            
|Travel                                                              |  |  | 56,473                                                                            
|Wages                                                               |  |  | 43,161                                                                            
|Net Loss                                                            |  |  | $     (490,733)                                                                   
|Net Loss Per Share - Basic and Diluted                              |  |  | $           (0.02)                                                                
|Weighted
		Average Number of Shares Outstanding - Basic and Diluted |  |  | 32,626,000                                                                        
|                                                                    |  |  |                                                                                   















































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

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity



|                                                        | Number of
		Common
		Shares | Amount      | Additional
		Paid-in
		Capital | Subscriptions
		Received in 
		Advance | Deficit
		Accumulated
		During the
		Development
		Stage | Total          
|------------------------------------------------------- | --------------------------- | ----------- | ------------------------------ | -------------------------------------- | -------------------------------------------------------- | ---------------
|Balance - January 31, 2006                              | 68,943,425                  | $         - | $           -                  | $             -                        | $             -                                          | $             -
|                                                        |                             |             |                                |                                        |                                                          |                
|Return and cancellation of stock
		issued (Note 1)      | (43,912,167)                | -           | -                              | -                                      | -                                                        | -              
|                                                        |                             |             |                                |                                        |                                                          |                
|Initial recapitalization of Peru SAC (Note 3)           | -                           | 304         | -                              | -                                      | -                                                        | 304            
|Issuance
		of common stock on recapitalization (Note 3) | 29,999,970                  | 30,000      | 1,601,459                      | -                                      | -                                                        | 1,631,459      
|Subscriptions received                                  | -                           | -           | -                              | 3,052,723                              | -                                                        | 3,052,723      
|Net loss
		for the period                               | -                           | -           | -                              | -                                      | (490,733)                                                | (490,733)      
|Balance -
		September 30, 2006                          | 55,031,228                  | $ 30,304    | $ 1,601,459                    | $ 3,052,723                            | $ (490,733)                                              | $ 4,193,753    
|                                                        |                             |             |                                |                                        |                                                          |                
|                                                        |                             |             |                                |                                        |                                                          |                

Effective
August 7, 2006, the Company effected a one and one-quarter (1.25) for one (1)
forward stock split of the authorized, issued and outstanding common stock,
without a change to the par value (Note 6). All share amounts have been
retroactively adjusted for all periods presented.























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

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Consolidated Statement of Cash Flows
(Unaudited)



|                                                                                                                                                                                                                        |  |  | From
		May 10, 2006 (Date of Inception)
		to September 30,
		2006
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | -----------------------------------------------------------------
|                                                                                                                                                                                                                        |  |  |                                                                  
|Cash Flows From Operating Activities                                                                                                                                                                                    |  |  |                                                                  
|Net Loss                                                                                                                                                                                                                |  |  | $  (490,733)                                                     
|Changes in
		operating assets and liabilities                                                                                                                                                                           |  |  |                                                                  
|Receivables                                                                                                                                                                                                             |  |  | (37)                                                             
|Prepaid expenses                                                                                                                                                                                                        |  |  | (1,800)                                                          
|Accounts payable and accrued
		liabilities                                                                                                                                                                              |  |  | (30,535)                                                         
|Due to related party                                                                                                                                                                                                    |  |  | 230,000                                                          
|Net Cash
		Used In Operating Activities                                                                                                                                                                                 |  |  | (293,105)                                                        
|Cash Flows
		From Investing Activities                                                                                                                                                                                  |  |  |                                                                  
|Net cash acquired
		on acquisition (Note 3)                                                                                                                                                                             |  |  | 1,812,202                                                        
|Net Cash
		Provided by Investing Activities                                                                                                                                                                             |  |  | 1,812,202                                                        
|Cash Flows
		From Financing Activities                                                                                                                                                                                  |  |  |                                                                  
|Issuance of
		capital stock                                                                                                                                                                                             |  |  | 304                                                              
|Stock subscriptions received in
		advance                                                                                                                                                                               |  |  | 3,052,723                                                        
|Net Cash
		Provided by Financing Activities                                                                                                                                                                             |  |  | 3,053,027                                                        
|Net
		Increase in Cash                                                                                                                                                                                                  |  |  | 4,572,124                                                        
|Cash -
		Beginning                                                                                                                                                                                                      |  |  | -                                                                
|Cash -
		Ending                                                                                                                                                                                                         |  |  | $  4,572,124                                                     
|                                                                                                                                                                                                                        |  |  |                                                                  
|                                                                                                                                                                                                                        |  |  |                                                                  
|Supplemental Disclosure of Cash Flow
		Information:
		The
		Company accrued $856,800 for a License Agreement (Note 5(g)) which has
		been recorded as License Agreement of $720,000 and taxes receivable of
		$136,800. |  |  |                                                                  
|Interest
		paid                                                                                                                                                                                                         |  |  | $                -                                               
|Income taxes paid                                                                                                                                                                                                       |  |  | $                -                                               
|                                                                                                                                                                                                                        |  |  |                                                                  







The accompanying
notes are an integral part of these consolidated financial statements
F-4

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

1.   Nature of Operations and Continuance of Business

Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc., herein the "Company") was incorporated in
the State of Nevada on October 2, 2003 under the name Metasun Enterprises, Inc.
Pursuant to a share exchange agreement ("Share Exchange Agreement") dated July
26, 2006, the Company acquired 99.9% of the issued and outstanding common stock
of Pure Biofuels del Peru SAC ("Peru SAC"), a private Peruvian corporation, in
consideration for the issuance of 29,999,970 common shares. As of the closing
date, the former shareholders of Peru SAC held approximately 55% of the issued
and outstanding common shares of the Company. The acquisition of Peru SAC,
therefore, was recorded as a reverse acquisition for accounting purposes. Peru
SAC was incorporated on May 10, 2006 under the laws of Peru. In accordance with
the provisions governing the accounting for reverse acquisitions, the financial
statements are presented as a continuation of Peru SAC and include the results
of operations of Peru SAC since incorporation on May 10, 2006, and the results
of operations of the Company since the date of acquisition on September 15,
2006.

The Company
previously focused its business efforts on the development of software
specializing in web applications using MicrosoftTM technologies. In
contemplation of the share exchange transaction with Peru SAC, the Company
abandoned its original business plan and sold its' investment in its previous
subsidiary, Metasun Software Corp. ("Metasun"), and the related software
business to two former shareholders in consideration for the cancellation of all
shares of the Company's' common stock previously owned by them and the waiver
and forgiveness of any outstanding amounts owed by the Company to them.  As of
the closing date of the Share Exchange Agreement, the Company commenced the
business of the production, marketing and sale of clean burning biofuels
focusing on Latin America. The Company's shares trade on the NASD OTC Bulletin
Board under the symbol 'PBOF'.

On August 7, 2006,
the Company completed a merger with its wholly-owned subsidiary, Pure Biofuels
Corp., which was incorporated solely to effect the name change. As a result, the
Company changed its name from "Metasun Enterprises, Inc." to Pure Biofuels Corp.
In addition, effective August 7, 2006, the Company effected a one and
one-quarter (1.25) for one (1) forward stock split of the authorized, issued and
outstanding common stock. As a result, the authorized share capital increased
from 75,000,000 share of common stock with a par value of $0.001 to 93,750,000
shares of common stock with a par value of $0.001. All share amounts have been
retroactively adjusted for all periods presented. During the period, the Company
also changed its fiscal year-end from January 31 to December 31.

The Company is in
the development stage and planned principal activities have commenced, but the
Company has not generated or sustained significant revenue. In a development
stage company, management devotes most of its activities to developing a market
for its products and services. These financial statements have been prepared on
a going concern basis, which implies the Company will continue to realize its
assets and discharge its liabilities in the normal course of business. The
Company is unlikely to pay dividends or generate significant earnings in the
immediate or foreseeable future. The continuation of the Company as a going
concern and the ability of the Company to emerge from the development stage is
dependent upon the continued financial support from its shareholders, the
ability of the Company to obtain necessary equity financing to continue
operations and to generate sustainable significant revenue. There is no
guarantee that the Company will be able to raise adequate equity financing or
generate profitable operations. As at September 30, 2006, the Company has
working capital of $3,473,753 and has accumulated losses of $490,733 since
inception. These financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification
of liabilities that might be necessary should the Company be unable to continue
as a going concern.

Unaudited
Interim Financial Statements

The accompanying
unaudited consolidated interim financial statements have been prepared in
accordance with generally accepted accounting principles in the United States
("US GAAP") for interim financial information and with the instructions to Form
10-QSB of Regulation S-B. They may not include all information and footnotes
required by US GAAP for complete financial statements. The consolidated interim
unaudited financial statements should be read in conjunction with those
financial statements included in the Form 10-KSB. 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
period ended September 30, 2006, are not necessarily indicative of the results
that may be expected for the year ending December 31, 2006.

2.   Summary of Significant Accounting Principles

a)   Basis of Presentation

These consolidated
financial statements include the accounts of the Company and its subsidiary,
Peru SAC. All significant intercompany transactions and balances have been
eliminated. The Company is a development stage

F-5

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

2.   Summary of Significant Accounting Principles (continued)

a)   Basis of Presentation (continued)

company as defined
by Statement of Financial Accounting Standard ("SFAS") No. 7, "Accounting and
Reporting for Development Stage Enterprises". The Company's fiscal year end
is December 31. The balance sheet of Metasun has been presented as at January
31, 2006. However, the consolidated statements of operations and cash flows only
represent the Company's transactions from May 10, 2006 (Date of Inception) to
September 30, 2006 as there are no comparative figures.

b)   Use of Estimates

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. Actual results could
differ from those estimates.

c)   Financial Instruments/Concentrations

The fair value of
financial instruments which include cash, receivables, accounts payable and
accrued liabilities, and due to a related party were estimated to approximate
their carrying value due to the immediate or relatively short maturity of these
instruments. The Company's operations are in Peru and virtually all of its
assets and liabilities are giving rise to market risks from changes in foreign
currency rates. The financial risk is the risk to the Company's operations that
arise from fluctuations in foreign exchange rates and the degree of volatility
of these rates. Currently, the Company does not use derivative instruments to
reduce its exposure to foreign currency risk.

d)   Income Taxes

Income taxes are
provided based upon the liability method of accounting in accordance with SFAS
No. 109, "Accounting for Income Taxes". Pursuant to SFAS No. 109 the
Company is required to compute deferred income tax assets for net operating
losses carried forward. The potential benefits of net operating losses have not
been recognized in these financial statements because the Company cannot be
assured it is more likely than not it will utilize the net operating losses
carried forward in future years.

e)   Basic and Diluted Net Loss per Share

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

f)    Stock-based Compensation

The Company
records stock-based compensation in accordance with SFAS No. 123R "Share
Based Payments", using the fair value method. As of September 30, 2006, the
Company has no stock option plan and has not granted any stock options or
recorded any stock-based compensation since inception.

g)   Recent Accounting Pronouncements

In September 2006,
the Financial Accounting Standards Board ("FASB") issued SFAS No. 158, "Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans - an
amendment of FASB Statements No. 87, 88, 106, and 132(R)". This statement
requires employers to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization.  This statement also requires an employer to
measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The provisions of SFAS No. 158 are
effective for employers with publicly traded equity securities as of the end of
the fiscal year ending after December 15, 2006. The adoption of this statement
will not have a material effect on the Company's future reported financial
position or results of operations.

F-6

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

2.   Summary of Significant Accounting Principles (continued)

g)   Recent Accounting Pronouncements (continued)

In September 2006,
the FASB issued SFAS No. 157, "Fair Value Measurements". The objective of
SFAS No. 157 is to increase consistency and comparability in fair value
measurements and to expand disclosures about fair value measurements.  SFAS No.
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 applies under other accounting pronouncements
that require or permit fair value measurements and does not require any new fair
value measurements. The provisions of SFAS No. 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007. The
adoption of this statement is not expected to have a material effect on the
Company's future reported financial position or results of operations.

In June 2006, the
FASB issued FASB Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statements No. 109". FIN 48 clarifies the
accounting for uncertainty in income taxes by prescribing a two-step method of
first evaluating whether a tax position has met a more likely than not
recognition threshold and second, measuring that tax position to determine the
amount of benefit to be recognized in the financial statements. FIN 48 provides
guidance on the presentation of such positions within a classified statement of
financial position as well as on derecognition, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The adoption of this
statement will not have a material effect on the Company's future reported
financial position or results of operations.

3.      Recapitalization Translation

On July 26, 2006,
the Company entered into a Share Exchange Agreement, among the Company, Peru
SAC, and the former stockholders of Peru SAC in which the Company acquired 99.9%
of the issued and outstanding shares of Peru SAC. The Share Exchange Agreement
occurred on September 15, 2006 (Date of Acquisition).  In accordance with the
Share Exchange Agreement, the Company issued 29,999,970 shares of the Company's
common stock to the former stockholders of Peru SAC for 99.9% of the 1,000
issued and outstanding common shares of Peru SAC on the basis of 30,030 common
shares of the Company for every one common share of Peru SAC.

The acquisition was
accounted for using the purchase method of accounting as applicable to reverse
acquisitions, as the former stockholders of Peru SAC controlled approximately
55% of the issued and outstanding shares of the Company on completion of the
transaction.  The share exchange is deemed to be a reverse acquisition for
accounting purposes.  Peru SAC, the acquired entity, is regarded as the
predecessor entity as of the Date of Acquisition. The post-acquisition entity is
accounted for as a recapitalization of Peru SAC.  The value assigned to the
common shares was valued based on the fair value of net assets of the Company at
the recapitalization date which approximated a carryover basis of $1,631,459.

The purchase price was allocated to the
following assets and liabilities:



|Cash                                                    | $ | 1,812,202
|------------------------------------------------------- | - | ---------
|Accounts
		payable and accrued liabilities              |   | (180,743)
|                                                        |   |          
|Paid by issuance
		of 29,999,970 shares of common stock | $ | 1,631,459

The consolidated
statements of operations and cash flows for the period from May 10, 2006 (Date
of Inception) to September 30, 2006, include the results of operations of Peru
SAC and the Company's results of operations from September 15, 2006 (Date of
Acquisition) to September 30, 2006. The equity amounts are those of Peru SAC,
however, the number of shares issued and outstanding at September 30, 2006, are
the Company's.

4.   Related Party Transactions

The Company entered into the following
transactions with related parties from May 10, 2006 (Date of Inception) to
September 30, 2006:

a)   Accrued consulting fees of $230,000 for services provided by the President
of the Company.

b)   Accrued a consulting fee bonus of $100,000 to a director of the Company.

c)   Accrued consulting fees of $4,500 and consulting fee bonuses of $6,500 for
services provided by directors of the Company (Note 5(c) and (d)).

F-7

---



Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

4.   Related Party Transactions (continued)

d)   Accrued wages of $15,000 to the President and an employee related to the
President of the Company (Note 5(e) and (f)).

Included in accounts payable and
accrued liabilities at September 30, 2006 is $125,000 owing to directors, the
President and an employee related to the President of the Company.

These transactions were recorded at the
exchange amount which is the amount agreed to by the related parties.

5.   Commitments

On September 15, 2006, the Company
entered into the following consulting agreements, all of which are cancellable
within 28 days written notice, with:

a)   A consultant to provide investor relations services. Under the terms of the
agreement, the Company agreed to pay $3,000 per month for an initial term of
three years, and at the election of the Company, can be renewed for one or more
additional one-year terms. The Company agreed to pay a one time signing bonus of
$7,500. During the period ended September 30, 2006, consulting fees of $1,500
were incurred.

b)   Another consultant to provide investor relations services. Under the terms
of the agreement, the Company agreed to pay $3,000 per month for an initial term
of three years, and at the election of the Company, can be renewed for one or
more additional one-year terms. The Company agreed to pay a one time signing
bonus of $7,500. During the period ended September 30, 2006, consulting fees of
$1,500 were incurred.

c)   A director to provide management services. Under the terms of the
agreement, the Company agreed to pay $7,000 per month for an initial term of
three years, and at the election of the Company, can be renewed for one or more
additional one-year terms. The Company agreed to pay a one time signing bonus of
$3,500. During the period ended September 30, 2006, consulting fees of $3,500
were incurred.

d)   A director to provide bookkeeping and accounting services to the Company.
Under the terms of the agreement, the Company agreed to pay $2,000 per month for
an initial term of three years, and at the election of the Company, can be
renewed for one or more additional one-year terms. The Company agreed to pay a
one time signing bonus of $3,000. During the period ended September 30, 2006,
consulting fees of $1,000 were incurred.

The Company also entered into the
following agreements during the period ended September 30, 2006:

e)   On September 1, 2006, the Company entered into an employment agreement with
the President of the Company. Under the terms of the agreement, the Company
agreed to pay $10,000 per month for an indefinite term. During the period ended
September 30, 2006, wages of $10,000 were incurred.

f)
   On September 1, 2006, the Company entered into an employment agreement with
an employee related to the President of the Company. Under the terms of the
agreement, the Company agreed to pay $5,000 per month for an indefinite term.
During the period ended September 30, 2006, wages of $5,000 were incurred.

g)   On September 4, 2006, Peru SAC entered into a technology license agreement
(the "License Agreement") with Capricorn Del Peru SAC ("Capricorn") of Lima,
Peru, who licensed the technology to construct a biodiesel refinery in Callao. 
Capricorn will provide the design, schematics and operational parameters
(temperature, pressure, residence time, flow and control) for the construction
of the refinery.  Under the agreement, the Company is required to pay Capricorn
a total of $1,200,000 plus general sales tax, of which $360,000 is payable upon
execution of the agreement, $360,000 is payable within 30 days of execution of
the agreement, and $480,000 is payable upon delivery of the designs. As of
September 30, 2006, the Company accrued $856,800 relating to the License
Agreement (Note 7(j)).

h)   On September 7, 2006, Peru SAC entered into a CDM emission reductions
purchase agreement with Ecosecurities Group PLC, who has agreed to (i) work with
the Company to obtain a Clean Development Mechanism (CDM) approved by the
European Trading Scheme and (ii) buy 100% of the Certified Emission Reduction
credits generated by the Company's refinery, when constructed and in operation.

i)   
On September 29, 2006, Peru SAC entered into an engineering services contract
with Polindustria S.A. ("Polindustria") of Lima, Peru, who will develop the
concepts, designs, installation and construction of the Company's biodiesel
refinery.  Under the agreement, the Company is required to pay Polindustria
$120,000 plus applicable taxes, upon the completion of certain stages over 100
days (Note 7(i)).

F-8

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Pure Biofuels Corp.
(formerly Metasun Enterprises, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
(Unaudited)

6.   Capital Stock

a)
  Effective August 7, 2006, the Company effected a one and one-quarter (1.25)
for one (1) forward stock split of the authorized, issued and outstanding common
stock, without a change to the par value. As a result, the authorized share
capital increased from 75,000,000 share of common stock with a par value of
$0.001 to 93,750,000 shares of common stock with a par value of $0.001.

b)   On September 15, 2006, the Company issued 29,999,970 common shares to the
former shareholders of Peru SAC   pursuant to a Share Exchange Agreement entered
into on July 26, 2006. Refer to Note 3.

c)   In September, 2006, the Company received proceeds of $4,864,708 in respect
of stock subscriptions for 6,269,527 units of at a price of $0.75 per share, as
per a private placement (Note 7(a)). Of the proceeds received, $1,811,985 was
received prior to the Date of Acquisition and applied against the purchase price
set forth in the Share Exchange Agreement (Note 3).

7.   Subsequent Events

Subsequent to
September 30, 2006, the Company entered into the following transactions:

a)   The Company completed a private placement of 6,269,527 units at an issue
price of $0.75 per unit for total proceeds of $4,702,145. Of the total proceeds
received, $4,864,708 was received prior to September 30, 2006 of which $162,711
was returned to certain ineligible subscribers and a further $148 is still
receivable. Each unit consists of one common share and one-half common share
purchase warrant. Each whole warrant entitles the holder to purchase one common
share in the capital of the Company for a period of one year at a price of
$1.50. In conjunction with the private placement, the Company paid a finder's
fee of $195,000.

b)   On October 1, 2006, Peru SAC entered into a lease for premises in Lima,
Peru.  Under the terms of the lease, the Company is required to make monthly
payments of $4,000 until September 2009.

c)   On October 10, 2006, the Company entered into a lease for premises in
Vancouver, British Columbia.  Under the terms of the lease, the Company is
required to make monthly payments of $2,800 until October 2008.

d)   On October 12, 2006, Peru SAC entered into a commercial distribution
agreement with Ocean Marine S.A.C. of Peru, who has agreed to distribute and
purchase the biodiesel product that the Company will produce when the refinery
is constructed.

e)   On November 1, 2006, the Company approved a stock option plan (the "Plan")
that enables it to grant options to employees, including officers and directors
of the Company, its subsidiaries and other individuals who contribute to the
success of the Company. The board of directors will administer the Plan whereby
it may, from time to time, grant up to a total of 18,000,000 stock options. The
stock options granted under the Plan shall vest and become exercisable at such
time and such terms as the board of directors may determine at the time of the
grant of the options.

f)    The Company completed a private placement of 426,666 units at an issue
price of $0.75 per unit for total proceeds of $320,000. Each unit consists of
one common share and one-half common share purchase warrant. Each whole warrant
entitles the holder to purchase one common share in the capital of the Company
for a period of one year at a price of $1.50.

g)   The Company incorporated a Peruvian subsidiary, Palma Industrial S.A.C.
("Palma") to plant oil bearing crops to be processed at the Company's biodiesel
refinery when it is constructed.

h)   The Company entered into a memorandum of understanding with Conapal,
Conferederacion Nacional de Palma, who will provide the Company with a supply of
oil bearing crops when required.

i)   
The Company paid $71,400 to Polindustria, comprised of $60,000 in payments and
$11,400 in taxes, under the terms of the engineering services contract (Note
5(i)).

j)    The Company paid $856,800 to Capricorn, under the terms of the License
Agreement, comprised of $720,000 in payments and $136,800 in taxes (Note 5(g)).

F-9

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Item 2.  Management's
Discussion and Analysis or Plan of Operation

Forward
Looking Statements

The following
discussion and analysis of our financial condition and results of operations
should be read in conjunction with the financial statements and accompanying
notes and the other financial information appearing elsewhere in this report. 
The information in this discussion contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). These forward-looking statements involve risks and uncertainties,
including statements regarding the Company's capital needs, business strategy
and expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may",
"will", "should", "expect", "plan", "intend", "anticipate", "hope", "believe",
"estimate", "predict", "potential" or "continue", the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks outlined below, and, from time to time, in other reports the Company files
with the SEC. These factors may cause the Company's actual results to differ
materially from any forward-looking statement. The Company disclaims any
obligation to publicly update these statements, or disclose any difference
between its actual results and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.

OVERVIEW

Corporate
History

We were
incorporated pursuant to the laws of the State of Nevada on October 2, 2003 and
commenced operations commensurate with the acquisition of Metasun Software Corp.
on November 30, 2003.  We acquired Metasun Software Corp. from Chad DeGroot, our
former president, by issuing a $10,000 promissory note, at the rate of prime
plus 2% and due on demand.  The acquisition was accounted for as a reverse
takeover.  Effective January 12, 2005, our issued and outstanding common shares
were split on a 5.332687957 for one (1) basis.  Effective August 7, 2006, we
effected a one and one-quarter (1.25) for one (1) forward stock split of our
authorized, issued and outstanding common stock.  In addition, effective August
7, 2006, we completed a merger with our subsidiary, Pure Biofuels Corp., which
we incorporated solely to effect a change of name from "Metasun Enterprises,
Inc." to "Pure Biofuels Corp.", after we entered into a share exchange agreement
dated July 26, 2006, as amended August 31, 2006, with Pure Biofuels del Peru SAC
("Pure Biofuels Peru"), the shareholders of Pure Biofuels Peru and Luis Goyzueta. 
Also on September 15, 2006, we changed our fiscal year end from January 31 to
December 31.

According to
the closing of the share exchange agreement on September 15, 2006, we issued
29,999,970 common shares to the former shareholders of Pure Biofuels Peru in
exchange for our acquisition of 999, or 99.9%, of the issued and outstanding
common shares of Pure Biofuels Peru on the basis of 30,030 common shares of our
company for every one common share of Pure Biofuels Peru.  The acquisition of
Pure Biofuels Peru is deemed to be a reverse acquisition for accounting
purposes. Pure Biofuels Peru, the acquired entity, is regarded as the
predecessor entity as of September 15, 2006.  Also on September 15, 2006, we
entered into a share purchase agreement with Chad DeGroot and Alastair
Anderson.  We sold all of the issued and outstanding shares of Metasun Software
Corp., a wholly-owned subsidiary of our company, to Chad DeGroot and Alastair
Anderson and in consideration Chad DeGroot tendered 27,145,710 pre-split common
shares for cancellation and Alastair Anderson tendered 7,984,033 pre-split
common shares for cancellation, being all of the common shares in the capital of
our company held by such individuals, and the waiver and forgiveness of any
outstanding amounts owed by our company to such individuals.

12

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On October 18,
2006, we issued 6,269,527 units to 97 investors at an issue price of $0.75 per
unit for total proceeds of $4,702,145.25 in accordance with the terms of private
placement agreements. We issued the 6,269,527 units in reliance upon Regulation
S and/or Section 4(2) of the Securities Act of 1933 in an offshore transaction
to non-U.S. Persons (as that term is defined in Regulation S under the
Securities Act of 1933). Each unit consists of one common share in the capital
of our company and one-half of one common share purchase warrant.  Each whole
warrant entitles the holder thereof to purchase one common share in the capital
of our company for a period of one year at a price of $1.50.

On November
10, 2006, we issued 426,666 units to 2 investors at an issue price of $0.75 per
unit for total proceeds of $320,000 in accordance with the terms of private
placement agreements.  We issued the 426,666 units in reliance upon Regulation S
and/or Section 4(2) of the Securities Act of 1933 in an offshore transaction to
non-U.S. Persons (as that term is defined in Regulation S under the Securities
Act of 1933).  Each unit consists of one common share in the capital of our
company and one-half of one common share purchase warrant.  Each whole warrant
entitles the holder thereof to purchase one common share in the capital of our
company for a period of one year at a price of $1.50.

Business Overview

Since our
incorporation, our principal business was in developing software specializing in
web applications using MicrosoftTM technologies.  Our only software
product was MetaTraffic, a website statistics program designed specifically for
ASP based websites.  In addition, we provided website maintenance and server
administration services.  We were not financially successful in implementing our
business plan as a software development business and were not able to generate
sustained or significant revenues.

Subsequent to
the acquisition of Pure Biofuels Peru on September 15, 2006, we abandoned our
previous business plan and we commenced the business of assembling and managing
a portfolio of clean fuel (ethanol, biodiesel and gas-to-liquid) assets, through
Pure Biofuels Peru.  Our business strategy is to generate revenues through the
production, processing and distribution of biodiesel as an alternative fuel for
freight and transportation fleets, marine, farming, rail and aviation
industries, and other industrial uses.

Biodiesel is a
safe, non-toxic, renewable fuel derived from vegetable oils and methanol that
can be easily used in unmodified diesel engines.  Biodiesel has been called
"liquid solar energy" because its energy content is derived from plants that
capture solar energy during photosynthesis.  The plants grown to produce
biodiesel consume carbon dioxide CO2, so they naturally balance most of the CO2
released when the fuel is combusted, offsetting a major contributing factor to
global warming.  Biodiesel is biodegradable and non-toxic, and has significantly
fewer emissions than petroleum-based diesel when burned.

Our management
is a focused senior team of professionals with finance and project development
expertise.  Our management has extensive experience and knowledge in the
production of biodiesel and the renewable energy sector.  In addition, our
company has attracted a skilled team of advisors and contractors with
significant experience in the field.

Within the
renewable energy sector, our company's primary investment opportunities will
involve clean fuels (primarily ethanol and biodiesel), enabling technologies and
the cultivation, harvesting and processing of oil plant feedstock in low cost
growing locations. From a strategic value perspective, our management believes a
geographic focus in South America will be a key component to building scale.

We are
proposing to construct and operate a biodiesel processing plant on 1.5 hectares
of land sub-leased near the Callao Port in Lima, Peru.  The plant is designed
for a continuous 24 hour production of 48,000 gallons of biodiesel per day,
equating to approximately 16.8 million gallons per year. Approximately 2.9
million pounds of crude glycerol will also be produced from the process.

13

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To date, we
have not generated any revenues from the production, processing and distribution
of biodiesel.  We plan to commence processing, production and distribution of
biodiesel upon completion of our proposed biodiesel processing plant located
near Callao Port in Lima, Peru.  We are a development stage company and we
anticipate that we will require significant time and financing before we
generate any revenue.  Once we have completed construction of our proposed
biodiesel processing plant, we intend to generate revenues through the sale of
biodiesel and glycerin. We have already signed certain pre-sale agreements with
local Peruvian fuel distributors for the entire anticipated production from the
Callao facility.

Our continued
existence and plans for future growth depend on our ability to obtain the
capital necessary to operate by issuance of additional equity shares.  We have
sufficient funds to meet our obligations for the short term of 3 months. 
However, we will require additional financing in order to meet all of our
anticipated operating expenses and for any new exploration projects.

PLAN OF
OPERATIONS

Overview

This current report contains
forward-looking statements that involve significant risks and uncertainties. The
following discussion, which focuses on our plan of operation through the
commencement of operations of our plant, consists almost entirely of
forward-looking information and statements. Actual events or results may differ
materially from those indicated or anticipated, as discussed in the section
entitled "Forward Looking Statements." This may occur as a result of many
factors, including those set forth in the section entitled "Risk Factors."

We intend to construct and operate
a 16 million gallon biodiesel production plant at Callao Port in Lima, Peru. 
Currently, we are a development stage company with no revenues from operations.
To date, our efforts have been devoted principally to developing plans for the
construction of the plant, engaging service providers and related activities.

On September 4, 2006, Pure
Biofuels Peru entered into a technology license agreement with Capricorn Del
Peru S.A.C. of Lima, who licensed the technology to construct a biodiesel
refinery in Callao.  Capricorn will provide the design, schematics and
operational parameters (temperature, pressure, residence time, flow and control)
for the construction of the refinery.  Under the agreement, we are required to
pay Capricorn a total of $1,200,000 plus general sales tax, of which $300,000 is
payable upon execution of the agreement, $300,000 is payable within 30 days of
execution of the agreement, and $400,000 is payable upon delivery of the
designs.  A translated copy of the agreement is attached hereto as Exhibit 10.2.

On September 29, 2006, Pure
Biofuels Peru entered into an engineering services contract with Polindustria
S.A. of Lima, who will develop the concepts, designs, installation and
construction of our biodiesel refinery.  Under the agreement, we are required to
pay Polindustria $120,000 plus applicable taxes.  A translated copy of the
agreement is attached hereto as Exhibit 10.3.

The plant will have a design
capacity to produce 16.8 million gallons of biodiesel per year. In addition, we
expect the plant will produce approximately 2.9 million pounds of crude glycerin
each year. The plant will consist principally of a materials handling and
storage area, a transesterification reactor in which the biodiesel is produced,
a storage and loading area for biodiesel and glycerin, truck scales and an
administrative office.

We will not generate revenue until
we complete construction of our plant, which we are targeting for August 2007,
or earlier if possible. In order for us to construct the plant and commence
operations, we will require a first round equity financing in the amount of $11
million.  In October 2006, we raised $4,702,145 by issuing 6,269,527 units to 97
non-US resident subscribers.  On November 10, 2006, we raised another $320,000
by issuing 426,666 units to two non-US resident subscribers.  Each unit consists
of one

14

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common share and one-half
warrant.  Each whole warrant entitles the holder thereof to purchase one common
share in the capital of our company for a period of one year at a price of
$1.50.  In conjunction with the private placement, the Company paid a finder's
fee of $195,000.  If we are successful in obtaining the first round equity
financing, we intend to utilize the proceeds of such financing as follows:



|Use of Proceeds                                  | Amount       
|------------------------------------------------ | -------------
|Organizational and Financing Costs               | $     855,603
|Capital Equipment                                | 6,525,864    
|Working Capital                                  | 2,069,056    
|Growth Initiatives: Research and Due
		Diligence | 1,000,000    
|Contingency                                      | 549,477      
|Total                                            | $11,000,000  

In October 2006, Pure Biofuels
Peru incorporated a Peruvian subsidiary company, Palma Industrial S.A.C. to
plant oil bearing crops such as African palm and jatropha to be processed at our
biodiesel refinery when it is constructed.  We plan to apply for forestry land
from the Peruvian government, which would provide us with a minimum of 20,000
hectares of land.  Further, Pure Biofuels Peru entered into a memorandum of
understanding with Conapal, Conferederacion Nacional de Palma, who will provide
us with a supply of oil bearing crops when required.

On September 7, 2006, Pure
Biofuels Peru entered into a CDM emission reductions purchase agreement with
Ecosecurities Group PLC, who has agreed to (i) work with us to obtain a Clean
Development Mechanism (CDM) approved by the European Trading Scheme and (ii) buy
100% of the Certified Emission Reduction credits generated by our refinery, when
constructed and in operation.  A translated copy of the agreement is attached
hereto as Exhibit 10.4.

On October 12, 2006, Pure Biofuels
Peru entered into a commercial distribution agreement with Ocean Marine S.A.C.,
who has agreed to distribute and purchase the biodiesel product we produce when
our refinery is constructed.  A translated copy of the agreement is attached
hereto as Exhibit 10.5.

Organizational and Financing Costs

We estimate that our organization
and financing costs for the next twelve month period will be approximately
$855,603. These costs will primarily consist of legal, administrative,
compliance and other expenses.

Capital Equipment

We are planning to commit to the
purchase order to acquire the process equipment within the next two months. 
Based on our project schedule, site assembly and infrastructure building will
commence in February 2007 with completion and startup in August 2007. Our
planned capital expenditures for the next twelve month period in connection with
the construction of the plant are estimated as follows:



|Expenditure                            | Amount    
|-------------------------------------- | ----------
|Biodiesel Processing Plant (Installed) | $2,551,790
|Storage Tanks                          | 2,088,000 
|Buildings                              | 280,000   
|Materials Handling Equipment           | 1,150,000 
|Spare Parts                            | 40,000    
|Lab Equipment                          | 76,000    
|Office Equipment and Software          | 150,000   
|Insurance                              | 190,074   
|Total                                  | $6,525,864

15

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Growth
Initiatives: Research and Due Diligence

We estimate that our research and
due diligence costs for the next twelve month period will be approximately
$1,000,000. These costs will primarily consist of feasibility studies to start
our own plantations of palm oil in order to be self sufficient in the sourcing
of our feedstock.

Contingency

We estimate that our contingency
costs for the next twelve month period will be approximately $549,478. These
costs will primarily consist of increases in raw materials cost for plant
construction such as steel or cement or delays in permitting from the local
authorities.

Employees

We estimate that our employee and
consultant compensation expenses for the next twelve month period will be
approximately $450,000. These costs will primarily consist of wages and
consulting contracts for hired professionals.

There will be seven employees
pre-construction and twenty two post-construction of our processing plant.  The
new employees post-construction will consist of plant operators and quality
control personnel.

Trends and Uncertainties

Our ability to generate revenues
in the future is dependent on whether we successfully complete construction of
our biodiesel processing plant. We cannot predict whether or when this may
happen and this causes uncertainty with respect to the continuation and growth
of our company and our ability to generate revenues.

Financing

To date, we have had negative cash
flows from operations and we have been dependent on sales of our equity
securities and debt financing to meet our cash requirements. We expect this
situation to continue for the foreseeable future. We anticipate that we will
have negative cash flows during our fiscal year ending December 31, 2006.

Given that we are a development
stage company and have not generated any revenues to date, our cash flow
projections are subject to numerous contingencies and risk factors beyond our
control, including our ability to manage our expected growth, complete
construction of our proposed plant and commence operations. We can offer no
assurance that our company will generate cash flow sufficient to meet our cash
flow projections or that our expenses will not exceed our projections. If our
expenses exceed estimates, we will require additional monies during the next
twelve months to execute our business plan.

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

MANAGEMENT'S DISCUSSION AND
ANALYSIS

Plan of Operation

Our acquisition of Pure Biofuels
Peru was recorded in our financial statements as a reverse acquisition for
accounting purposes.  Pure Biofuels Peru was incorporated on May 10, 2006 under
the laws of Peru. In accordance with the provisions governing the accounting for
reverse acquisitions, the financial

16

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statements are presented as a
continuation of Pure Biofuels Peru and include the results of operations of Pure
Biofuels Peru since incorporation on May 10, 2006, and the results of operations
of the Company since the date of acquisition on September 15, 2006.

Pure Biofuels Peru has not had
revenues from operations since its incorporation on May 10, 2006, and the
Company has not had revenues from operations since September 15, 2006.  For a
description of our plan of operations for the next 12 months, see Plan of
Operations described above.

Off-Balance Sheet Arrangements

Our company has no outstanding
derivative financial instruments, off-balance sheet guarantees, interest rate
swap transactions or foreign currency contracts. Neither our company nor our
operating subsidiary engages in trading activities involving non-exchange traded
contracts.

RISK FACTORS

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

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

Our common shares are considered
speculative during the development of our new business operations. Prospective
investors should consider carefully the risk factors set out below.

Risks Related To Our Business

We have no operating history on
which to base an evaluation of our business.

We are a recently incorporated
development stage company with no operating results to date. As we have no
operating history, we cannot evaluate our financial performance as of the date
of this current report. Our ability to continue our operations is dependent on
our obtaining financing through the sale of our equity securities. We anticipate
that we will incur increased operating costs without realizing any revenues
until the construction of our proposed biodiesel processing plant is completed,
which we expect to occur in August 2007. There can be no assurance that we will
be able to complete the construction of our proposed biodiesel processing plant
in August 2007, if ever, and therefore we may never realize any revenues. For
the year ending December 31, 2007, we expect to incur over $6.5 million on
capital expenditures for the construction and startup of our proposed biodiesel
processing plant and approximately $500,000 in operating expenses. We therefore
expect to incur significant losses into the foreseeable future. We recognize
that if we are unable to generate significant revenues from our proposed
biodiesel processing plant, we will not be able to earn profits or continue
operations. At this early stage of our operation, we also expect to face the
risks, uncertainties, expenses and difficulties frequently encountered by
companies at the start up stage of their business development. There is no
assurance that we will be successful in addressing these risks and uncertainties
and our failure to do so could have a materially adverse effect on our financial
condition. There is no history upon which to base any assumption as to the
likelihood that we will prove successful and we can provide investors with no
assurance that we will generate any operating revenues or ever achieve
profitable operations.

17

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The fact
that we have not earned any revenues since our incorporation raises substantial
doubt about our ability to continue as a going concern.

We have not generated any revenues
since our incorporation and we will continue to incur operating expenses without
revenues until our proposed biodiesel processing plant is completed. We estimate
our average monthly operating expenses to be approximately $100,000. As a
result, we will need to acquire financing. There can be no assurance that we
will be able to obtain the financing we require, or obtain such financing on
terms that are commercially viable for us. These circumstances raise substantial
doubt about our ability to continue as a going concern.

Our business could be
significantly impacted by changes in government regulations over energy policy.

Our operations and properties are
subject to a wide variety of federal, provincial and municipal laws and
regulations, including those governing the use, storage, handling, generation,
treatment, emission release, discharge and disposal of certain materials,
substances and wastes, the remediation of contaminated soil and groundwater, and
the health and safety of employees. As such, the nature of our operations
exposes us to the risk of claims with respect to such matters and there can be
no assurance that material costs or liabilities will not be incurred in
connection with such claims. Environmental legislation also provides for
standards, restrictions and prohibitions on the handling of certain types of
waste and for releases, spills, emissions into the environment of substances
that are being handled by our company. Any breach by our company of such
legislation may result in the suspension or revocation of necessary licenses,
permits or authorizations, civil liability and the imposition of fines and
penalties which would adversely affect our financial condition.

Our future growth is dependent
upon strategic relationships with existing petroleum distributors and feedstock
suppliers. If we are unable to develop and maintain such relationships, our
future business prospects could be significantly limited.

Our future growth will generally
be dependent on relationships with third parties, including alliances with
petroleum distributors and feedstock suppliers. We must be successful in
establishing strategic distribution and feedstock collection alliances with
third parties. These third parties may not regard their relationship with us as
important to their own business and operations, and there is no assurance that
they will not reassess their commitment to our business in the future or that
they will not develop products and services that compete with ours. Furthermore,
these third parties may not perform their obligations as agreed. In the event
that a strategic relationship is discontinued for any reason, our business,
results of operations and financial condition may be materially adversely
affected.

We plan to grow very rapidly,
which will place strains on our management team and other company resources.

We plan to grow rapidly and
significantly expand our operations. This growth will place a significant strain
on our management systems and resources. We will not be able to implement our
business strategy in a rapidly evolving market without effective planning and
management processes. We have a short operating history and have not implemented
sophisticated managerial, operational and financial systems and controls. We are
required to manage multiple relationships with various strategic partners,
including suppliers, distributors, and other third parties. To manage the
expected growth of our operations and personnel, we will be required to
significantly improve or replace existing managerial, financial and operational
systems, procedures and controls, and to expand, train and manage our growing
employee base. We will be required to expand our finance, administrative and
operations staff. We may be unable to complete, in a timely manner, the
improvements to our systems, procedures and controls necessary to support our
future operations, management may be unable to hire, train, retain, motivate and
manage required personnel and our management may be unable to successfully
identify, manage and exploit existing and potential market opportunities. As a
result, our business and financial condition may be adversely affected.

18

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Our proposed operations involve
certain environmental risks, including spills or leaks of hazardous and/or
flammable substances, which may negatively impact our financial condition.

Our proposed operations include
the transport, storage, handling and processing of hazardous materials which
involve inherent environmental risks. Any spillage or leaks of hazardous and/or
flammable substances used in our operations may cause injury to persons and/or
damage to property. As a result, we may become subject to liability for such
hazards and other hazards against which we cannot insure or against which we may
elect not to insure. The payment of such liabilities and other expenses, such as
restorative environmental costs, will have a negative impact on our financial
condition.

We are dependent on a limited
source of supply of oil bearing crops.

Our main
source of supply of oil bearing crops is to grow the crops ourselves and with
Canopal.  If one or both of these sources becomes unavailable for a period of
time, there could be exposure to high wholesale power prices and that amount
could be material.

A significant decline in the
price of oil could cause our business to lose customers or render our operations
obsolete.

Our success is dependent, in
part, to the current high price of oil.  A significant decline in the price of
oil will have a direct impact on our financial performance.

There are risks associated with
conducting our business operations in Peru, including political and social
unrest.

Our proposed biodiesel processing
plant will be located in Peru and, accordingly, we are subject to risks not
typically associated with ownership of U.S. companies and therefore should be
considered more speculative than investments in the U.S. Peru is a developing
country that has experienced political, social and economic difficulties over
the last several years. Our operations could be affected in varying degrees by
political instability, social unrest and changes in government regulation
relating to foreign investment and the biofuel industry. Operations may also be
affected in varying degrees by possible terrorism, military conflict, crime,
fluctuations in currency rates and high inflation. In addition, Peru has, from
time to time in the past, nationalized private businesses. There can be no
assurance that the Peruvian government will not nationalize our business and our
assets in the future. Our operations could be adversely affected by continued
political, social and economic unrest in Peru.

We will depend on key service
providers for assistance and expertise in beginning operations and any failure
or loss of these relationships could delay our operations, increase our expenses
and hinder our success.

We must establish and maintain
relationships with several key providers for contracting, consulting and other
services. Initially, we will need to secure contracts for labor and materials in
relation to the construction of our proposed biodiesel processing plant. Upon
completion of our proposed biodiesel processing plant, we will need to secure
transportation and utility services, ensuring environmental compliance and
obtaining required permits, contracting for feedstock supplies and, eventually,
marketing our biodiesel. If we should fail to maintain our relationship with any
of these key providers, or if any of these providers should fail to perform, we
would be forced to locate and retain alternative providers. As a consequence,
due to the critical nature of these services, the commencement, and
continuation, of our operations could be very seriously delayed, our start-up
expenses could be significantly increased and our business could be greatly
harmed, even to the point of failure of our company.

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There
are several agreements and relationships that remain to be negotiated, executed
and implemented which will have a critical impact on our operations, expenses
and profitability.

We have several agreements,
documents and relationships that remain to be negotiated, executed and
implemented before we can develop and construct our proposed biodiesel
processing plant and commence operations.  We have identified the parties with
whom we would need to establish a relationship but we have yet to finalize our
negotiations of the terms of the contract.   Examples include agreements for
equity financing, agreements to supply us with access to transportation
facilities, agreements to supply us with feedstocks and natural gas, contracts
with other utilities, and contracts to sell our production. Our expectations
regarding the likely terms of these agreements and relationships could vary
greatly from the terms of any agreement or relationship that may eventually be
executed or established. If we are unable to enter into these agreements or
relationships on satisfactory terms, or if revisions or amendments to existing
terms become necessary, the construction of our proposed biodiesel processing
plant and the commencement of our operations could be delayed, our expenses
could be increased and our profitability could be adversely affected and the
value of your investment could decline.

The cost of construction for
our proposed biodiesel plant could increase and, if an increase occurs, our
reserves may be depleted and the additional debt or equity capital that may be
required could delay and diminish our profitability and decrease the value of
your investment in our company.

A preliminary budget contemplates
construction of our proposed biodiesel processing plant at an estimated cost of
$6.5 million. Our financial plan is based on this estimated cost, plus the cost
of site acquisition and improvements, an administrative building, start-up and
development costs and reserves estimated of approximately $5,000,000, resulting
in total estimated capital requirements of $11,000,000. If the cost to design
and construct our proposed biodiesel processing plant or other costs increase
due to economic factors, design modifications, construction delays or cost
overruns, the total cost of our project and the capital required could increase,
perhaps significantly. In such an event, our profitability and ultimately the
financial condition of our company will be adversely affected.

Delays due to, among others,
weather, labor or material shortages, permitting or zoning delays, or opposition
from local groups, may hinder our ability to timely commence operations.

Our construction timetable, which
we believe to be reasonable, assumes the commencement of construction of our
proposed biodiesel processing plant in February 2007 and startup in August 2007.
Our schedule depends upon several assumptions, including the effectiveness of
agreements that remain to be negotiated and signed. We could also incur delays
in the construction of our proposed biodiesel processing plant if we need to
change the site for the plant due to permitting or zoning delays, opposition
from local groups, adverse weather conditions, labor or material shortages,
defects in materials or workmanship or other causes. In addition, the
availability of financing, changes in interest rates or the credit environment
or changes in political administrations at the federal, state or local level
that result in policy changes towards biofuel or our plant could result in
delays in our timetable for construction and commencement of operations. Any
such delays will adversely affect our ability to commence operations and
generate revenue.

Defects
in the construction or performance of our proposed biodiesel processing plant
could result in a reduction in our revenues and profitability and in the value
of your investment in our company.

We anticipate that the
construction of our proposed biodiesel processing plant will contain warranties
with respect to materials and workmanship and assurances that the plant will
operate at design capacity. However, defects in the construction or performance
of the plant could occur and there is no assurance that we will be able to
correct any problems that do in fact occur. If our plant does not perform at or
above design specifications, we may not be able to compete in a competitive
marketplace. If defects delay the construction or hinder the operations of the
plant, our operations, revenues, profitability and the value of your investment
in our company could be materially adversely affected. If defects require a
lengthy or permanent discontinuance of production, your investment could be
reduced to very little or no value.

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Our business will not be
diversified because we will be primarily dependent upon one product. As a
consequence, we may not be able to adapt to changing market conditions or endure
any decline in the biodiesel industry.

We expect our business to consist
primarily of biodiesel production and sales and, to a lesser extent, consist of
the sale of glycerin. We do not have any other lines of business or other
sources of revenue to rely upon if we are unable to produce and sell biodiesel
and glycerin, or if the markets for such products declines. Our proposed
biodiesel processing plant will not have the ability to produce any other
products. Our lack of diversification means that we may not be able to adapt to
changing market conditions or to withstand any significant decline in the
biodiesel industry.

Our
financial results will greatly depend on prices for our feedstock supplies and
market prices for the biodiesel that we produce.

The cost that we incur for our
supplies of vegetable oil feedstock and rendered animal fats and the market
prices for the biodiesel that we produce and sell will have a major impact on
our financial results and profitability. Feedstock inputs, which comprise a
major portion of our operating expenses, do not have a direct price relationship
to the price of biodiesel in the marketplace. For an operating biodiesel plant,
falling biodiesel prices, coupled with a rise in feedstock prices, can result in
significant reductions in cash flow and reduced profitability. These prices will
change based on available supplies, the supply and market prices for alternative
products and other market factors. For instance, increased supplies of biodiesel
may lead to lower prices for biodiesel, regardless of the price of feedstocks.
In addition, increased production of biodiesel could result in increased demand
for feedstocks, resulting in higher operating costs and lower profitability.
There can be no assurance as to the price of these commodities in the future,
and any increase in feedstock prices or decrease in the price of biodiesel would
adversely affect our financial condition.

Our operating costs could be
higher than we expect, and this could reduce our income and any distributions we
may make.

In addition to general economic
conditions, market fluctuations and commodity prices, significant increases in
operating costs could adversely affect our company due to numerous factors, many
of which are beyond our control. These increases could arise for several
reasons, such as:

- higher
	prices for feedstocks, animal fats and other biodiesel resources (as
	discussed above);
- higher
	natural gas prices, due to rising energy prices in general or increased
	demands on available supplies of natural gas;
- increased
	costs for electricity, water and other utilities;
- higher
	transportation costs for required feedstocks and for our biodiesel products
	due to rising fuel costs and greater demands on truck and rail
	transportation services; and
- rising labor costs, particularly if any labor shortage should occur.

Upon completion of our proposed
biodiesel processing plant, our operations will also subject us to ongoing
compliance with applicable governmental regulations, such as those governing
pollution control, occupational safety and other matters. We may have difficulty
complying with these regulations and our compliance costs could increase
significantly. Increases in operating costs would have a negative impact on our
operating income, and could result in substantially decreased earnings or a loss
from our operations, adversely affecting our financial condition.

The
market price of biodiesel has followed the price of petroleum fuels, such as
diesel fuel, and decreases in the price of petroleum-based fuels would very
likely decrease the price of biodiesel, resulting in reductions in our revenues.

Historically, biodiesel prices
have generally paralleled movements in petroleum prices. Petroleum prices in the
international market have been difficult to forecast due to the impact of wars
and other political factors, economic uncertainties, exchange rates and natural
disasters. Just as a small reduction in the

21

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real or anticipated supply of
crude oil can have a significant upward impact on the price of petroleum-based
fuels, a perceived reduction of such threats can result in a significant
reduction in petroleum fuel prices. Because biodiesel costs of production are
relatively high compared to petroleum production and refining costs, a reduction
in petroleum-based fuel prices can have a significantly adverse effect on
biodiesel revenues and profits, which would adversely affect our financial
condition.

The biodiesel industry is very
competitive.

Competition in the biodiesel
industry is strong and growing more intense as more production facilities are
built and the industry expands. Our business will face competitive challenges
from larger facilities that can produce a wider range and larger quantity of
products than we can, and from other plants similar to our proposed biodiesel
processing plant. All of these biodiesel producers will compete with us for
feedstocks and customers in our regional market. We expect that additional
biodiesel producers will enter the market if the regulatory environment remains
favorable and the demand for biodiesel continues to increase.

As more biodiesel plants are
built, biodiesel production will increase and, if demand does not sufficiently
increase, this could result in lower prices for biodiesel and glycerin, which
will decrease the amount of revenue we generate.

A significant number of biodiesel
plants are currently being planned and built in the United States and around the
world. As a consequence, biodiesel production is expected to increase rapidly in
the next two to three years. The demand for biodiesel is dependent upon numerous
factors such as governmental regulations, governmental incentives, whether
existing incentives for the production and use of biodiesel continue and the
development of other technologies or products that may compete with biodiesel.
If the demand for biodiesel does not sufficiently increase, then increased
biodiesel production may lead to lower biodiesel prices. In addition, because
biodiesel production produces glycerin as a co-product, increased biodiesel
production will also lead to increased supplies of glycerin. Demand for glycerin
depends upon various factors, the most significant of which is oversupply. A
further increase in the supply of glycerin, without offsetting increases in
demand, could continue the trend to lower prices in the glycerin market.
Decreases in the market price of biodiesel and glycerin will result in lower
revenues for our company, decreased profitability, and adversely affect our
financial condition.

Technological advances and
changes in production methods in the biodiesel industry could render our plant
obsolete and adversely affect our ability to compete and the value of your
investment.

Technological advances could
significantly decrease the cost of producing biodiesel. If we are unable to
adopt or incorporate technological advances into our operations, our proposed
biodiesel processing plant could become uncompetitive or obsolete. We expect
that technological advances in biodiesel production methods will continue to
occur. If improved technologies become available to our competitors, they may be
able to produce biodiesel at a lower cost than us. In such an event, we may be
required to acquire new technology and retrofit our plant so that we remain
competitive. There is no assurance that third-party licenses for any new
technologies would be available on commercially reasonable terms or that any new
technologies could be incorporated into our proposed biodiesel processing plant.
The costs of upgrading our technology and plant could be substantial. If we are
unable to obtain, implement or finance new technologies, our plant could be
uncompetitive and our operating income would be reduced.

The
development of alternative fuels and energy sources may reduce the demand for
biodiesel, resulting in a reduction in our profitability.

Alternative fuels, including a
variety of energy alternatives to biodiesel, are continually under development.
Petroleum based fuels and other energy sources that can compete with biodiesel
in the marketplace are already in use and more acceptable alternatives may be
developed in the future, which may decrease the demand for biodiesel or the type
of biodiesel that we expect to produce. Technological advances in engine and
exhaust system design and performance could also reduce the use of biofuels,
which would reduce the demand for biodiesel. Further advances in power
generation technologies, based on cleaner hydrocarbon based fuels, fuel cells
and hydrogen are actively being researched and

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developed. If these technological
advances and alternatives prove to be economically feasible, environmentally
superior and accepted in the marketplace, the market for biodiesel could be
significantly diminished or replaced, which would adversely affect our financial
condition.

Competition for qualified
personnel in the biodiesel industry is intense and we may not be able to hire
and retain qualified managers, engineers and operators to operate our plant
efficiently.

When construction of our proposed
biodiesel processing plant nears completion, assuming we are able to begin and
continue such construction, we will need a significant number of employees to
operate the plant. Our success depends in part on our ability to attract and
retain competent personnel. We must hire or otherwise engage qualified managers,
engineers and accounting, human resources, operations and other personnel.
Competition for employees in the biodiesel industry is intense. If we are unable
to hire, train and retain qualified and productive personnel, we may not be able
to operate the plant efficiently and the amount of biodiesel we produce and
market may decrease.

Compliance with new and
existing environmental laws and regulations could significantly increase our
construction and start-up costs, and force us to delay or halt construction or
operation.

To construct our proposed
biodiesel processing plant, we will need to obtain and comply with a number of
permitting requirements. We may have difficulties obtaining the permits we need.
As a condition of granting necessary permits, regulators could make additional
demands that increase our costs of construction and operations, in which case we
could be forced to obtain additional debt or equity capital. Environmental
issues, such as contamination and compliance with applicable environmental
standards, could arise at any time during the construction and operation of our
proposed biodiesel processing plant. If this occurs, it would require us to
spend significant resources to remedy the issues and may delay or prevent
construction or operation of the plant. This would significantly increase the
cost of our proposed biodiesel processing plant. We cannot assure you that we
will be able to obtain and comply with all necessary permits to construct and
operate our proposed biodiesel processing plant as planned.

Our ability to hire and retain
key personnel will be an important factor in the success of our business and a
failure to hire and retain key personnel may result in our inability to manage
and implement our business plan.

We are highly dependent upon our
management personnel such as Luis Goyzueta, Patrick Orlando, Carlos Alberto
Pinto and Gustavo Goyzueta because of their experience in the alternative energy
industry and specifically with biodiesel and related products. The loss of the
services of one or more of these individuals may impair management's ability to
operate our company. We have not purchased key man insurance on any of these
individuals, which insurance would provide us with insurance proceeds in the
event of their death. Without key man insurance, we may not have the financial
resources to develop or maintain our business until we could replace the
individual or to replace any business lost by the death of that person. The
competition for qualified personnel in the markets in which we operate is
intense. In addition, in order to manage growth effectively, we must implement
management systems and recruit and train new employees. We may not be able to
attract and retain the necessary qualified personnel. If we are unable to retain
or to hire qualified personnel as required, we may not be able to adequately
manage and implement our business.

Most of our assets and all of
our directors and officers are outside the United States, with the result that
it may be difficult for investors to enforce within the United States any
judgments obtained against us or any of our directors or officers.

Although we are organized under
the laws of the State of Nevada, United States, the main operating section of
our business is located in Lima, Peru. Outside the United States, it may be
difficult for investors to enforce judgements against us that are obtained in
the United States in any action, including actions predicated upon civil
liability provisions of federal securities laws. In addition, all of our
directors and officers reside outside the United States, and nearly all of the
assets of these persons and our assets are located outside of the United States.
As a result, it may not be possible for investors to effect service of

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process within the United States
upon such persons or to enforce against us or such persons judgements predicated
upon the liability provisions of United States securities laws. There is
substantial doubt as to the enforceability against us or any of our directors
and officers located outside the United States in original actions or in actions
of enforcement of judgments of United States courts or liabilities predicated on
the civil liability provisions of United States federal securities laws. In
addition, as the majority of our assets are located outside of the United
States, it may be difficult to enforce United States bankruptcy proceedings
against us. Under bankruptcy laws in the United States, courts typically have
jurisdiction over a debtor's property, wherever it is located, including
property situated in other countries. Courts outside of the United States may
not recognize the United States bankruptcy court's jurisdiction. Accordingly,
you may have trouble administering a United States bankruptcy case involving a
Nevada company as debtor with most of its property located outside the United
States. Any orders or judgements of a bankruptcy court obtained by you in the
United States may not be enforceable.

Our business is subject to
comprehensive government regulation and any change in such regulation may have a
material adverse effect on our company.

There is no assurance that the
laws, regulations, policies or current administrative practices of any
government body, organization or regulatory agency in the United States or any
other jurisdiction, will not be changed, applied or interpreted in a manner
which will fundamentally alter the ability of our company to carry on our
business. The actions, policies or regulations, or changes thereto, of any
government body or regulatory agency, or other special interest groups, may have
a detrimental effect on our company. Any or all of these situations may have a
negative impact on our operations.

Risks Related To Our Common
Stock

A decline in the price of our
common stock could affect our ability to raise further working capital and
adversely impact our ability to continue operations.

A prolonged decline in the price
of our common stock could result in a reduction in the liquidity of our common
stock and a reduction in our ability to raise capital. Because a significant
portion of our operations has been and will be financed through the sale of
equity securities, a decline in the price of our common stock could be
especially detrimental to our liquidity and our operations. Such reductions may
force us to reallocate funds from other planned uses and may have a significant
negative effect on our business plans and operations. If our stock price
declines, we can offer no assurance that we will be able to raise additional
capital or generate funds from operations sufficient to meet our obligations. If
we are unable to raise sufficient capital in the future, we may not be able to
have the resources to continue our normal operations.

The market price for our common
stock may also be affected by our ability to meet or exceed expectations of
analysts or investors. Any failure to meet these expectations, even if minor,
may have a material adverse effect on the market price of our common stock.

If we
issue additional shares in the future, it will result in the dilution of our
existing shareholders.

Our certificate of incorporation
authorizes the issuance of up to 93,750,000 shares of common stock. Our board of
directors may choose to issue some or all of such shares to acquire one or more
businesses or to provide additional financing in the future. The issuance of any
such shares will result in a reduction of the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will cause a reduction in the proportionate ownership and voting
power of all current shareholders. Further, such issuance may result in a change
of control of our corporation.

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

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

NASD sales practice
requirements may also limit a stockholder's ability to buy and sell our stock.

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

Our common stock is illiquid
and the price of our common stock may be negatively impacted by factors which
are unrelated to our operations.

Our common stock currently trades
on a limited basis on the OTC Bulletin Board. Trading of our stock through the
OTC Bulletin Board is frequently thin and highly volatile. There is no assurance
that a sufficient market will develop in the stock, in which case it could be
difficult for shareholders to sell their stock. The market price of our common
stock could fluctuate substantially due to a variety of factors, including
market perception of our ability to achieve our planned growth, quarterly
operating results of our competitors, trading volume in our common stock,
changes in general conditions in the economy and the financial markets or other
developments affecting our competitors or us. In addition, the stock market is
subject to extreme price and volume fluctuations. This volatility has had a
significant effect on the market price of securities issued by many companies
for reasons unrelated to their operating performance and could have the same
effect on our common stock.

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Item 3.
Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the
supervision and with the participation of our management, including the Chief
Executive Officer and Chief Financial Officer, we have evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14(c) as of the end of the period
covered by this report. Based on that evaluation, the Chief Executive Officer
and Chief Financial Officer have concluded that these disclosure controls and
procedures are effective. There were no changes in our internal control over
financial reporting during the quarter ended September 30, 2006 that have
materially affected, or are reasonably likely to materially affect, our internal
controls over financial reporting. Potential investors should be aware that the
design of any system of controls and procedures is based in part upon certain
assumptions about the likelihood of future events. There can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.



PART II  -  OTHER INFORMATION

Item
1.  Legal Proceedings

None

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following
sets forth certain information regarding sales of equity securities that were
either not registered under the Securities Act or not previously included in a
Current Report on Form 8-K during the three months ended September 30, 2006:

None.

Item 3. Defaults upon Senior Securities

None.

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

None.

Item 5.  Other Information.

Change in Control and Change in Business

On September
15, 2006, we acquired 99.9% of the issued and outstanding shares of Pure
Biofuels Peru, a private Peruvian company, abandoned our previous business plan
and commenced the plan to construct and operate a biodiesel processing plant in
Peru through Pure Biofuels Peru.  At the same time we sold our wholly-owned
subsidiary, Metasun Software Corp., to Chad DeGroot and Alastair Anderson, who
in consideration returned to us for cancellation all shares of our company that
were held by them.  This acquisition and disposition of assets are described in
more details in our Form 8-K filed on October 2, 2006.

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Changes in Directors and Officers

Also on
September 15, 2006, Chad DeGroot resigned as a director and officer of our
company, and Luis Goyzueta and David Clifton were appointed directors.  On
October 27, 2006, David Clifton resigned as director.  On November 9, 2006, Joy
Clifton was appointed a director.  Presently, we have two directors, Luis
Goyzueta and Joy Clifton.  Luis Goyzueta is our CEO and President, and Joy
Clifton is our Secretary-Treasurer.  David Clifton, Joy Clifton's son, remains
our Vice President.  Patrick Orlando is our Chief Technical Officer, and Luis
Goyzueta's brother, Gustavo Goyzueta, is our Chief Financial Officer.

Luis Goyzueta
obtained a degree in Economics and Finance from Bentley College in Boston. Mr.
Goyzueta has been a director of Urex Energy Corp., a Nevada corporation whose
business primarily includes the acquisition and exploration of uranium mining
properties, since August 31, 2005. Prior to this, Mr. Goyzueta has had over
seven years experience working as an executive with natural resource companies
in Peru. Most recently, he has been the General Manager of Interpacific Oil, the
only biodiesel producer in Peru. In addition, Mr. Goyzueta has been a director
of Compania Minera Moria, a privately held mining company in Peru, and Oiltec, a
petrochemical distributor.

David Clifton
has been in the venture capital market for over 15 years. He has been an
investment advisor in Canada for over eleven years, working for Goepel McDermid
and Dundee Securities. Mr. Clifton has held General Manager positions and has
been a director in two private Peruvian mining companies, Grupo Minero and
Minera Panmericana. He has also performed consulting work for both public and
private companies. Mr. Clifton is the co-founder of Pure Biofuels del Peru S.A.C.

From 2001 to
the present, Joy Clifton has been the President and Chief Executive Officer of
Soar International Management Company, a boutique early stage business
development incubator. Prior to founding Soar International Management Company,
Ms. Clifton was a founder and director of Soar International Events Company from
1993 through to 2001, where she was responsible for business development. Soar
International Events Company was involved in the sport event market industry.
From 1989 to 1993, Ms. Clifton was the Executive Secretary at Swim BC, an
Olympic swimming governing body.

Patrick
Orlando, age 34, has held a number of senior positions with leading corporations
including Deutsche Bank, J.P. Morgan & Co. Inc. and Banco Interandino. He is
currently Director of P.O. Consulting, where he provides consulting services to
a number of companies focused on project analysis, engineering and financial
studies, and implementing new technologies. Mr. Orlando holds a B.Sc. in
Mechanical Engineering from the Massachusetts Institute of Technology and an MBA
from Alfred P. Sloan School of Management.

Gustavo
Goyzueta, age 27, has held manager positions with Oiltec s.a.c and Software s.a.
for the past four years.  While working for these companies, he conducted
investment analysis, negotiated terms, coordinated treasury functions and
capital budgeting. Mr. Goyzueta holds a B.Sc. in Finance from Bentley College in
Boston.

Consulting Contracts

Luis Goyzueta

Effective
September 1, 2006, Pure Biofuels Peru entered into an employment agreement with
Luis Goyzueta to provide the services of general manager to Pure Biofuels Peru. 
The agreement provides for Pure Biofuels Peru to pay Mr. Goyzueta $10,000 per
month and is terminable by either party by providing the required notice.  A
copy of the translated copy of this employment agreement is attached hereto as
Exhibit 5.1.

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Gustavo Goyzueta

Effective
September 1, 2006, Pure Biofuels Peru entered into an employment agreement with
Gustavo Goyzueta to advise and assist Pure Biofuels Peru in all aspects of the
financial, bookkeeping and accounting services, and to assist in establishing
proper internal control procedures and documentation for Pure Biofuels Peru. 
The agreement provides for Pure Biofuels Peru to pay Mr. Goyzueta $5,000 per
month and is terminable by either party by providing the required notice.  A
copy of the translated copy of this employment agreement is attached hereto as
Exhibit 5.2.

Patrick
Orlando

We do not have
a written contract with Patrick Orlando.

David
Clifton

Effective
September 15, 2006, the Company entered into a consulting agreement with David
Clifton and Clifton Consulting, to advise and assist the Company in implementing
a strategy for executing the business plan, to provide direction to management,
to assist with the day-to-day operations of the Company, to advise and assist
the Company in developing and implementing plans and materials for presentation
to the financial community as well as assist the Company with shareholder
relations among other duties.  The agreement provided that the Company
compensates Mr. Clifton $7,000 per month, and a one-time signing bonus of
$3,500.  The agreement is terminable by either party on four weeks notice.  A
copy of this consulting agreement is attached hereto as Exhibit 5.3.  The
Company also paid Mr. Clifton a one-time director bonus of $100,000.

Joy Clifton

Effective
September 15, 2006, the Company entered into a consulting agreement with Joy
Clifton and Soar International, to provide bookkeeping and accounting services,
and to assist in establishing proper internal control procedures and
documentation for the Company.  The agreement provided that the Company
compensates Ms. Clifton $2,000 per month, and a one-time signing bonus of
$3,000.  The Agreement is terminable by either party on four weeks notice.  A
copy of this consulting agreement is attached hereto as Exhibit 5.4.

Andrew Tai

Effective
September 15, 2006, the Company entered into a consulting agreement with Tai
Consulting and Andrew Tai, to provide investor relations services to the
Company, advise and assist the Company in developing and implementing plans and
materials for presentation to the financial community, initiate and maintain
contact with brokers and brokerage houses to provide them with the news of the
Company; as well as to travel to and attend trade shows to promote the interests
of the Company and the Company's business.  The agreement provided that the
Company compensates Mr. Tai $3,000 per month, and a one-time signing bonus of
$7,500.  The agreement is terminable by either party on four weeks notice.  A
copy of this consulting agreement is attached hereto as Exhibit 5.5.

Kevin
Mizuno

Effective
September 15, 2006, the Company entered into a consulting agreement with Miz 1
Consulting and Kevin Mizuno, to provide investor relations services to the
Company, advise and assist the Company in developing and implementing plans and
materials for presentation to the financial community, initiate and maintain
contact with brokers and brokerage houses to provide them with the news of the
Company; as well as to travel to and attend trade shows to promote the interests
of the Company and the Company's business.  The agreement provided that the
Company compensates Mr. Mizuno $3,000 per month, and a one-time signing bonus of
$7,500.  The agreement is terminable by either party on four weeks notice.  A
copy of this consulting agreement is attached hereto as Exhibit 5.6.

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Vancouver
Office

On October 10,
2006, we entered into a lease for premises located at 910 Richards Street, Suite
203, Vancouver, British Columbia.  We are leasing this 1,900 square feet of
operations as our principal executive office at approximately $2,800 (CAD$3,000
plus taxes) per month until October 2008.

Peru Office

On October 1,
2006, Pure Biofuels Peru entered into a lease for premises located at Av.
Canaval y Moreyra 380, Of 402, San Isidro, Lima, Peru.  We are leasing this 420
square meters of operations as the operations office for our Peruvian
subsidiary, at $4,000 per month until September 31, 2009.

Stock
Option Plan

On November 1,
2006, we adopted a stock option and award plan, which authorizes the issuance of
up to 18,000,000 shares of common stock of the Company by way of options and
stock awards to the Company's employees, directors, officers, consultants and
advisors.  The Company plans to grant stock options to the employees of its
Peruvian subsidiary.

Item 6.  Exhibits

|Exhibit No. | Description of
			Exhibit                                                                                                                   
|----------- | --------------------------------------------------------------------------------------------------------------------------------------------
|5.1         | Employment
		Agreement between Pure Biofuels Peru and Luis Goyzueta dated September
		1, 2006 (translated copy)                             
|5.2         | Employment
		Agreement between Pure Biofuels Peru and Gustavo Goyzueta dated
		September 1, 2006 (translated copy)                          
|5.3         | Consulting
		Agreement with David Clifton and Clifton Consulting dated September 15,
		2006                                                 
|5.4         | Consulting
		Agreement with Joy Clifton and Soar International dated September 15,
		2006                                                   
|5.5         | Consulting
		Agreement with Tai Consulting and Andrew Tai dated September 15, 2006                                                          
|5.6         | Consulting
		Agreement with Miz 1 Consulting and Kevin Mizuno dated September 15,
		2006                                                    
|10.1        | 2006 Stock
		Option and Award Plan                                                                                                          
|10.2        | Technology
		License Agreement between Pure Biofuels del Peru SAC and Capricorn Del
		Peru S.A.C. dated September 4, 2006 (translated copy).
|10.3        | Engineering Services Contract between Pure Biofuels del Peru SAC and
		Polindustria S.A. dated September 29, 2006 (translated copy)         
|10.4        | CDM
		Emission Reductions Purchase Agreement between Pure Biofuels del Peru
		SAC and Ecosecurities Group PLC dated September 7, 2006       
|10.5        | Commercial
		Distribution Agreement between Pure Biofuels del Peru SAC and Ocean
		Marine S.A.C. dated October 12, 2006 (translated copy)   

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|Exhibit No. | Description of
			Exhibit                                                                            
|----------- | -----------------------------------------------------------------------------------------------------
|31.1        | Certifications of Chief Executive Officer Pursuant to Section 302 of the
		Sarbanes-Oxley Act of 2002
|31.2        | Certifications of Chief Financial Officer Pursuant to Section 302 of the
		Sarbanes-Oxley Act of 2002
|32.1        | Certifications of Chief Executive Officer Pursuant to Section 906 of the
		Sarbanes-Oxley Act of 2002
|32.2        | Certifications of Chief Financial Officer Pursuant to Section 906 of the
		Sarbanes-Oxley Act of 2002









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SIGNATURES

In accordance with the
requirements of the Exchange Act, the registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.



|                        | PURE
		BIOFUELS CORP.
|----------------------- | ---------------------
|                        |                      
|                        |                      
|Date: November 17, 2006 | By:                  
|                        |                      
|                        |                      
|                        |                      
|Date: November 17, 2006 | By:                  
|                        |                      









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