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UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC  20549








FORM
10-KSB





S
              ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE
      ACT OF 1934


For the
fiscal year ended: December 31,
2007





£
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from________________ to ________________








SYNTHENOL
      INC.(Exact
      name of registrant as specified in its
charter)








Florida
            
            000-29219
            
            98-0199508(State
      or other jurisdiction of incorporation or organization)
            
            (Commission
      File Number)
            
            (IRS
      Employer Identification No.)








Suite
      206, 388 Drake
              Vancouver,
      British Columbia, Canada
            
            V6B
      6A8(Address
      of principal executive offices)
            
            (Zip
      Code)







Issuer’s
      telephone number
              (including
      area code)
            
            (604)
      648-2090







LegalPlay
      Entertainment INC.
              Address
              201-1166
      Alberni Street Vancouver, British Columbia, Canada
            
            V6E
      3Z3(Former
      name, former address and former fiscal year, if changed since last
      report)
            
            (Zip
      Code)


-1-





Securities
registered pursuant to Section 12(b) of the
Act:        None





Securities
registered pursuant to Section 12(g) of the
Act:        Common Stock





Indicate
by check mark whether the registrant (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  S                     No  £





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 or
Regulation S-B is not contained herein, and no disclosure will be contained, to
the best of the registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.





Yes  S                     No  £





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).





Yes  £                     No  S





Revenues
for the year ended December 31, 2007 were $0.00.





The
aggregate value of the issuer’s common stock held by non-affiliates (assuming
that the issuer’s only affiliates are its’ directors, officers and 10% or
greater stockholders) of the issuer as of December 31, 2007 was $117,043 based
upon the closing bid price of $0.160 per share of common stock on that date as
reported by the NASD OTC Bulletin Board under the symbol “STHL”.





REGISTRANTS
INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS





Not
applicable.








(APPLICABLE
ONLY TO CORPORATE REGISTRANTS)





Indicate
the number of shares outstanding of each of the registrant’s classes of common
equity, as of the latest practicable date:





December
31, 2007 – 731,521 Common Shares.








DOCUMENTS
INCORPORATED BY REFERENCE





A
description of “Documents Incorporated by Reference” is contained in Item 13 of
this Report.





Transitional
Small Business Disclosure FormatYesS                    No£





-2-





NOTE
REGARDING FORWARD LOOKING STATEMENTS





This
annual report on Form 10-KSB ("Report") contains statements that may contain
forward-looking statements, concerning our future operations and planned future
acquisitions and other matters and we intend that such forward-looking
statements be subject to the safe harbors for such statements.  Any
statements that involve discussions with respect to predictions, expectations,
belief, plans, projections, objectives, assumptions or future events or
performance (often, but not always, using phrases such as "expects", or "does
not expect", "is expected", "anticipates" or "does not anticipate", "plans",
"estimates" or "intends", or stating that certain actions, events or results
"may", "could", "might", or "will" be taken to occur or be achieved) are not
statements of historical fact and may be "forward looking
statements".  These forward-looking statements include statements
relating to, among other things, our ability to continue to successfully compete
in our markets.





We
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made.  Such
forward-looking statements are based on our beliefs and estimates of management
as well as on assumptions made by and information currently available to the
registrant at the time such statements were made.  Forward looking
statements are subject to a variety of risks and uncertainties which could cause
actual events or results to differ from those reflected in the forward looking
statements, including, without limitation, the failure to obtain adequate
financing on a timely basis and other risks and uncertainties. Actual results
could differ materially from those projected in the forward-looking statements,
either as a result of the matters set forth or incorporated in this Report
generally and certain economic and business factors, some of which may be beyond
our control.





These
factors include, among others, the risk factors discussed in the section
entitled "risk factors." We disclaim any obligation subsequently to revise any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.





-3-





SYNTHENOL
INC.


(the
“Company”)





FORM
10-KSB


Table
of Contents





PART
      IItem
      1.
            DESCRIPTION OF BUSINESS
            5Item
      2.
            DESCRIPTION OF PROPERTY
            8Item
      3.
            LEGAL PROCEEDINGS
            8Item
      4.
            SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
            8PART
      IIItem
      5.
            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS
            9Item
      6.
            MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION
            9Item
      7.
            FINANCIAL STATEMENTS
            11Item
      8.
            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
            29Item
      8a.
            CONTROLS AND PROCEDURES
            29Item
      8b.
            CHANGE IN INTERNAL CONTROL
            30PART
      IIIItem
      9.
            DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
            30Item
      10.
            EXECUTIVE COMPENSATION
            32Item
      11.
            SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND
      RELATED STOCKHOLDER MATTERS
            33Item
      12.
            CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS
            34Item
      13.
            INDEX TO EXHIBITS
            35Item
      14.
            PRINCIPAL ACCOUNTANT FEES AND SERVICES
            35


-4-
 Table of Contents




PART
I





Item
      1.
            Description of Business





Business
Development





The
Companies management has been reviewing the legalities of offering on line Poker
tournaments to players in the United States and is in discussion with a software
developer to provide an online poker solution to launch a web site dedicated to
Americans wishing to play Poker on line in a legal environment. The system is
based on offering players the ability to join a poker card room by way of a
monthly subscription fee with the object of playing in Poker tournaments to win
cash prizes.





The
Company is analyzing the economics of setting up a website and viewing the
probability of raising capital to launch such a business model. The Company
proposes to charge a monthly subscription fee and will initially offer daily
prizes of $1,000 and weekly prizes of $5,000. The projected prize budget is
$150,000 per month and the infrastructure costs and licensing fees will be in
the range of $50,000 per month.





If the
Company decides to pursue this business model they will have to raise
approximately $2,500,000 to cover costs for one year. We estimate that the
Company will in time have 50,000 paying subscribers and generate approximately
$12 million per year.





In the
event the company proceeds with this project they will apply to change their
corporate name back to LegalPlay which is appropriate for the business they wish
to enact.





We are in
immediate need of further working capital and are considering options with
respect to financing in the form of related party advances, debt, equity or a
combination thereof. Management is considering a reverse split in order to
increase the share price and reduce the number of issued and outstanding
shares.





Competition





The
on-line gaming market is rapidly evolving and intensely competitive and we
expect that competition will further intensify in the future. Barriers to entry
are low.





Many of
our competitors have longer operating histories, larger customer bases, greater
brand recognition and greater financial, marketing and other resources than us.
We are aware that certain of our competitors have and may continue to adopt
aggressive policies and devote substantially more resources to website and
systems development than us. Increased competition may result in reduced
operating margins, loss of market share and a diminished brand
franchise.





There can
be no assurance that we will be able to compete successfully against current and
future competitors. New technologies and the expansion of existing technologies
may increase the competitive pressures on us.





Internet
Gaming Companies





Our
research shows that there are a number of public and private companies competing
for market share in the Internet Poker gaming world. We anticipate being able to
provide updated and upgraded software at a highly competitive
level.





Government
Regulation of the Internet





We may be
subject, both directly and indirectly, to various laws and regulations relating
to our business, although there are few laws or regulations directly applicable
to selling on-line gaming software on the Internet. However, due to the
increasing popularity and use of the Internet, it is possible that a number of
laws and regulations may be adopted with respect to gaming on the Internet. Such
laws and regulations may cover issues such as user privacy, pricing, content,
copyrights, distribution and characteristics and quality of products and
services.





-5-
 Table of Contents





Furthermore,
the growth and development of the market for online commerce may prompt calls
for more stringent consumer protection laws that may impose additional burdens
on those companies conducting business online. The enactment of any additional
laws or regulations may impede the growth of gaming on the Internet which could,
in turn decrease the demand for our products and services and increase our cost
of doing business, or otherwise have an adverse effect on us.





Risk
Factors





An
investment in our common stock involves a high degree of risk. You should read
the following risk factors carefully before purchasing our common stock. The
risks and uncertainties described below are not the only ones we face. Other
risks and uncertainties, including those that we do not currently consider
material, may impair our business. If any of the risks discussed below actually
occur, our business, financial condition, operating results or cash flows could
be materially adversely affected. This could cause the trading price of our
common stock to decline. The terms "we", "our" and "us" refer to the
Company.





Limited
Operating History





We have a
short operating history on which to base an evaluation of our business and
prospects. Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their early stage of
development, particularly companies in new and rapidly evolving markets such as
online commerce. Such risks include, but are not limited to, possible inability
to respond promptly to changes in a rapidly evolving and unpredictable business
environment and the risk of inability to manage growth. To address these risks,
we must, among other things, develop and expand our customer base, successfully
implement our business and marketing strategies, continue to develop and upgrade
website and transaction- processing systems, provide superior customer service,
respond to competitive developments, and attract and retain qualified personnel.
If we are not successful in addressing such risks, we may be materially
adversely affected.





Dependence
on Continued Growth of Online Commerce





Our
long-term viability is substantially dependent upon the widespread consumer
acceptance and use of the Internet as a medium of commerce. Use of the Internet
as a means of effecting monetary transactions is at an early stage of
development, and demand and market acceptance for recently introduced services
and products over the Internet remains uncertain. We cannot predict the extent
to which consumers will be willing to shift their gaming habits to online
casinos.





The
Internet may not become a viable commercial marketplace for a number of reasons,
including potentially inadequate development of the necessary network
infrastructure, delayed development of enabling technologies and inadequate
performance improvements. In addition, the Internet's viability as a commercial
marketplace could be adversely affected by delays in the development of services
or by increased government regulation. Changes in or insufficient availability
of telecommunications services to support the Internet also could result in
slower response times and adversely affect usage of the Internet generally and
us in particular. Moreover, adverse publicity and consumer concern about the
security of transactions conducted on the Internet and the privacy of users may
also inhibit the growth of commerce on the Internet. If the use of the Internet
does not continue to grow or grows more slowly than expected, or if the
infrastructure for the Internet does not effectively support growth that may
occur, we would be materially adversely affected.





Need
for Additional Funds





Our
capital requirements depend on several factors, including the rate of market
acceptance, the ability to develop new software, the cost of website development
and upgrades, and other factors. We are in immediate need of further working
capital and are considering options with respect to financing in the form of
debt, equity or a combination thereof. There can be no assurance that financing
will be available in amounts or on terms acceptable to us, if at all. If equity
securities are issued in connection with a financing, dilution to our
shareholders may result, and if additional funds are raised through the
incurrence of debt, we may become subject to restrictions on its operations and
finances.





-6-
 Table of Contents





Rapid
Technological Change





To become
and remain competitive, we intend to develop, enhance and improve the
responsiveness, functionality and features of proposed sites and develop new
features to meet customer needs. The Internet is characterized by rapid
technological change, changes in user and customer requirements and preferences,
frequent new product and service introductions and the emergence of new industry
standards and practices that could render our proposed websites, technology and
systems obsolete. Our success will depend, in part, on its ability to license
leading technologies useful in its business, enhance its proposed services,
develop new services and technology that address the needs of its proposed
customers, and respond to technological advances and emerging industry standards
and practices on a cost-effective and timely basis. If we are unable to use new
technologies effectively or develop and adapt its websites, proprietary
technology and transaction-processing systems to customer requirements or
emerging industry standards, it would be materially adversely
affected.





Dependence
on the Communications Infrastructure of the Internet for Transmitting
Information





Our
future success will depend, in significant part, upon the maintenance and growth
of this infrastructure and any failure or interruption may have a material
adverse effect on our business. To the extent that this infrastructure continues
to experience an increased numbers of users, increased frequency of use and
increased bandwidth requirements of users, we cannot be certain that this
infrastructure will be able to support the demands placed on it or that the
performance or reliability of this infrastructure will not be adversely
affected. Outages and delays in sending or receiving data as a result of damage
to portions of this infrastructure could also affect our ability to transmit
information.





Online
Security Risks





If the
poker software and controls that we license are unable to handle online security
risks,our business will be adversely affected. These systems use packet filters,
firewalls, and proxy servers, which are all designed to control and filter the
data. However, advances in computer capabilities, new discoveries in the field
of cryptography, or other events or developments may make it easier for someone
to compromise or breach the technology used by us and our sub-licensees to
protect subscribers' transaction data. If such a breach of security were to
occur, we could cause interruptions in services and loss of data or cessation in
service. This may also allow someone to introduce a "virus", or other harmful
component causing an interruption or malfunction.





Dividends





For the
foreseeable future, we do not intend to pay any dividends on our common stock.
Any future decision with respect to dividends will depend upon our future
earnings, future capital needs and operating and financial condition, among
other factors.





Broker-dealers
may be discouraged from effecting transactions in our shares because they are
considered penny stocks and are subject to the penny stock rules.





Rules
15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as
amended, impose sales practice and disclosure requirements on NASD
broker-dealers who make a market in "a penny stock". A penny stock generally
includes any non-NASDAQ equity security that has a market price of less than
$5.00 per share. Our shares were quoted on the NASD OTC Bulletin Board, and the
price of our shares ranged from $0.16 (low) to $0.51 (high) during the year
ended December 31, 2007. The closing price of our shares on December, 31, 2007
was $0.16. Purchases and sales of our shares are generally facilitated by NASD
broker-dealers who act as market makers for our shares. The additional sales
practice and disclosure requirements imposed upon broker-dealers may discourage
broker-dealers from effecting transactions in our shares, which could severely
limit the market liquidity of the shares and impede the sale of our shares in
the secondary market.





Under the
penny stock regulations, a broker-dealer selling penny stock to anyone other
than an established customer or "accredited investor" (generally, an individual
with net worth in excess of $1,000,000 or an annual income exceeding $200,000,
or $300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser's written consent
to the transaction prior to sale, unless the broker-dealer or the transaction is
otherwise exempt.





-7-
 Table of Contents





In
addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.





Other
Information





Neither
the Company nor any of its subsidiaries engaged in any research and development
activities during 2007. We do not manufacture any products or engage in any
activity that requires compliance with environmental laws.





Employees





We
currently do not have any employees other than the Company’s
Directors.





Reports
to Securities Holders





We
provide an annual report that includes our audited financial information to our
shareholders upon written request. We also make our financial information
equally available to any interested parties or investors through compliance with
the disclosure rules of the Securities Exchange Act of 1934. We are subject to
disclosure filing requirements including filing a Form 10-KSB annually and Form
10-QSB quarterly. In addition, we will file Form 8-K and other proxy and
information statements from time to time as required.





The
public may read and copy any materials that we file with the Securities and
Exchange Commission, ("SEC"), at the SEC's Public Reference Room at 100 F Street
NE, Washington, DC 20549. The public may obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an Internet site (http://www.sec.gov) that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC.








Item
      2.
            Description
      of Property





In 2006,
we moved our offices to #206-388 Drake Street, Vancouver where we share offices
provided by one of our shareholders.








Item
      3.
            Legal
      Proceedings





As at
December 31, 2007, no federal, state or local governmental agency is presently
contemplating any proceedings against us. Other than as described above, no
director, executive officer or affiliate thereof or owner of record or
beneficially of more than five percent of our common stock is a party adverse to
or has a material interest adverse to us in any proceeding.








Item
      4.
            Submission
      of Matterstoa Vote of Security
  Holders





No
matters were submitted to a vote of security holders during the year of
2007.





-8-
 Table of Contents





PART
II





Item
      5.
            Market
      for Common Equity and Related Stockholders
      Matters





Market
Information





There is
no "established trading market" for shares of our common stock. As of December
31, 2007 common stock was quoted on the NASD OTC Bulletin Board under the symbol
"STHL". No assurance can be given that any "established trading market" for our
common stock will develop or be maintained.





The range
of high and low closing bid quotations for our common stock during each quarter
of the calendar years ended December 31 2007 and 2006, is shown below, as quoted
by Reuters. Prices are inter-dealer quotations, without retail mark-up, markdown
or commissions and may not represent actual transactions.





Stock
Quotations


Quarter
      Ended
            High
      Bid
            Low
      BidMarch
      31 2006
            0.75
            0.75June
      30 2006
            0.50
            0.50September
      2006
            0.45
            0.40December
      2006
            0.45
            0.35March
      31 2007
            0.30
            0.30June
      30 2007
            0.30
            0.30September
      2007
            0.25
            0.25December
      2007
            0.16
            0.16








The
future sale of our presently outstanding "unregistered" and "restricted" common
stock by present members of management and persons who own more than five
percent of our outstanding voting securities may have an adverse effect on any
"established trading market" that may develop in the shares of our common
stock.





Holders





As of
December 31, 2007, we had 47 shareholders of record of common stock, including
shares held by brokerage clearing houses, depositories or otherwise in
unregistered form. We do not know the beneficial owners of such
shares.





Item
      6.
            Management's
      Discussion and Analysis of Plan of
  Operations





You
should read the following discussion and analysis in conjunction with the
audited consolidated financial statements and notes thereto appearing elsewhere
in this annual report on Form 10-KSB.





Results
of Operations





Year
ended December 31, 2007 Compared to Year ended December 31, 2006





General
Description


Our
current business strategy is to develop our own poker software and market the
software to on-line gaming sites worldwide.





Revenue


We had
continuing revenue of $nil and discontinued operations revenue of $nil for the
year ended December 31, 2007 and 2006.





-9-
 Table of Contents





General and Administrative
Operating Expenses


Our total
general and administrative operating expenses were $170,950 in fiscal 2007,
compared to $66,281 in fiscal 2006. The increase is due to higher management and
consultant fees in relation to business operations and SEC filings. The Company
was able to cut back on corporate promotion and rent during the year ended
December 31, 2007.





Net loss


Net loss
for fiscal 2007 was $170,950 compared to net loss of $36,575 in fiscal 2006. The
change is due to increase of $92,018 from management and consultant fees and
$29,684 decrease from sale of discontinued operations. We had basic net loss of
$0.22 per share in 2007 compared to loss of $0.05 per share in
2006.





Liquidity
and Capital Resources





On
December 31, 2007, our working capital deficit was $376,314 compared to $212,546
at December 31, 2006. At December 31, 2007, the Company had cash totaling
$66,273 compared to $13,462 at December 31, 2006.  We are in immediate
need of further working capital and are considering options with respect to
financing in the form of debt, equity or a combination thereof.





Net cash
increase for the year ended December 31, 2007 was $52,811.  The
increase in cash was mainly due to $185,000 provided by financing activities for
operating expenses.





The
Company's ability to continue as a going concern and fund operations in 2007 is
contingent upon its ability to raise funds through equity or debt
financing.





-10-
 Table of Contents





Item
      7.
            Financial
      Statements and Supplementary
Data








SYNTHENOL
INC.





(A
Development Stage Company)





CONSOLIDATED
FINANCIAL STATEMENTS





December
31, 2007





-11-
 Table of Contents




D
      A L E   M A T H E S O N
            
            Partnership
      of:Vancouver
            Robert
      J. Burkat, Inc.
            James
      F. Carr-Hilton Ltd.
            Kenneth
      P. Chong Inc.C A R R -  H I L T O N  L A B O N T E  
      L L P
            
            Alvin
      F. Dale Ltd.
            Barry
      S. Hartley, Inc.
            Reginald
      J. LaBonte Ltd.Robert
      J. Matheson, Inc.
            Rakesh
      I. Patel Inc.D
      M C
      L                           
        C H A R T E R E D   A C C O U N T A N T
      S
            South
      Surrey
            Micheal
      K. Braun Inc.
            Peter
      J. Donaldson, Inc.Port
      Coquitlam
            Wilfred
      A. Jacobson, Inc.
            Fraser
      G. Ross, Ltd.
            Brian A. Shaw
      Inc.








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the
Stockholders and Board of Directors of


Synthenol
Inc.





We have
audited the accompanying consolidated balance sheet of Synthenol Inc., a
development stage company, as of December 31, 2007 and 2006 and the consolidated
statements of operations, stockholders’ deficiency, and cash flows for the years
then ended and for the period from January 1, 2004 (date of inception of
development stage) to December 31, 2007. These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our
audits.  The consolidated financial statements as of December 31, 2005
and for the period from January 1, 2004 (date of inception of development stage)
to December 31, 2005 were audited by other auditors whose report dated March 1,
2006, on those statements included an explanatory paragraph that described the
Company’s working capital deficiency with no established source of revenue and
its dependence on its ability to raise capital from shareholders or other
sources to sustain operations, discussed in Note 1 to the financial statements.
The consolidated financial statements for the period January 1, 2004 (date of
inception of development stage) to December 31, 2005 reflect a total net loss of
$849,780 of the related cumulative totals.  Our opinion, insofar as it
relates to amounts included for such prior periods, is based solely on the
reports of such other auditors.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement.  The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, based on our audits and the reports of other auditors, these
consolidated financial statements present fairly, in all material respects, the
financial position of Synthenol Inc. as of December 31, 2007 and 2006 and the
results of its operations and its cash flows for the years then ended and for
the period from January 1, 2004 (date of inception of development stage) to
December 31, 2007, in conformity with accounting principles generally accepted
in the United States of America.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 1 to the
financial statements, to date the Company has reported losses since inception
from operations and requires additional funds to meet its obligations and fund
the costs of its operations.  These factors raise substantial doubt
about the Company’s ability to continue as a going
concern.  Management’s plans in this regard are described in Note
1.  The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.








/s/DMCL





DALE
MATHESON CARR-HILTON LABONTE LLP


Chartered
Accountants





Vancouver,
Canada


March 17,
2008





Vancouver                   Suite
1500 – 1150 West Pender Street, Vancouver, B.C., Canada  V6E 4G1, Tel:
604 687 4747 Ÿ
Fax: 604 689 2778 – Main Reception


South
Surrey                  Suite
301 – 1656 Martin Drive, White Rock, B.C., Canada V4A 6E7, Tel: 604 531 1154
Ÿ
Fax: 604 538 2613


Port
Coquitlam              Suite
700 – 2755 Lougheed Highway, Port Coquitlam, B.C., Canada V3B 5Y9, Tel: 604 941
8266 Ÿ Fax:
604 941 0971





-12-
 Table of Contents





SYNTHENOL
INC.


(A
Development Stage Company)


CONSOLIDATED
BALANCE SHEETS


December
      31,
              
              
              December
      31,2007
              
              
              2006ASSETS
 CurrentCash
              
              $
              66,273
              
              
              $
              13,462$
              66,273
              
              
              $
              13,462
 LIABILITIES AND STOCKHOLDERS’
      DEFICIENCY
 CurrentAccounts
      payable and accrued liabilities (Note 4)
              
              $
              133,508
              
              
              $
              118,577Notes
      payable (Note 3)
              
              
              309,079
              
              
              
              107,431442,587
              
              
              
              226,008Contingency
      and commitments (Notes 1 and 3)Subsequent
      event (Note 9)Capital
      stock (Note 5)Preferred
      stock, $0.01 par value, 5,000,000 shares authorized, no shares issued or
      outstandingCommon
      stock, $0.01 par value, 100,000,000 shares authorized 731,521 (December
      31, 2006: 731,521) shares issued and outstanding (Note 5)
              
              
              7,315
              
              
              
              7,315Treasury
      stock, at cost, 540 shares (December 31, 2006: 540)
              
              
              (270
              )
              
              
              (270
              )Additional
      paid-in capital
              
              
              1,974,187
              
              
              
              1,953,614Accumulated
      other comprehensive income
              
              
              5,213
              
              
              
              18,604Deficit
              
              
              (1,305,454
              )
              
              
              (1,305,454
              )Deficit
      accumulated during the development stage
              
              
              (1,057,305
              )
              
              
              (886,355
              )(376,314
              )
              
              
              (212,546
              )$
              66,273
              
              
              $
              13,462


SEE
      ACCOMPANYING NOTES
            Page
      13


Table of Contents




SYNTHENOL
INC.


(A Development Stage
Company)


CONSOLIDATED
STATEMENTS OF OPERATIONS





January
      1,2004
      (Date ofInception
      of theDevelopmentStage)
      toDecember
      31,2007
            
            
            2006
            
            
            2007General
      and administrative expensesAmortization
            
            $
            -
            
            
            $
            -
            
            
            $
            27,077Bad
      debt
            
            
            -
            
            
            
            478
            
            
            
            525Corporate
      promotion
            
            
            -
            
            
            
            68
            
            
            
            13,920Finance
      charges (Note 3)
            
            
            11,285
            
            
            
            -
            
            
            
            11,285Insurance
            
            
            -
            
            
            
            -
            
            
            
            15,901Interest
      on notes payable
            
            
            18,276
            
            
            
            5,152
            
            
            
            23,428Management
      and consultant fees (Note 4)
            
            
            109,741
            
            
            
            17,723
            
            
            
            224,599Office
      and miscellaneous
            
            
            4,160
            
            
            
            11,153
            
            
            
            46,419Professional
      fees
            
            
            27,488
            
            
            
            31,340
            
            
            
            235,207Rent
            
            
            -
            
            
            
            367
            
            
            
            16,311Wages
            
            
            -
            
            
            
            -
            
            
            
            84,258Loss
      before other items
            
            
            (170,950
            )
            
            
            (66,281
            )
            
            
            (698,929
            )Other
      itemsLoss
      on disposition of equipment
            
            
            -
            
            
            
            -
            
            
            
            (15,028
            )Write-down
      of intangible assets
            
            
            -
            
            
            
            -
            
            
            
            (50,001
            )Write-off
      of notes payable
            
            
            -
            
            
            
            -
            
            
            
            14,823Gain
      on settlement of lawsuit
            
            
            -
            
            
            
            -
            
            
            
            44,445Loss
      from continuing operations
            
            
            (170,950
            )
            
            
            (66,281
            )
            
            
            (704,690
            )Operating
      income (loss) from discontinued operations (Schedule 1)
            
            
            -
            
            
            
            22
            
            
            
            (382,299
            )Gain
      on sale of discontinued operations (Note 6)
            
            
            -
            
            
            
            29,684
            
            
            
            29,684Net
      loss
            
            $
            (170,950
            )
            
            $
            (36,575
            )
            
            $
            (1,057,305
            )Basic
      and diluted loss per common share
            
            $
            (0.23
            )
            
            $
            (0.05
            )Weighted
      average number of common share outstanding – basic and
    diluted
            
            
            731,521
            
            
            
            728,096Comprehensive
      lossNet
      loss
            
            $
            (170,950
            )
            
            $
            (36,575
            )
            
            $
            (1,057,305
            )Foreign
      currency translation adjustment
            
            
            (13,391
            )
            
            
            563
            
            
            
            5,213Total
      comprehensive loss
            
            $
            (184,341
            )
            
            $
            (36,012
            )
            
            $
            (1,052,092
            )




SEE
      ACCOMPANYING NOTES
            Page
      14


Table of Contents




SYNTHENOL
INC.


(A Development Stage
Company)


CONSOLIDATED
STATEMENTS OF CASH FLOWS





January
      1, 2004 (Dateof
      Inception of theDevelopmentStage)
      toDecember
      31,2007
            
            
            2006
            
            
            2007Cash
      flows from operating activitiesNet
      loss from continuing operations
            
            $
            (170,950
            )
            
            $
            (66,281
            )
            
            $
            (704,690
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Finance
      charges
            
            
            11,285
            
            
            
            -
            
            
            
            11,285Accrued
      interest on notes payable
            
            
            18,276
            
            
            
            5,152
            
            
            
            23,428Amortization
            
            
            -
            
            
            
            -
            
            
            
            27,077Foreign
      exchange effect on notes payable
            
            
            7,660
            
            
            
            441
            
            
            
            8,101Issuance
      of common stock for services
            
            
            -
            
            
            
            -
            
            
            
            1,000Stock-based
      compensation
            
            
            -
            
            
            
            -
            
            
            
            4,460Loss
      on disposition of equipment
            
            
            -
            
            
            
            -
            
            
            
            225,184Write-down
      of intangible assets
            
            
            -
            
            
            
            -
            
            
            
            360,001Write-off
      of notes payable
            
            
            -
            
            
            
            -
            
            
            
            (18,729
            )Gain
      on settlement of lawsuit
            
            
            -
            
            
            
            -
            
            
            
            (44,445
            )Changes
      in non-cash working capital items:Receivables
            
            
            -
            
            
            
            2,250
            
            
            
            -Accounts
      payable and accrued liabilities
            
            
            14,931
            
            
            
            15,634
            
            
            
            133,508Cash
      provided by (used in) continuing operations
            
            
            (118,798
            )
            
            
            (42,804
            )
            
            
            26,180Discontinued
      operations
            
            
            -
            
            
            
            (1,063
            )
            
            
            (553,150
            )Net
      cash used in operating activities
            
            
            (118,798
            )
            
            
            (43,867
            )
            
            
            (526,970
            )Cash
      flows from investing activitiesProceeds
      from sale of subsidiary
            
            
            -
            
            
            
            1
            
            
            
            1Proceeds
      from assets disposition
            
            
            -
            
            
            
            -
            
            
            
            5,458Purchase
      of equipment
            
            
            -
            
            
            
            -
            
            
            
            (5,808
            )Net
      cash provided by (used in) investing activities
            
            
            -
            
            
            
            1
            
            
            
            (349
            )Cash
      flows from financing activitiesProceeds
      from notes payable
            
            
            185,000
            
            
            
            50,000
            
            
            
            398,614Proceeds
      from issuance of common stock
            
            
            -
            
            
            
            -
            
            
            
            1,000Net
      cash provided by financing activities
            
            
            185,000
            
            
            
            50,000
            
            
            
            399,614Effect
      of exchange rate changes on cash
            
            
            (13,391
            )
            
            
            563
            
            
            
            (15,539
            )Change
      in cash from continuing operations
            
            
            52,811
            
            
            
            6,697
            
            
            
            (143,244
            )Cash,
      beginning
            
            
            13,462
            
            
            
            6,765
            
            
            
            209,517Cash,
      ending
            
            $
            66,273
            
            
            $
            13,462
            
            
            $
            66,273





Supplemental
cash flow information (Note 7)





SEE
      ACCOMPANYING NOTES
            Page
      15


Table of Contents




SYNTHENOL
INC.


(A Development Stage
Company)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIENCY





DeficitAccumulated
            
            
            
            
            
            AccumulatedAdditional
            
            
            
            
            
            Other
            
            
            
            
            
            During
      theCommon
      Shares
            
            
            Treasury
            
            
            Paid-in
            
            
            Subscriptions
            
            
            Comprehensive
            
            
            
            
            
            DevelopmentNumber
            
            
            Amount
            
            
            Stock
            
            
            Capital
            
            
            Received
            
            
            Income
            
            
            Deficit
            
            
            Stage
            
            
            TotalMay
      3, 1989 ( Inception) through December 31, 1997
            
            
            60,021
            
            
            $
            600
            
            
            $
            -
            
            
            $
            9,400
            
            
            $
            -
            
            
            $
            -
            
            
            $
            (10,000
            )
            
            $
            -
            
            
            $
            -Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (148,931
            )
            
            
            -
            
            
            
            (148,931
            )Shares
      issued for cash
            
            
            180,000
            
            
            
            1,800
            
            
            
            -
            
            
            
            148,200
            
            
            
            2,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            152,000Balance
      at December 31, 1998
            
            
            240,021
            
            
            
            2,400
            
            
            
            -
            
            
            
            157,600
            
            
            
            2,000
            
            
            
            -
            
            
            
            (158,931
            )
            
            
            -
            
            
            
            3,069Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (511,587
            )
            
            
            -
            
            
            
            (511,587
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (14,130
            )
            
            
            -
            
            
            
            -
            
            
            
            (14,130
            )Share
      issued for services
            
            
            15,000
            
            
            
            150
            
            
            
            -
            
            
            
            124,850
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            125,000Subscription
      receivable
            
            
            12,000
            
            
            
            120
            
            
            
            -
            
            
            
            99,880
            
            
            
            8,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            108,000Share
      issued for intangible assets
            
            
            15,000
            
            
            
            150
            
            
            
            -
            
            
            
            124,850
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            125,000Balance
      at December 31, 1999
            
            
            282,021
            
            
            
            2,820
            
            
            
            -
            
            
            
            507,180
            
            
            
            10,000
            
            
            
            (14,130
            )
            
            
            (670,518
            )
            
            
            -
            
            
            
            (164,648
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (339,063
            )
            
            
            -
            
            
            
            (339,063
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            18,885
            
            
            
            -
            
            
            
            -
            
            
            
            18,885Shares
      issued for cash
            
            
            21,600
            
            
            
            216
            
            
            
            -
            
            
            
            259,784
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            260,000Shares
      issued for settlement of debt
            
            
            4,500
            
            
            
            45
            
            
            
            -
            
            
            
            174,955
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            175,000Subscription
      receivable
            
            
            600
            
            
            
            6
            
            
            
            -
            
            
            
            9,994
            
            
            
            (200
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            9,800Subscription
      received
            
            
            30,000
            
            
            
            300
            
            
            
            -
            
            
            
            499,700
            
            
            
            (9,350
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            490,650Stock
      option benefit
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            14,235
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            14,235Balance
      at December 31, 2000
            
            
            338,721
            
            
            
            3,387
            
            
            
            -
            
            
            
            1,465,848
            
            
            
            450
            
            
            
            4,755
            
            
            
            (1,009,581
            )
            
            
            -
            
            
            
            464,859Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            375,621
            
            
            
            -
            
            
            
            375,621Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            13,629
            
            
            
            -
            
            
            
            -
            
            
            
            13,629Shares
      issued for cash
            
            
            300
            
            
            
            3
            
            
            
            -
            
            
            
            2,247
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,250Subscription
      received
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            200
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            200Stock
      option benefit
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            118,920
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            118,920Repurchase
      of common stock for treasury
            
            
            -
            
            
            
            -
            
            
            
            (270
            )
            
            
            (6,611
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (6,881
            )Balance
      at December 31, 2001
            
            
            339,021
            
            
            
            3,390
            
            
            
            (270
            )
            
            
            1,580,404
            
            
            
            650
            
            
            
            18,384
            
            
            
            (633,960
            )
            
            
            -
            
            
            
            968,598Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            (63,864
            )
            
            
            -
            
            
            
            (63,864
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            (1,155
            )
            
            
            
            
            
            
            -
            
            
            
            (1,155
            )Shares
      issued for cash
            
            
            4,500
            
            
            
            45
            
            
            
            -
            
            
            
            33,705
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            33,750Balance
      at December 31, 2002
            
            
            343,521
            
            
            $
            3,435
            
            
            $
            (270
            )
            
            $
            1,614,109
            
            
            $
            650
            
            
            $
            17,229
            
            
            $
            (697,824
            )
            
            $
            -
            
            
            $
            937,329




SEE
      ACCOMPANYING NOTES
            Page
      16


Table of Contents




SYNTHENOL
INC.


(A Development Stage
Company)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIENCY





DeficitAccumulated
            
            
            
            
            
            AccumulatedAdditional
            
            
            
            
            
            Other
            
            
            
            
            
            During
      theCommon
      Shares
            
            
            Treasury
            
            
            Paid-in
            
            
            Subscriptions
            
            
            Comprehensive
            
            
            
            
            
            DevelopmentNumber
            
            
            Amount
            
            
            Stock
            
            
            Capital
            
            
            Received
            
            
            Income
            
            
            Deficit
            
            
            Stage
            
            
            TotalBalance
      at December 31, 2002
            
            
            343,521
            
            
            
            3,435
            
            
            
            (270
            )
            
            
            1,614,109
            
            
            
            650
            
            
            
            17,229
            
            
            
            (697,824
            )
            
            
            -
            
            
            
            937,329Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (607,630
            )
            
            
            -
            
            
            
            (607,630
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,752
            
            
            
            -
            
            
            
            -
            
            
            
            1,752Stock
      option benefit
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            11,800
            
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            11,800Cancellation
      of agreement
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            
            
            
            
            (650
            )
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (650
            )Share
      issues for cash on exercise of options
            
            
            12,000
            
            
            
            120
            
            
            
            -
            
            
            
            11,880
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            12,000Share
      issues for consulting services
            
            
            45,000
            
            
            
            450
            
            
            
            -
            
            
            
            49,675
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            50,125Share
      issues for intangible assets
            
            
            60,000
            
            
            
            600
            
            
            
            -
            
            
            
            104,400
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            105,000Share
      issued for software
            
            
            60,000
            
            
            
            600
            
            
            
            -
            
            
            
            53,400
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            54,000Balance
      at December 31, 2003
            
            
            520,521
            
            
            
            5,205
            
            
            
            (270
            )
            
            
            1,845,264
            
            
            
            -
            
            
            
            18,981
            
            
            
            (1,305,454
            )
            
            
            -
            
            
            
            563,726Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (795,364
            )
            
            
            (795,364
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (238
            )
            
            
            -
            
            
            
            -
            
            
            
            (238
            )Stock-based
      compensation
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,460
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            4,460Shares
      issued for cash on exercise of options
            
            
            1,000
            
            
            
            10
            
            
            
            -
            
            
            
            990
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,000Share
      issued for debt
            
            
            140,000
            
            
            
            1,400
            
            
            
            -
            
            
            
            68,600
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            70,000Share
      issued forconsulting
      services
            
            
            2,000
            
            
            
            20
            
            
            
            -
            
            
            
            980
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1,000Balance
      at December 31, 2004
            
            
            663,521
            
            
            
            6,635
            
            
            
            (270
            )
            
            
            1,920,294
            
            
            
            -
            
            
            
            18,743
            
            
            
            (1,305,454
            )
            
            
            (795,364
            )
            
            
            (155,416
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (54,416
            )
            
            
            (54,416
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (702
            )
            
            
            -
            
            
            
            -
            
            
            
            (702
            )Share
      issues for consulting services
            
            
            18,000
            
            
            
            180
            
            
            
            -
            
            
            
            8,820
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            9,000Balance
      at December 31, 2005
            
            
            681,521
            
            
            
            6,815
            
            
            
            (270
            )
            
            
            1,929,114
            
            
            
            -
            
            
            
            18,041
            
            
            
            (1,305,454
            )
            
            
            (849,780
            )
            
            
            (201,534
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (36,575
            )
            
            
            (36,575
            )Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            563
            
            
            
            -
            
            
            
            -
            
            
            
            563Share
      issues for debt
            
            
            50,000
            
            
            
            500
            
            
            
            -
            
            
            
            24,500
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            25,000Balance
      at December 31, 2006
            
            
            731,521
            
            
            $
            7,315
            
            
            $
            (270
            )
            
            $
            1,953,614
            
            
            $
            -
            
            
            $
            18,604
            
            
            $
            (1,305,454
            )
            
            $
            (886,355
            )
            
            $
            (212,546
            )




SEE
      ACCOMPANYING NOTES
            Page
      17


Table of Contents




SYNTHENOL
INC.


(A Development Stage
Company)


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIENCY





DeficitAccumulated
            
            
            
            
            
            AccumulatedAdditional
            
            
            
            
            
            Other
            
            
            
            
            
            During
      theCommon
      Shares
            
            
            Treasury
            
            
            Paid-in
            
            
            Subscriptions
            
            
            Comprehensive
            
            
            
            
            
            DevelopmentNumber
            
            
            Amount
            
            
            Stock
            
            
            Capital
            
            
            Received
            
            
            Income
            
            
            Deficit
            
            
            Stage
            
            
            TotalBalance
      at December 31, 2006
            
            
            731,521
            
            
            $
            7,315
            
            
            $
            (270
            )
            
            $
            1,953,614
            
            
            $
            -
            
            
            $
            18,604
            
            
            $
            (1,305,454
            )
            
            $
            (886,355
            )
            
            $
            (212,546
            )Net
      loss
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (170,950
            )
            
            
            (170,950
            )Discount
      on notes payable
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            20,573
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            20,573Foreign
      currency translation adjustment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (13,391
            )
            
            
            -
            
            
            
            -
            
            
            
            (13,391
            )Balance
      at December 31, 2007
            
            
            731,521
            
            
            $
            7,315
            
            
            $
            (270
            )
            
            $
            1,974,187
            
            
            $
            -
            
            
            $
            5,213
            
            
            $
            (1,305,454
            )
            
            $
            (1,057,305
            )
            
            $
            (376,314
            )




SEE
      ACCOMPANYING NOTES
            Page
      18


Table of Contents




SYNTHENOL
      INC.
            Schedule
      1


(A
Development Stage Company)


STATEMENT
OF OPERATIONS FROM DISCONTINUED OPERATIONS





January
      1, 2004(Date
      ofInception
      of theDevelopmentStage)
      toDecember
      31,2007
            
            
            2006
            
            
            2007Amortization
            
            $
            -
            
            
            $
            -
            
            
            $
            57,051Management
      and consulting fees
            
            
            -
            
            
            
            -
            
            
            
            165Professional
      fees
            
            
            -
            
            
            
            -
            
            
            
            5,606Office
      supplies and services
            
            
            -
            
            
            
            (22
            )
            
            
            2,975Royalty,
      software and advertising
            
            
            -
            
            
            
            -
            
            
            
            69,251-
            
            
            
            (22
            )
            
            
            (135,048
            )Write-down
      of intangible assets
            
            
            -
            
            
            
            -
            
            
            
            (155,000
            )Forgiveness
      of debts
            
            
            -
            
            
            
            -
            
            
            
            1,953Loss
      on disposition of equipment
            
            
            -
            
            
            
            -
            
            
            
            (105,078
            )Incidental
      revenue
            
            
            -
            
            
            
            -
            
            
            
            10,874-
            
            
            
            -
            
            
            
            (247,251
            )Operating
      income (loss) from discontinued operations
            
            
            -
            
            
            
            22
            
            
            
            (382,299
            )Gain
      on disposition of subsidiary (Note 6)
            
            
            -
            
            
            
            29,684
            
            
            
            29,684Net
      income (loss)
            
            $
            -
            
            
            $
            29,706
            
            
            $
            (352,615
            )




SEE
      ACCOMPANYING NOTES
            Page
      19


Table of Contents


SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note
      1
            Nature and Continuance
      of Operations





Synthenol
Inc. (the “Company”) was incorporated under the laws of the State of Florida on
May 3, 1989 as Sparta Ventures Corp. and remained inactive until June 27,
1998.  The name was changed to Thermal Ablation Technologies
Corporation on October 8, 1998 and then to Poker.com, Inc. on August 10,
1999.  On September 15, 2003, the Company changed its name to
LegalPlay Entertainment Inc.  The Company’s business to December 31,
2003 was primarily related to the operations of online gaming.  In
2004, the Company discontinued the online gaming operations and redirected its
business strategy to acquisition of new poker software and market the software
to on-line gaming sites worldwide. The Company is a development stage company as
defined by Statement of Financial Accounting Standards (“SFAS”) No. 7,
“Development Stage Enterprises.”





At the
Annual General Meeting on November 8, 2006, the shareholders of the Company
passed a motion approving change the Company’s name to Synthenol Inc. effective
December 18, 2006.





These
financial statements have been prepared in accordance with generally accepted
accounting principles applicable to a going concern, which assumes that the
Company will be able to meet its obligations and continue its operations for its
next fiscal year.  Realization values may be substantially different
from carrying values as shown and these financial statements do not give effect
to adjustments that would be necessary to the carrying values and classification
of assets and liabilities should the Company be unable to continue as a going
concern.  At December 31, 2007, the Company has accumulated losses of
$2,362,759 since its inception, has a working capital deficiency of $376,314 and
expects to incur further losses in the development of its business, all of which
casts substantial doubt about the Company’s ability to continue as a going
concern.  The Company’s ability to continue as a going concern is
dependent upon its ability to generate future profitable operations and/or to
obtain the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come
due.  Management has no formal plan in place to address this concern
but considers that the Company will be able to obtain additional funds by equity
financing and/or related party advances; however there is no assurance of
additional funding being available.





Note
      2
            Summary of Significant
      Accounting Policies





a)
            Basis
      of Presentation





The
financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States of America (“US
GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year-end is
December 31.




-20-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note 2
            Summary
      of Significant Accounting Policies –
  (cont’d)





b)
            Principles of
      Consolidation





These
consolidated financial statements include the accounts of Synthenol Inc. and its
wholly-owned subsidiaries, Casino Marketing S.A., a Costa Rican company and
564448 B.C. Ltd., a Canadian company. The consolidated financial statements also
include the accounts of Skill Poker.com Inc. ("Skill Poker"), a Washington
State, U.S.A. company, which was a formerly wholly-owned subsidiary, until March
1, 2006 (Note 6). All inter-company balances and transactions have been
eliminated upon consolidation.





c)
            Use of
      Estimates





The
preparation of financial statements in conformity with US GAAP requires
management to make certain estimates and assumptions that affect the reported
amounts and timing of revenues and expenses, the reported amounts and
classification of assets and liabilities, and disclosure of contingent assets
and liabilities. The Company’s actual results could vary materially from
management’s estimates and assumptions. Significant areas requiring the use of
management estimates relate to the determination expected tax rates for future
income tax recoveries and determining the fair values of financial
instruments.





d)
            Foreign Currency
      Translation





The
Company's functional currency is the Canadian dollar. The financial statements
of the Company are translated to United States dollar equivalents in accordance
with SFAS No. 52,“Foreign Currency Translation”. Monetary assets and liabilities
denominated in foreign currencies are translated into United States dollar
equivalents at rates of exchange in effect at the balance sheet date. Average
rates for the year are used to translate revenues and expenses. The cumulative
translation adjustment is reported as a separate component of accumulated other
comprehensive income, whereas gains and losses arising from foreign currency
translations are included in results of operations.





e)
            Other Comprehensive
      Income





SFAS No.
130 “Reporting Comprehensive Income,” establishes standards for the reporting
and display of comprehensive income and its components in the financial
statements. During the years ended December 31, 2007 and 2006, the only
component of comprehensive income was foreign currency translation
adjustments.


-21-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note 2
            Summary
      of Significant Accounting Policies –
  (cont’d)





f)
            Income
      Taxes





The
Company uses the asset and liability method of accounting for income taxes
pursuant to SFAS No. 109 "Accounting for Income Taxes".  Under this
method, deferred income tax assets and liabilities are recognized for the future
tax consequences attributable to temporary differences between the financial
statements carrying amounts of assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled.





The
Company adopted the provisions of Financial Accounting Standards Board (“FASB”)
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes (“FIN 48”),
on January 1, 2007. Previously, the Company had accounted for tax contingencies
in accordance with SFAS No.5, Accounting for Contingencies. As required by
Interpretation 48, which clarifies SFAS No. 109, Accounting for Income Taxes,
the Company recognizes the financial statement benefit of a tax position only
after determining that the relevant tax authority would make more likely than
not sustain the position following an audit. For tax positions meeting this
standard, the amount recognized in the financial statements is the largest
benefit that has a greater than 50 percent likelihood of being realized upon
ultimate settlement with the relevant tax authority. At the adoption date, the
Company applied Interpretation 48 to all tax positions for which the statute of
limitations remained open. The adoption of FIN 48 did not have a material impact
in the consolidated financial statements during the year ended December 31,
2007.





g)
            Basic and Diluted Loss
      Per Share





The
Company reports basic loss per share in accordance with SFAS No. 128, “Earnings
per Share”.  Basic loss per share is computed using the weighted
average number of common shares outstanding during the year. Diluted earnings
per share reflect the potential dilution that could occur if potentially
dilutive securities were exercised or converted to common stock.  The
dilutive effect of options and warrants and their equivalent is computed by
application of the treasury stock method and the effect of convertible
securities by the “if converted” method.  For the years presented,
diluted loss per share is equal to basic loss per share as the effect of the
computations are anti-dilutive.





h)
            Financial
      Instruments





The
carrying value of the Company’s financial instruments, consisting of cash,
accounts payable and accrued liabilities and notes payable approximates their
fair value due to the short




-22-
 Table of Contents


SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note 2
            Summary
      of Significant Accounting Policies –
  (cont’d)





h)
            Financial Instruments– (cont’d)





maturity
of such instruments. Unless otherwise noted, it is management’s opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments.





i)
            Stock-based
      Compensation





The
Company has adopted SFAS No. 123(R), “Share-Based Payment,” which requires the
compensation cost related to share-based payments, such as stock options and
employee stock purchase plans, be recognized in the financial statements based
on the grant-date fair value of the award. As at December 31, 2007 and 2006, the
Company has not adopted a stock option plan and has not granted any stock
options. Accordingly, no stock-based compensation has been recorded to
date.





j)
            Recent Accounting
      Pronouncements





In
February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
159, “The Fair Value Option for Financial Assets and Financial Liabilities”.
This Statement permits entities to choose to measure many financial assets and
financial liabilities at fair value. Unrealized gains and losses on items for
which the fair value option has been elected are reported in earnings. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007, which
for the Company would be the fiscal year beginning January 1, 2008. The Company
is currently assessing the impact of SFAS No. 159 on its financial position and
results of operations..





In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements”. This Statement amends ARB 51 to establish
accounting and reporting standards for the non-controlling (minority) interest
in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a
non-controlling interest in a subsidiary is an ownership interest in the
consolidated entity that should be reported as equity in the consolidated
financial statements. The Company has not yet determined the impact, if any,
that SFAS No. 160 will have on its consolidated financial statements. SFAS
No. 160 is effective for the Company’s fiscal year beginning January 1,
2010.





In
December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”.
SFAS 141 (Revised) establishes principles and requirements for how the acquirer
of a business recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed, and any non-controlling
interest in the acquiree. The statement also provides guidance for recognizing
and measuring the goodwill acquired in the business combination and determines
what information to disclose to enable users of




-23-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note 2
            Summary
      of Significant Accounting Policies –
  (cont’d)





j)
            Recent Accounting
      Pronouncements – (cont’d)





the
financial statements to evaluate the nature and financial effects of the
business combination. The guidance will become effective for the fiscal year
beginning after December 15, 2008.  Management is in the process of
evaluating the impact SFAS 141 (Revised) will have on the Company’s financial
statements upon adoption.






Note
      3
            Notes
      Payable





Notes payable are comprised of the
following:





a)
            A
      loan of $26,649 (December 31, 2006 - $22,690) (CAD$26,417) from Ubiquity
      Management Inc., a company controlled by a former director of the Company,
      is unsecured, bears interest at 5% per annum and is due on demand.
      Interest accrued as of December 31, 2007 is $3,998 (December 31, 2006 -
      $2,269).





b)
            A
      promissory note of $33,290 (December 31, 2006 - $29,589) (CAD$33,000)
      payable to Pannell Kerr Forster, Chartered Accountants, is unsecured,
      bears interest at the Bank of Canada prime rate (6.50% as of December 31,
      2007) and due on demand. Interest accrued as of December 31, 2007 is
      $6,777 (December 31, 2006 -
$1,987).





As of
December 31, 2007, the Company received loans totaling $235,000 (December 31,
2006 - $50,000) from Hokley Limited (“Hokley”), an unrelated third party, as
follows:





a)
            On
      April 6, 2006, the Company received $10,000 from Hokley. The promissory
      note is unsecured and bears interest at 5% per annum. The principal and
      accrued interest is payable by the Company on June 30, 2008 (Note
      9).





b)
            On
      July 31, 2006, the Company received $25,000 from Hokley. The promissory
      note is unsecured and bears interest at 5% per annum. The principal and
      accrued interest is payable by the Company on June 30, 2008 (Note
      9).





c)
            On
      December 15, 2006, the Company received $15,000 from Hokley. The
      promissory note is unsecured and bears interest at 5% per annum. The
      principal and accrued interest is payable by the Company on June 30, 2008
      (Note 9).





d)
            On
      February 26, 2007, the Company received $35,000 from Hokley. The
      promissory note is unsecured and bears interest at 5% per annum. The
      principal and accrued interest is payable by the Company on August 31,
      2008.





e)
            On
      May 15, 2007, the Company received $30,000 from Hokley. The promissory
      note is unsecured and bears interest at 5% per annum. The principal and
      accrued interest is payable by the Company on May 15,
  2008.




-24-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note
      3
            Notes
      Payable–
      (cont’d)





f)
            On
      July 18, 2007, the Company received $30,000 from Hokley. The promissory
      note is unsecured and bears interest at 5% per annum. The principal and
      accrued interest is payable by the Company on July 18,
    2008.





g)
            On
      October 3, 2007, the Company received $30,000 from Hokley. The promissory
      note is unsecured and bears interest at 10% per annum. The principal and
      accrued interest is payable by the Company on October 3,
    2008.





h)
            On
      December 7, 2007, the Company received $60,000 from Hokley. The promissory
      note is unsecured and bears interest at 10% per annum. The principal and
      accrued interest is payable by the Company on December 7,
      2008.





Pursuant
to SFAS No. 157, Fair Value Measurements, management has recognized that the
interest rate on the notes payable (“Notes”) from Hokley is below fair market
value, and has recorded a discount of $20,573 (2006 - $Nil)on the funds received
from Hokley during 2007. This value was recorded as additional paid-in capital
and is being deferred and amortized over the term of the Notes. The carrying
value of the Notes at December 31, 2007 of $225,712 (2006 - $50,000) will be
accreted to the face value over the term of the Notes.





Included
in the notes payable balance at December 31, 2007 is accrued interest and loan
fees of $12,653 (December 31, 2006 - $896) relating to the loans owing to
Hokley.





Note
      4
            Related Party
      Transactions





The
Company incurred the following amounts with directors of the Company and a
former officer of the Company.




January
      1, 2004(Date
      ofInception
      of theDevelopmentYears
      ended
            
            
            Stage)
      toDecember
      31,
            
            
            December
      31,2007
            
            
            2006
            
            
            2007Management
      and consulting fees
            
            $
            12,000
            
            
            $
            12,000
            
            
            $
            94,678Wages
            
            
            -
            
            
            
            -
            
            
            
            1,000$
            12,000
            
            
            $
            12,000
            
            
            $
            95,678




-25-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note 4
            Related
      Party Transactions –
(cont’d)





At
December 31, 2007, included in accounts payable and accrued liabilities is
$31,000 (December 31, 2006 -$19,000) owing to directors and a former officer of
the Company. The amounts owing to directors and a former officer of the Company
at December 31, 2007 and 2006 are unsecured, non-interest bearing and have no
set terms of repayment.





Note
      5
            Capital
      Stock





On
October 31, 2006, the Company declared a one-for-fifty stock rollback of all of
the outstanding common stock, without any change in par value of the shares of
common stock. Common shares issued prior to the effective date of the stock
rollback have been restated to reflect the stock split ratio.





Effective
December 18, 2006, the authorized capital was 100,000,000 common shares with a
par value of $0.01, with 731,521 shares issued and outstanding. The authorized
preferred shares was 5,000,000 with a par value of $0.01 with no shares issued
or outstanding.





Note
      6
            Discontinued
      Operations





On March
1, 2006, the Company determined that it no longer wished to continue with its
Skill Poker business and, as a result, agreed to sell all of the issued and
outstanding shares of Skill Poker.com Inc., a wholly-owned subsidiary, to a
third party for nominal proceeds of $1. As part of the agreement, the purchaser
also assumed all of the liabilities of Skill Poker.com Inc. As such, the Company
recognized a gain on the disposition of its subsidiary.




Proceeds
            
            $
            1Liabilities
      assumed by purchaser of Skill Poker.com Inc.
            
            
            29,683Gain
      on disposition of subsidiary
            
            $
            29,684





Note
      7
            Supplemental Cash Flow
      Information




January
      1, 2004 (Dateof
      Inception of theDevelopmentStage)
      toDecember
      31,2007
            
            
            2006
            
            
            2007Cash
      paid for:Interest
            
            $
            -
            
            
            $
            -
            
            
            $
            -Income
      taxes (recovery)
            
            $
            -
            
            
            $
            -
            
            
            $
            (3,934
            )Common
      shares issued to settle notes payable
            
            $
            -
            
            
            $
            25,000
            
            
            $
            25,000




-26-
 Table of Contents





SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note
      8
            Income
      Taxes





The
Company’s deferred tax assets are as follows:




2007
            
            
            2006Net
      operating loss carryforwards
            
            $
            2,351,000
            
            
            $
            2,191,000Statutory
      tax rate
            
            
            34
            %
            
            
            34
            %Deferred
      tax asset
            
            
            799,340
            
            
            
            744,940Valuation
      allowance
            
            
            (799,340
            )
            
            
            (744,940
            )$
            –
            
            
            $
            –





The
amount taken into income as deferred income tax assets must reflect that portion
of the income tax loss carry forwards that is more likely-than-not to be
realized from future operations.  The Company has chosen to provide a
full valuation allowance against all available income tax loss carry forwards,
regardless of their time of expiry. The net increase in the valuation allowance
during the year ended December 31, 2007 was $54,400.





During
the year ended December 31, 2007, the Company did not recognize any interest and
penalties. Due to the potential offset of the Company’s operating loss
carryforward for any future activity, the amount attributed to interest and
penalties would be immaterial.





No
provision for income taxes has been provided in these financial statements due
to the net loss for the years ended December 31, 2007 and 2006.  At
December 31, 2007, the Company has net operating loss carryforwards, which
expire commencing in 2024, totaling approximately $2,351,000.  The
potential tax benefit of these losses may be limited due to certain change in
ownership provisions under Section 382 of the Internal Revenue Code (“IRS”) and
similar state provisions.





IRS
Section 382 places a limitation (the “Section 382 Limitation”) on the amount of
taxable income which can be offset by net operating loss carryforwards after a
change in control (generally greater than a 50% change in ownership) of a loss
corporation. Generally, after a control change, a loss corporation cannot deduct
operating loss carryforwards in excess of the Section 382 Limitation. Due to
these “change in ownership” provisions, utilization of the net operating loss
and tax credit carryforwards may be subject to an annual limitation regarding
their utilization against taxable income in future periods. The Company has not
concluded its analysis of Section 382 through December 31, 2007, but believes
that the provisions will not limit the availability of losses to offset future
income.


-27-
 Table of Contents




SYNTHENOL
INC.


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2007





Note
      9
            Subsequent
      Event





On
January 2, 2008, Hokley approved to extend the loans to the Company expiring on
December 31, 2007 of $35,000 and December 15, 2007 of $15,000 to June 30, 2008
(Note 3). The same terms and conditions will apply, including a penalty of 10%
of the capital debt.




-28-
 Table of Contents





Item
      8.
            Changes
      in and Disagreementswith Accountants on Accounting and
      Financial Disclosure





On July
20, 2006, the Board of Directors agreed, by resolution, to terminate the
services of their principal accountant, Amisano Hanson, Chartered Accountants of
Vancouver, Canada.  They further resolved to hire the accounting firm,
Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, as their
replacement.





The
decision to change the certified accountant had nothing to do with the
performance of the former accountant’s services.  Amisano Hanson’s
report in the 2005 Consolidated Financial Statements did not contain an adverse
opinion or disclaimer of opinion, nor were the statements modified as to
uncertainty, audit scope, or accounting principles.





We did
not have any disagreements on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which, if not
resolved to Amisano Hanson satisfaction, would have caused them to make
reference to the subject matter of the disagreement(s) in connection with their
report.





The
Company has given Amisano Hansonauthorization
to fully respond to the inquiries of the Company’s new accountants, Dale
Matheson Carr-Hilton LaBonte LLP, concerning the previous consolidated financial
statements audited by Amisano Hanson.  There were no limitations
placed upon Amisano Hanson, whatsoever.





Item
      8a.
            Controls
      and Procedures





The
management of the Company is responsible for establishing and maintaining
adequate internal control over financial reporting. Management must evaluate its
internal controls over financial reporting, as required by Sarbanes-Oxley (SOX)
Section 404 (a). The Company’s internal control over financial reporting is a
process designed under the supervision of the Company’s Chief Executive Officer
and Chief Financial Officer to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with U.S. generally
accepted accounting principles.





As of
December 31, 2007, management assessed the effectiveness of the Company’s
internal control over financial reporting based on the criteria for effective
internal control over financial reporting established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”) and SEC guidance on conducting such
assessments.  Based on that evaluation, they concluded that, during
the period covered by this report, such internal controls and procedures were
not effective to detect the inappropriate application of US GAAP rules as more
fully described below. This was due to deficiencies that existed in the design
or operation of our internal controls over financial reporting that adversely
affected our internal controls and that may be considered to be material
weaknesses.





The
matters involving internal controls and procedures that the Company’s management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee and
lack of a majority of outside directors on the Company's board of directors,
resulting in ineffective oversight in the establishment and monitoring of
required internal controls and procedures; (2) inadequate segregation of duties
consistent with control objectives; (3) insufficient written policies and
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure requirements; and (4)
ineffective controls over period end financial disclosure and reporting
processes. The aforementioned material weaknesses were identified by the
Company's Chief Financial Officer in connection with the audit of our financial
statements as of December 31, 2007 and communicated the matters to our
management.





Management
believes that the material weaknesses set forth in items (2), (3) and (4) above
did not have an affect on the Company's financial results. However, management
believes that the lack of outside directors on the Company's board of directors
can resulting in oversight in the establishing and monitoring of required
internal controls and procedures which can affect the process of preparing
Company's financial statements.





We are
committed to improving our financial organization. As part of this commitment,
we will create a position to  segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to the
Company: i) Appointing one or more outside directors to our board of directors
who shall be appointed to the audit committee of the Company resulting in a
fully functioning audit committee who will undertake the oversight in the
establishment and monitoring of required internal controls and procedures such
as reviewing and approving estimates and assumptions made by management ; and
ii) Preparing and implementing sufficient written policies and checklists which
will set forth procedures for accounting and financial reporting with respect to
the requirements and application of US GAAP and SEC disclosure
requirements.





-29-
 Table of Contents





Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on the
Company's Board. In addition, management believes that preparing and
implementing sufficient written policies and checklists will remedy the
following material weaknesses (i) insufficient written policies and procedures
for accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements; and (ii) ineffective
controls over period end financial close and reporting processes. Further,
management believes that the hiring of additional personnel who have the
technical expertise and knowledge will result in proper segregation of duties
and provide more checks and balances within the financial reporting department.
Additional personnel will also provide the cross training needed to support the
Company if personnel turn over issues within the financial reporting department
occur. This coupled with the appointment of additional outside directors will
greatly decrease any control and procedure issues the Company may encounter in
the future.





We will
continue to monitor and evaluate the effectiveness of our internal controls and
procedures and our internal controls over financial reporting on an ongoing
basis and are committed to taking further action and implementing additional
enhancements or improvements, as necessary and as funds allow.








Item
      8b.
            Changes
      in Internal Controls





There
have been no changes in our internal control over financial reporting identified
in connection with the evaluation required by paragraph (d) of Rules 13a-15 or
15d-15 under the Exchange Act that occurred during the small business issuer's
last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.








PART
III





Item
      9.
            Directors,
      Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) of the Exchange
  Act





Identification
of Directors and Executive Officers





Name
            Age
            TitleCecil
      Morris
            76
            Director
      / PresidentJohn
      Page
            78
            Director





Background
of Officers and Directors





Cecil
Morris


Cecil
Morris is a retired, freelance business consultant based in Cape Town, South
Africa with expertise in software programming and electronics development. Mr.
Morris assisted a number of technology companies based in South Africa and
internationally during his career and has served as a board member with us since
September 10, 2000. On October 31 2006, Mr. Morris was re-elected as President
of the Company.





John
Page


Mr. John
Page has had extensive business experience in South Africa for the past 45
years.  Before retiring in 2002, he operated his own business
enterprises. Mr. Page has Board experience as a result of being on the Board of
Directors for an international company. On October 31, 2006, Mr. Page was
re-elected as director of the Company.





-30-
 Table of Contents





Family
Relationships





There are
no family relationships among our directors or executive officers.








Involvement
in Certain Legal Proceedings





To the
best of the registrant's knowledge, during the past five years, no director,
executive officer, promoter or control person of the Company:





(1)
            has
      filed a petition under the federal bankruptcy laws or any state insolvency
      law, nor had a receiver, fiscal agent or similar officer appointed by a
      court for the business or present of such a person, or any partnership in
      which he was a general partner at or within two years before the time of
      such filing, or any corporation or business association of which he was an
      executive officer within two years before the time of such
      filing;





(2)
            were
      convicted in a criminal proceeding or named subject to a pending criminal
      proceeding (excluding traffic violations and other minor
      offenses);





(3)
            were
      the subject to any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any court of competent jurisdiction, permanently
      or temporarily enjoining, barring, suspending or otherwise limiting his
      involvement in any type of the following
  activities:





(i)
            acting
      as a futures commission merchant, introducing broker, commodity trading
      advisor, commodity pool operator, floor broker, leverage transaction
      merchant, associated person of any of the foregoing, or as an investment
      advisor, underwriter, broker or dealer in securities, or as an affiliated
      person, director of any investment company, or engaging in or continuing
      any conduct or practice in connection with such
  activity;





(ii)
            engaging
      in any type of business practice;





(iii)
            engaging
      in any activity in connection with the purchase or sale of any security or
      commodity or in connection with any violation of federal or state
      securities laws or federal commodity
laws.





(4)
            were
      the subject of any order, judgment or decree, not subsequently reversed,
      suspended or vacated, of any federal or state authority barring,
      suspending or otherwise limiting for more than 60 days the right of such
      person to engage in any activity described above under this Item, or to be
      associated with persons engaged in any such
  activity;





(5)
            were
      found by a court of competent jurisdiction in a civil action or by the
      Securities and Exchange Commission to have violated any federal or state
      securities law and the judgment in such civil finding or find by the
      Securities and Exchange Commission has not been subsequently reversed,
      suspended or vacated;





(6)
            were
      found by a court of competent jurisdiction in a civil action or by the
      Commodity Futures Trading Commission to have violated any federal
      commodities law, and the judgment in such civil action or finding by the
      Commodity Futures Trading Commission has not been subsequently reversed,
      suspended or vacated.





Compliance
with Section 16(A) of the Exchange Act





To the
best of our knowledge all directors, officers and persons who beneficially owned
more than ten percent of our common stock filed timely reports in compliance
with Section 16(a).





-31-
 Table of Contents





Item
      10.
            Executive
      Compensation





The
following table sets forth information with respect to compensation paid by the
Company to the Chief Executive Officer and the other highest paid executive
officers (the "Named Executive Officer") during the three most recent fiscal
years.








Summary
Compensation Table





Long
      Term CompensationAnnual
      Compensation
            
            
            Awards
            
            
            Payouts(a)
            (b)
            
            (c)
            
            
            (d)
            
            
            (e)
            
            
            (f)
            
            
            (g)
            
            
            (h)
            
            
            (i)Name
      and Principal Position
            Year
            
            Salary
      ($)
            
            
            Bonus
      ($)
            
            
            Other
      Annual Compen-sation ($)
            
            
            Restricted
      Stock Awards
            
            
            Securities
      Underlying Options/SARS (#)
            
            
            LTIP
      Payouts ($)
            
            
            All
      Other Compensation ($)Cecil
      Morris,
              President
      and Director (1)
            12/31/2003
            
            $
            24,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -12/31/2004
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2005
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2006
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2007
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -John
      Page
              Director
      (2)
            2005
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2006
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2007
            
            $
            6,000
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Mark
      Glusing
              Former
      Pres. and A/CFO (3)
            12/31/2003
            
            $
            86,427
            
            
            
            -
            
            
            
            -
            
            
            $
            15,750
            
            
            $
            300,000
            
            
            
            -
            
            
            
            -12/31/2004
            
            $
            46,678
            
            
            
            -
            
            
            
            -
            
            
            $
            1,110
            
            
            
            -
            
            
            
            -
            
            
            
            -2005
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2006
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Gregory
      Cathcart
              Former
      Pres., Director (4)
            12/31/2004
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            $
            1,000
            
            
            
            -
            
            
            
            -
            
            
            
            -2005
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -2006
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -








(1)
            Mr.
      Morris was appointed as a Director on September 10, 2000. On February 22,
      2005, Mr. Morris was elected as President of the
  Company.


(2)
            Mr.
      Page was appointed as a Director on February 22,
  2005.


(3)
            Mr.
      Glusing was appointed as President on December 13, 2002. He resigned his
      position as President on December 29,
2004.


(4)
            Mr.
      Cathcart was appointed as Director and President on December 29, 2004. He
      resigned as Director and President on February 22, 2005. Mr Cathcart was
      granted 100,000 shares as Bonus.








Options/SAR
Grants





The
following table sets forth information with respect to grant the stock
appreciation rights by the Company to executive officers during the year
2005.





Option/SAR
      Grants in Last Fiscal YearName
            Number
      of Securities Underlying Options/SARS Granted (#)
            Percent
      of Total Options/SARS Granted to Employees in Fiscal Year
            Exercise
      or base price ($/Sh)
            Expiration
      Date(a)
            (b)
            (c)
            (d)
            (e)Cecil
      Morris
            NIL
            NIL
            NIL
            N/AJohn
      Page
            NIL
            NIL
            NIL
            N/A





Note: On December 30, 2004,
the Board of Directors resolved to cancel all previously issued options and no
options were granted since then.


-32-
 Table of Contents




Long-Term
Incentive Plan Awards





We do not
have any long-term incentive plans that provide compensation intended to serve
as incentive for performance to occur over a period longer than one fiscal year,
whether such performance is measured by reference to our financial performance,
stock price or any other measure.





Compensation
of Directors





There are
standard arrangements pursuant to which our directors are compensated for
services provided as director. We paid the amount of $12,000 (2006: $12,000) to
our directors for committee participation or special assignments.








Item 11.
            Security Ownershipof CertainBeneficial Owners and Management and Related
      Stockholder Matters





The
following table sets forth the beneficial shareholdings of those persons or
entities who beneficially hold ten percent or more of our common stock as of
December 31, 2007 with the computation being based upon 731,521 shares of common
stock being outstanding.





Name
      and Address
            Number
      of Shares Beneficially Owned
            Percentage
      of ClassCEDE
      & Co.
              P.O.
      Box 222, Bowling Green Station
              New
      York, NY 10274
            384,233
            52.59%Iris
      International Holdings Limited
              Le
      Montaigne
              7
      Avenue de Grande-Bretagne
              MC
      98000 Monaco.
            90,000
            12.30%





Security
Ownership of Management





The
following table sets forth the shareholdings of our directors and executive
officers as of Dec 31, 2007 based upon nil shares of common stock being
outstanding:





Name
      and Address
            Number
      of Shares Beneficially Owned
            Percentage
      of ClassCecil
      Morris
              P.O.
      Box 1677
              Plettenberg
      Bay, South Africa 6848
            13,000
            1.78%John
      Page
              22
      Upington Street
              Villiersdorp,
      South Africa 6848
            5,000
            0.68%





Changes
in Control





To the
knowledge of management, there are no present arrangements or pledges of the
Company securities, which may result in a change of control of the
Company.





Securities
Authorized for Issuance under Compensatory Plans





As of
December 31, 2007 the company has no compensatory plans previously approved by
our security.





-33-
 Table of Contents





1998
Combined Incentive and Non-Qualified Stock Option Plan





The
Directors adopted the 1998 Combined Incentive and Non-Qualified Stock Option
(the "1998 Plan"), approved by our shareholders on August 21, 1998, to be
administered by the Board of Directors or a Committee of the Board of Directors,
to provide stock options as means to attract and retain key employees and
consultants. The shares to be offered under the 1998 Plan consist of previously
un-issued common shares, and are not to exceed 6,000,000 shares in total. The
exercise price to be set on granting of the Incentive Stock Options shall not be
less than 100% of fair market value on the date of granting and the options may
not be for longer than 10 years (110% of fair market value and 5 years in the
case of optionees holding more than 10% of the shares of the
company).  The exercise price to be set on granting of the
Non-Qualified Stock Options may be more or less than or equal to the fair market
value on the date of granting and the options may not be for longer than 10
years.  For both Incentive and Non-Qualified Stock Options, the
vesting and exercise schedule may be determined on an individual basis by the
Plan Administrator.








Item
      12.
            Certain
      Relationships and Related
  Transactions





Certain
Business Relationships





There
were no other material transactions, series of similar transactions, to which
the Company or any of its subsidiaries was or is to be a party, in which the
amount involved exceeded $60,000 and in which any director or executive officer,
or any security holder who is known to the Company to own of record or
beneficially more than five percent of the Company's common stock, or any member
of the immediate family of any of the foregoing persons, had a material
interest.





Indebtedness
of Management





Other
than as disclosed, there were no material transactions, series of similar
transaction, currently   transactions, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeded $60,000 and in which any director
or executive officer, or any security holder who is known to the Company to own
of record or beneficially more than five percent of the Company's common stock,
or any member of the immediate family of any of the foregoing persons, had a
material interest.





-34-
 Table of Contents





Item
      13.
            Exibits
      and Reports on Form
8-K





Reports
on Form 8-K were filed during 2007.





(a)
            Exhibits





Exhibit
      Number
            Description2.1*
            Form
      8 – K Creation of a direct financial obligation2.2*
            Form
      8 – K Creation of a direct financial obligation.2.3*
            Form
      8 – K Cancellation of acquisition of assets2.4*
            Form
      8 – K Creation of a direct financial obligation.2.5*
            Form
      8 – K Creation of a direct financial obligation.2.6*
            Form
      8 – K Creation of a direct financial obligation.2.7*
            Form
      8 – K Creation of a direct financial obligation.2.8*
            Form
      8 – K Creation of a direct financial obligation.31.1
            Section
      302 Certification – Cecil Morris31.2
            Section
      302 Certification – John Page32.1
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley act of 2002 for Cecil Morris, President and Acting
      Chief Financial Officer of the Company32.2
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley act of 2002 for John Page,
  Director





*
Previously filed.








Item
      14.
            Principal
      Accountant Fees and
Services





1.
            Audit
      Fees





In 2007,
we have paid fees in respect to Amisano Hanson and Dale Matheson Carr-Hilton
LaBonte LLP, Chartered Accountants, auditing and review fees of $23,172 (2006:
$19,122) related to our annual financial statements included in our Form 10-KSB
for services that are normally provided by the accountants in connection with
statutory and regulatory filings or engagements for those fiscal
years.





2007
            
            
            2006Amisano
      Hanson
            
            $
            1,972
            
            
            $
            4,122Dale
      Matheson Carr-Hilton LaBonte LLP
            
            $
            21,200
            
            
            $
            15,000





2.
            Audit-Related
      Fees





There
were no additional fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant, Amisano Hanson or
Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, that are
reasonably related to the performance of the audit or review of our financial
statements and are not reported under Item 9 (e)(1) of Schedule
14A.





3.
            Tax
      Fees





There
were no additional aggregate fees billed in 2006 (2005 - $NIL) for professional
services rendered by the principal accountant, Amisano Hanson or Dale Matheson
Carr-Hilton LaBonte LLP, Chartered Accountants, for tax compliance, tax advice
and tax planning.





-35-
 Table of Contents




4.
            All
      Other Fees





There
were no additional aggregate fees billed in each of the last two fiscal years
for products and services provided by Amisano Hanson or Dale Matheson
Carr-Hilton LaBonte LLP, Chartered Accountants, other than the services reported
in Item 9(e)(1) through 9(e)(3) of Schedule 14A.








SIGNATURES





In
accordance with the requirements of Section 13 or 15(d) of the Securities
Exchange Act, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.








SYNTHENOL
INC.


(Registrant)








/s/
      Cecil Morris
            
            Date:
      March 28, 2008Cecil
      Morris
              Director,
      President / Secretary/s/
      John Page
            
            Date:
      March 28, 2008John
      Page
              Director
      / Treasurer





In
accordance with the Securities Exchange Act this report has been signed below by
the following person(s) on behalf of the registrant and in the capacities and on
the dates indicated.





/s/
      Cecil Morris
            
            Date:
      March 28, 2008Cecil
      Morris
              Director,
      President / Secretary/s/
      John Page
            
            Date:
      March 28, 2008John
      Page
              Director
      / Treasurer






-36-