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<TITLE>Kreido Biofuels, Inc.</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>As filed with the Securities and Exchange Commission on January&nbsp;23, 2008<BR>
&nbsp;</B></DIV>


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<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>KREIDO BIOFUELS, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><B>(Name of Small Business Issuer in Its Charter)</B></DIV>


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    <TD align="center" valign="top"><B>Nevada</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>2869</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>20-3240178</B></TD>
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<TR style="font-size: 1px">
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>(State or Other Jurisdiction of <BR>
Incorporation or Organization)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(Primary Standard Industrial<BR>
Classification Code Number)</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>(I.R.S. Employer<BR>
Identification No.)</B></TD>
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<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>1070 FLYNN ROAD<BR>
CAMARILLO, CALIFORNIA 93012<BR>
(805)&nbsp;389-3499</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(Address and Telephone Number of Principal Executive Offices)<BR>
(Address of Principal Place of Business or Intended Principal Place of Business)</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Kreido Laboratories 1997 Stock Compensation Program<BR>
Kreido Biofuels, Inc. 2006 Equity Incentive Plan<BR>
Kreido Laboratories Consultants&#146; Warrants<BR>
Kreido Laboratories Restricted Stock Grants</B><BR>
(Full title of the plan)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>G. A. BEN BINNINGER<BR>
CHIEF EXECUTIVE OFFICER<BR>
1070 FLYNN ROAD<BR>
CAMARILLO, CALIFORNIA 93012<BR>
(805)&nbsp;389-3499</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>(Name, Address and Telephone Number of Agent for Service)</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B><I>Copy to:</I></B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>JOHN H. HEUBERGER, ESQ.<BR>
DLA PIPER US LLP<BR>
203 NORTH LASALLE STREET, SUITE 1800<BR>
CHICAGO,&nbsp;IL&nbsp;60601-1293<BR>
(312)&nbsp;368-4014</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

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    <TD nowrap align="center"><B>Title of Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed Maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Offering Price Per</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Aggregate Offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Registered(1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Share(2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Price(2)</B></TD>

    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Registration Fee(2)</B></TD>
    <TD width="1%">&nbsp;</TD>
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                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock,
$0.001 par value per share</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">5,475,423</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$0.37</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">$2,025,906.51</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">$79.62</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>An indeterminate number of additional shares of common stock shall be issuable
pursuant to Rule&nbsp;416 to prevent dilution resulting from stock splits, stock dividends or
similar transactions and in such an event the number of shares registered shall automatically
be increased to cover the additional shares in accordance with Rule&nbsp;416 under the Securities
Act of 1933, as amended, or the Securities Act.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Estimated pursuant to Rule 457(c) solely for purposes of calculating amount of
registration fee, based upon the average of the high and low prices reported on January&nbsp;16,
2008, reported on the Over-The-Counter Bulletin Board (the &#147;OTC Bulletin Board&#148;).</TD>
</TR>

</TABLE>
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Registration Statement constitutes a &#147;reoffer&#148; prospectus prepared in accordance with
Instruction C of the General Instructions to Form S-8 and Part&nbsp;I to Form S-3. This prospectus may
be utilized by certain participants under the Kreido Laboratories 1997 Stock Compensation Program,
the Kreido Biofuels, Inc. 2006 Equity Incentive Plan, Kreido Laboratories Consultants&#146; Warrants and
Kreido Laboratories restricted stock grants (the &#147;Plans&#148;) to cover reoffers and resales of the
shares of common stock received as grants under, or as a result of the exercise of stock options
granted under, the Plans. This Registration Statement also contains the information required
pursuant to Part&nbsp;II of Form S-8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The document(s) containing the information specified in Part&nbsp;I of Form S-8 (plan information and
registrant information) will be sent or given to plan participants as specified by Rule&nbsp;428(b)(1)
under the Securities Act. In accordance with Rule&nbsp;428 under the Securities Act and the &#147;Note&#148; to
Part&nbsp;I of Form S-8, these documents are not being filed with the SEC either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to Rule&nbsp;424 under the
Securities Act. These documents and the documents incorporated by reference in this Registration
Statement pursuant to Item&nbsp;3 of Part&nbsp;II of this Form S-8, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="v37232v3723200.gif" alt="(KREIDOBIOFUELS LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>4,120,849 Shares of Common Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This prospectus relates to the reoffer and resale from time to time by certain of our stockholders
identified herein under the heading &#147;Selling Stockholders&#148; of up to 4,120,849 shares of our common
stock issuable upon the exercise of outstanding options, rights or awards granted to such selling
stockholders pursuant to the Kreido Laboratories 1997 Stock Compensation Program (the &#147;1997
Program&#148;), the 2006 Equity Incentive Plan (the &#147;2006 Plan&#148;), warrants granted to Kreido Laboratories
consultants (the &#147;Consultant Warrants&#148;) and restricted stock grants to Kreido Laboratories officers
(together with the 1997 Program, the 2006 Program and the Consultant Warrants, the &#147;Plans&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The selling stockholders identified in this prospectus may offer the shares from time to time
through public or private transactions at prevailing market prices, at prices related to prevailing
market prices or at privately negotiated prices. We will not receive any proceeds from the sale of
the shares covered by this prospectus. We will pay all of the expenses associated with this
prospectus. Brokerage commissions and similar selling expenses, if any, attributable to the offer
or sale of the shares will be borne by the applicable selling stockholder.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our common stock is quoted on the OTC Bulletin Board under the trading symbol &#147;KRBF.OB.&#148; On
January&nbsp;16, 2008, the last reported closing price of our common stock was $0.38 per share on the
OTC Bulletin Board.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The common stock offered pursuant to this prospectus involves a high degree of risk. For more
information, please see the section of this prospectus titled &#147;Risk Factors,&#148; beginning on page 3.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The date of this prospectus is January&nbsp;23, 2008

</DIV>

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<A name="tocpage"></A>
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
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    <TD width="1%">&nbsp;</TD>
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<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Item</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Page</B></TD>
    <TD>&nbsp;</TD>
</TR>

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<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">PROSPECTUS SUMMARY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">FORWARD LOOKING STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">DILUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">SELLING STOCKHOLDERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">PLAN OF DISTRIBUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">LEGAL MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">INCORPORATION OF DOCUMENTS BY REFERENCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
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<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v37232exv4w1.htm">EXHIBIT 4.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v37232exv5w1.htm">EXHIBIT 5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v37232exv10w1.htm">EXHIBIT 10.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v37232exv23w2.htm">EXHIBIT 23.2</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
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</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Unless the context otherwise requires or otherwise specifies, references in this prospectus to
&#147;Kreido Biofuels,&#148; &#147;our company,&#148; &#147;we,&#148; &#147;us,&#148; and &#147;our&#148; refer to Kreido Biofuels, Inc., a Nevada
corporation, and our subsidiaries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have not authorized anyone to provide you with information different from that contained or
incorporated by reference in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are
permitted. The information contained in, or incorporated by reference in, this prospectus is
accurate only as of the date of this prospectus, or the date of the document in which it appears,
regardless of the time of delivery of this prospectus or of any sale of common stock.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS SUMMARY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Kreido Biofuels, Inc.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We took our current form on January&nbsp;12, 2007, when our wholly-owned subsidiary, Kreido Acquisition
Corp. (&#147;Acquisition Sub&#148;) and Kreido Laboratories executed a Merger Agreement and Plan of
Reorganization (the &#147;Merger Agreement&#148;). On January&nbsp;12, 2007, Acquisition Sub merged with and into
Kreido Laboratories, with Kreido Laboratories remaining as the surviving corporation and as our
wholly-owned subsidiary (the &#147;Merger&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Merger was treated as a recapitalization of our company for accounting purposes. Our
historical financial statements before the Merger were replaced with the historical financial
statements of Kreido Laboratories in all filings with the Securities and Exchange Commission
(&#147;SEC&#148;) subsequent to January&nbsp;12, 2007. The offering provided net proceeds of approximately $22.9
million, which included the repayment of $123,000 in outstanding notes and the cancellation of
indebtedness of approximately $250,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Concurrently with the closing of the Merger, we completed a private offering of 18,518,519 units of
our securities (the &#147;Units&#148;) at a purchase price of $1.35 per Unit. Each Unit consisted of one
share of our common stock and a warrant to acquire one share of our common stock at an exercise
price of $1.85 per share. The warrants are exercisable for a period of five years from January&nbsp;12,
2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also contemporaneously with the closing of the Merger, Kreido split-off another wholly-owned
subsidiary, Gemwood Leaseco, Inc., a Nevada corporation, through the sale of all of the outstanding
capital stock of Gemwood Leaseco, Inc. (the &#147;Split-Off&#148;). As a consequence of the sale of Gemwood
Leaseco, Inc., we discontinued all of our business operations which we conducted prior to the
closing of the Merger, and spun off all material liabilities existing prior to that date in any way
related to our pre-closing business operations. Our primary operations are now those formerly
operated by Kreido Laboratories, as well as other business activities which we have developed since
January&nbsp;12, 2007, as described in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As the result of the Merger, the Split-Off and the change in our business and operations from an
unrelated services company to a technology company focusing on the production of biofuel, a
discussion of the past financial results of our company is not pertinent and our financial results
as consolidated with Kreido Laboratories, the accounting acquirer, are presented here. Thus, the
discussion of our financial results addresses only Kreido Laboratories.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Kreido Laboratories is a corporation founded to develop proprietary technology for building
micro-composite materials for electronic applications. In 1995, Kreido Laboratories began to
develop the technology used in the design and assembly of our STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor. Kreido Laboratories
thereafter sought to develop the technology to improve the speed, completeness and efficiency of
certain chemical reactions, including esterifications and transesterifications, in the chemical
industries. We designed and developed the STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor which incorporates our proprietary
&#147;spinning tube-in-tube&#148; design configuration to improve the speed and yield of chemical reactions.
One of the EPA&#146;s largest laboratories has been using our STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor-based technology since 2004
to develop and evaluate new chemical processes and develop and optimize protocols for use of the
STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor by public and private entities. Beginning in the last quarter of 2005, Kreido
Laboratories began to evaluate the advantages of the STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor specifically for the production
of biodiesel. In the first quarter of 2006, Kreido Laboratories elected to focus primarily on the
biodiesel industry and began to prepare and execute our current business plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>The Offering</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This prospectus relates to the reoffer and resale from time to time by certain of our stockholders
identified herein under the heading &#147;Selling Stockholders&#148; of up to 4,120,849 shares of our common
stock issuable upon the exercise of outstanding options, rights or awards granted to such selling
stockholders pursuant to the Plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our common stock may be offered and resold from time to time by the selling stockholders identified
in this prospectus. It is anticipated that the selling stockholders will offer shares for sale at
prevailing prices on the OTC Bulletin Board on the date of sale. We will not receive any proceeds
from the sales of common stock by the selling stockholders under this prospectus. We will pay all
of the expenses associated with this prospectus. Brokerage
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">commissions and similar selling expenses, if any, attributable to the offer or sale of the shares
will be borne by the applicable selling stockholder.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>An investment in our common stock is highly speculative and involves a high degree of risk.
Investors should carefully consider the risks below before making an investment decision. Our
business, financial condition or results of operations could be materially adversely affected by
any of these risks. In such case, the trading price of our common stock could decline and
investors could lose all or part of their investment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Related to the Contemplated Conduct of our Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have had no operating history as a producer of biodiesel or as a producer of equipment systems
for the biodiesel industry. Our anticipated results of operation and financial condition are
planned and estimated on the basis of our assumptions with respect to our anticipated operations.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have no operating history in our contemplated biodiesel production business and, to date, have
not earned any revenues in connection with that business. We have no experience operating, selling
or licensing processing equipment or complete systems to the biodiesel or other fuel industry. We
have only recently, in the fourth quarter of 2005, begun to pursue commercial applications for the
STT&#174; Reactor in the biodiesel industry. Accordingly, it may be difficult for investors to evaluate
our business prospects or our ability to achieve our business objectives. If our efforts do not
result in both revenues and profits, we may be forced to cease operations and liquidate, and
investors may lose their entire investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we cannot successfully address these risks, our contemplated business and the anticipated
results of our contemplated operations and financial condition would suffer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We have been a development stage company since 1995 and have a history of significant operating
losses. We may not ever achieve or maintain profitability.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have incurred significant operating losses since our inception, and, as of September&nbsp;30, 2007,
we have accumulated a deficit of approximately $25.8&nbsp;million. We may continue to incur operating
losses, depending largely upon the commercial success of our STT&#174; Reactor and STT&#174; Production
Units. To date, we have neither sold nor licensed any commercial-scale products. We will need to
generate revenues in excess of our expenses to become profitable, and we may be unable to do so.
If we do not become profitable, the value of our common stock may decline.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our operating losses may increase as we continue to incur costs for manufacturing, sales and
marketing, research and development and legal and general corporate activities. Whether we achieve
and maintain profitability depends in part upon our ability, alone or with others, to successfully
complete the development of biodiesel production facilities, to sell biodiesel at a profit, to
successfully complete the development of our equipment systems and to sell or license those
equipment systems at prices that enable us to generate a profitable return.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be required to adapt our business plan to capital market and alternative energy market
changes.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We may find it necessary or advisable to substantially alter or materially change our
commercialization activities to respond to changes that occur in the future. In October&nbsp;2007, we
modified our business plan to focus on the development of the Wilmington, North Carolina location,
our first biodiesel production plant, with a plan to expand the site to be occupied by an
additional plant expansion when time and capital permits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although core to our business plan is to own and operate biodiesel production plants in the United
States for our own account, part of our contemplated business strategy is to license STT&#174;
Production Units to others both within and outside of the United States. The portion of our
contemplated business model that calls for us to license STT&#174; Production Units to others is
dependent on the market&#146;s willingness to adopt a new biodiesel production technology. Our STT&#174;
Production Unit may never gain acceptance from the biodiesel market, which would put in jeopardy
that portion of our business model that relies on licensing STT&#174; Production Units to others. This
risk is amplified by the fact that, although we are currently building our first commercial-scale
STT&#174; Production Units, we have not
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">completed building our first such unit. None of our products are currently being used to produce
biodiesel on a commercial scale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Should biodiesel producers fail to adopt our STT&#174; Biodiesel Production Units, or should a superior
competing technology be developed, it may not be possible to fund our operations as expected. The
degree of market acceptance of our STT&#174; Biodiesel Production Units will depend on numerous factors,
including the effectiveness of our product and the biodiesel market&#146;s willingness to use a new
processing technology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to execute our business plan is dependent on the growth and maintenance of substantial
demand for biodiesel in the United States. It is impossible to predict what the current demand for
biodiesel is since so little of it is currently being produced and all that is being produced is
being sold. Accordingly, the failure of a biodiesel market to develop could adversely affect our
anticipated results of operations and financial condition. Additionally, we are dependent on the
use of vegetable oils as the key raw material in the production of biodiesel. The cost of vegetable
oils has continued to rise over the last six months which has made it more difficult for biodiesel
production plants to make positive cash flow and profits. If we are unable to make positive cash
flows and profits over a reasonable period of time we may have to change or scale back our business
plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We have not produced or operated any commercial-scale STT&#174; Reactors or STT&#174; Production Units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have designed, built, and licensed two bench-scale STT&#174; Reactors to the specialty chemical and
pharmaceutical markets and have designed and built pilot-scale STT&#174; Reactors ranging from 8 to 100
ml capacity. We have also designed and are now building commercial-scale STT&#174; Production Units for
producing biodiesel. We have yet to license our first STT&#174; Production Unit or install one in our
own biodiesel production plant. A full size STT&#174; Reactor is currently being tested for limited
operations in our manufacturing facility. We do not know if our commercial-scale STT&#174; Production
Unit will produce biodiesel fuel to ASTM standard in the volumes that we anticipate or whether our
equipment systems will gain commercial acceptance in the biodiesel industry. Therefore, we are
uncertain whether we will be able to sell, license or lease any STT&#174; Biodiesel Production Units to
any third parties. If we are unable to produce and operate our equipment systems on a commercial
scale and generate biodiesel to ASTM standard, then we may be forced to cease operations or to
obtain additional capital to further develop our equipment systems. Additional capital may not be
available on terms acceptable to us or at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We will require additional funding to execute our business plan, and additional funding may not be
available. If additional funding is available, it may not be offered to us on terms that are
satisfactory to our board of directors.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will require additional capital in the future to sufficiently fund our operations. We may not
be able to obtain additional capital on terms favorable to us or at all. We have consumed
substantial amounts of capital to date, and we expect to increase our operating expenses over the
coming years as we build our pilot unit and first biodiesel production unit, expand our facilities
and infrastructure and prepare for commercialization activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Based upon our projected activities, we believe that we will need at least an additional $20
million in the first quarter of 2008 in order to support our current plan&#146;s funding needs of
completing the first biodiesel production plant, funding the start-up plant costs and commencing
the construction on the STT&#174; Reactors for the next biodiesel production plant. Since the first
plant, and any subsequent plants, will require additional funding to complete, we have not
committed to constructing an additional plant only to starting the construction of the next four
STT&#174; Reactors. However, if funding is not available at the level we may need or at terms acceptable
to us or our investors, we may need to change or scale back our operating plans, which would
negatively affect existing stockholders. If adequate funds are not available, we likely will not
be successful in executing our business plan as anticipated and, as a result, we may be forced to
curtail growth, suspend operations and explore other alternatives in an effort to realize value for
our stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are considering a combination of funding sources including a warrant exchange offer, local
government bond financing, equipment and raw materials inventory lines-of-credits, project
financing and a preferred stock offering. Market conditions will affect the availability of funds
from various sources and there will have to be some level of collateral and guarantees provided for
many of the financing alternatives. We cannot be certain that additional financing will not be
needed beyond our current and projected needs or will be available when required and, if available,
that it will be on terms satisfactory to us. Future financings may be dilutive to existing
stockholders. If
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary
to meet our funding requirements, this would adversely affect our anticipated results of operations
and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>A substantial part of our assumptions regarding our financial advantages in the biodiesel
production business are estimates and therefore may not be correct.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that our STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Production Units will have higher yields and a less per gallon cost than
conventional biodiesel production systems. This is based, in part, on what we believe will be
favorable facilities construction costs and operating efficiencies. If the actual cost exceeds the
costs that we project to construct our planned biodiesel production facilities, it would adversely
affect the amortization of our capital costs. This in turn would decrease or eliminate certain of
our anticipated costs advantages with respect to conventional biodiesel plants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We believe that our per gallon cost of producing biodiesel will be less than conventional biodiesel
producers based primarily on less cost incurred from energy usage and the catalyst material used in
making our biodiesel. If the actual use of energy and catalyst material is more than expected then
the costs advantages that we anticipate may not be present, and we may not be able to achieve our
expected profits or any profits at all.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The cost of soybean, palm oil and canola/rapeseed oil and the market price of biodiesel has been
fluctuating and is subject to supply and demand conditions which may affect our profitability and
cash flow .</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The demand for soybean oil, palm oil and canola/rapeseed oil has been increasing in 2007 and may
continue to do so in the future. The increase in demand has increased the cost of these feedstock
raw materials. According to the Energy Management Institute Alternative Fuels Index<SUP style="font-size: 85%; vertical-align: text-top">sm</SUP>,
the average producer price of B100 diesel across 52 major metropolitan areas in the United States
during the week ending December&nbsp;20, 2007 was $3.91 per gallon, and net of site specific
transportation and handling costs, it was $3.49 per gallon. It is possible that this price range
will not remain the relevant price range for biodiesel in and after 2008. It is possible that
potential supply and demand conditions may adversely affect the various cost of raw materials or
the price level for biodiesel. If the cost of these feedstock raw materials remains high and if
the wholesale price for biodiesel does not remain at a level that permits us to generate revenues
in excess of our costs, after taking into account tax incentives and credits, then we may not
become or remain profitable or have positive cash flow, in which case it will likely affect our
financial condition and viability as an on-going business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our ability to execute our business plan depends on conditions the satisfaction of which is not
under our control.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to successfully execute our business plan depends on the satisfaction of several
business (in addition to capital) conditions, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obtaining all required permits, consents and regulatory approvals from government
agencies and other third parties for our anticipated construction and operation of
owned biodiesel production plants and related facilities, as well as for the future
operation of those facilities;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>successfully commercializing the STT<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Reactor technology for biodiesel;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>arranging reasonably priced insurance to cover operating risks and other adverse
outcomes which could impair the business; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>market conditions for fuels that make biodiesel a competitively priced product.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Since we have yet to begin full operation as a biodiesel business, there is no certainty that we
will be able to achieve satisfaction of any or all of the above conditions. If we fail to do so,
we may be forced to cease operations and to liquidate, in which case investors may not be able to
receive any return of their invested capital. Also, the process of obtaining permits in certain
locations may increase the cost and delay plant construction.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are dependent upon our officers for management and direction, and the loss of any of these
persons could adversely affect our anticipated results of operations and financial condition.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are dependent upon our officers for implementation of our current stage of development for our
business plan. The loss of any of our key officers, including Philip Lichtenberger, our Chief
Operating Officer and Alan McGrevy, our Vice President of Engineering, could have a material
adverse effect upon the anticipated results of our contemplated operations and financial condition
and would likely delay or prevent the achievement of our contemplated business objectives. We do
not maintain &#147;key person&#148; life insurance for any of our officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may be unable to effectively manage our growth.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our strategy envisions expanding our business beyond our status as a development stage company. We
anticipate significant expansion in our manpower, facilities and infrastructure in the future and
expect that greater expansion will be necessary to address potential growth in our customer base
and market opportunities. To manage the expected growth of our operations and personnel, we will
need to improve our transaction processing, operational and financial systems, procedures and
controls. The current and planned personnel, systems, procedures and controls may not be adequate
to support our future operations. We may be unable to hire, train, retain and manage required
personnel or to identify and take advantage of existing and potential strategic relationships and
market opportunities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If we fail to effectively manage our growth, our anticipated results of operation and financial
condition could be adversely affected. Growth may place a strain on our management systems and
resources. We must continue to refine and expand our business development capabilities, our
systems and processes, and our access to financing sources. As we grow, we must continue to hire,
train, supervise and manage new employees. We cannot assure that if we do expand our business that
we will be able to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>meet our capital needs;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expand our systems effectively, efficiently or in a timely manner;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>allocate our human resources optimally;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>identify and hire qualified employees or retain valued employees; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>incorporate effectively the components of any business that we may acquire in our
effort to achieve growth.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may be unable to attract and retain key personnel.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our development and success is dependent upon our management&#146;s ability to effectuate our transition
into a biodiesel technology-development and production company. Our anticipated product
development and manufacturing efforts capability will require additional management not yet part of
us. There is intense competition for qualified management, research, development and manufacturing
personnel in the chemical, engineering and biofuels fields. Therefore, we may not be successful in
attracting and retaining the qualified personnel necessary to develop our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>New technologies could render our biodiesel production system obsolete.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The development and implementation of new technologies may result in a significant reduction in the
costs of biodiesel production. For instance, any technological advances in catalysis and/or large
scale micro-channel reactor systems could have an adverse effect on our contemplated business. We
cannot predict whether new technologies may become available, the rate of acceptance of new
technologies by competitors or the costs associated with new technologies. In addition, advances
in the development of alternatives to biodiesel could significantly reduce demand for or eliminate
the need for biodiesel.
</DIV>


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</DIV>



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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any advances in technology that require significant capital expenditures to remain competitive or
that reduce demand or prices for biodiesel could adversely affect our anticipated results of
operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Strategic relationships with feedstock suppliers, fabricators, building contractors, equipment
suppliers and other unrelated third parties on which we rely are subject to change.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to develop our business will depend on our ability to identify feedstock suppliers,
construction contractors, equipment fabricators and customers and to enter into suitable commercial
arrangements with those suppliers, contractors, fabricators and customers. Our success in this
area will also depend on our ability to select and evaluate suitable projects, as well as to
consummate transactions in a highly competitive environment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The demand for construction and contract manufacturing companies that are qualified to build
biodiesel production plants and equipment has increased. Some companies report that their
construction backlogs are as many as four years. While we have the capacity to manufacture our
STT&#174; Reactors in house, we do not have the capability in-house to construct and fabricate the
entire biodiesel production plant and equipment and we intend to rely on strategic relationships
with third-party construction and fabrication companies, some of which we have not yet developed.
Furthermore, the recent growth in biodiesel plant construction has caused a backlog on certain
specialized equipment. One example of such specialized equipment is centrifuges, for which there
is a reported backlog of six months for some models. The failure to secure agreements with
construction companies and/or for the requisition of such specialized equipment may adversely
affect our anticipated results of operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To develop our business, we plan to use the business relationships of our management to form
strategic relationships. These relationships may take the form of joint ventures with other
private parties or local government bodies, contractual arrangements with other companies,
including those that supply feedstock that we will use in our business, or minority investments
from third parties. We may not be able to establish these strategic relationships, or, if
established, we may not be able to maintain these relationships, particularly if members of the
management team leave us. In addition, the dynamics of our relationships with strategic partners
may require us to incur expenses or undertake activities we would not otherwise be inclined to
incur or undertake to fulfill our obligations to these partners or maintain these relationships.
If we do not successfully establish or maintain strategic relationships, we may not be able to
achieve our business goals and that could adversely affect our anticipated results of operations
and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our anticipated production, sale and distribution of biodiesel are dependent on the sufficiency of
necessary infrastructure, which may not be put into place on a timely basis, if at all. In this
case, our anticipated results of operations and financial condition would be adversely affected by
these infrastructure disruptions.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Substantial development of infrastructure will be required by persons and entities outside our
control for our operations, and the biodiesel industry generally, to grow. Areas requiring
expansion include, but are not limited to:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adequate rail capacity, including sufficient numbers of dedicated tanker cars;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sufficient storage facilities for feedstock and biodiesel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increases in truck fleets capable of transporting biodiesel within localized
markets; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expansion of blending facilities and pipelines to handle biodiesel.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Substantial investments required for these infrastructure changes and expansions may not be made or
may not be made on a timely basis. Any delay or failure in making the changes to or expansion of
infrastructure could hurt the demand and/or prices for our products, impede our delivery of
products, impose additional costs on us or otherwise have a material adverse effect on our
anticipated results of operations or financial condition. Our business is dependent on the
continuing availability of infrastructure, and any infrastructure disruptions could adversely
affect our anticipated results of operations and financial condition.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be unable to locate suitable properties and obtain the development rights needed to build
and expand our business, in which case we will not be able to produce our anticipated results of
operations and financial condition.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our business plan focuses in part on designing, building and operating biodiesel production plants
for our own account within existing liquids-handling terminals adjacent to river, lake and
seaports. Our ability to secure suitable plant locations could create unanticipated costs and
delays in implementing our business plan. If we are not successful in identifying and obtaining
development rights on suitable properties for building and operating biodiesel production plants,
our future prospects for profitability will likely be substantially limited, and adversely affect
our anticipated results of operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be adversely affected by environmental, health and safety laws, regulations and
requirements, any of which could require us to pay or satisfy costs or incur expenses substantially
in excess of our business plan.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As we pursue our business plan, we will become subject to various federal, state, local and foreign
environmental laws and regulations, including those relating to the discharge of materials into the
air, water and ground, the generation, storage, handling, use, transportation and disposal of
hazardous materials, and the health and safety of our employees. The cost of compliance with
environmental, health and safety laws could be significant. A violation of these laws, regulations
and/or permit conditions can result in substantial fines, natural resource damages, criminal
sanctions, permit revocations and/or facility shutdowns, as well as civil liabilities to affected
property owners. In addition, new laws, new interpretations of existing laws, increased
governmental enforcement of environmental laws or other developments could require us to make
additional significant expenditures.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The hazards and risks associated with producing and transporting biodiesel, in particular due to
the presence of methanol (such as fires, natural disasters, explosions and abnormal pressures and
blowouts) may also result in personal injury claims or damage to property and third parties. As
protection against operating hazards, we intend to maintain insurance coverage against some, but
not all, potential losses. However, we could sustain losses for uninsurable or uninsured risks, or
in amounts in excess of existing insurance coverage. Events that result in significant personal
injury or damage to our property or third parties or other losses that are not fully covered by
insurance could have a material adverse effect on the anticipated results of our contemplated
operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our anticipated results of operation and financial condition will suffer if we cannot obtain or
maintain governmental permits or licenses that are necessary for the operation of our biodiesel
production units.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our biodiesel production facilities operations will require licenses and permits from various
governmental authorities. We believe that we will be able to obtain all necessary licenses and
permits to carry on the activities that we contemplate. However, our ability to obtain, sustain or
renew such licenses and permits will be subject to governmental regulations and policies which are
subject to change. Our inability to obtain or retain any of these licenses or permits may have a
material adverse effect on our anticipated results from operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our success will depend in part on our ability to protect our intellectual property.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our success, competitive position and future revenues will depend in large part on our ability, to
obtain, secure and defend patent protection for our products, methods, processes and other
technologies, to preserve our trade secrets, to prevent third parties from infringing on our
proprietary rights, and to operate without infringing on the proprietary rights of third parties.
Our interest in these rights is complex and uncertain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We hold five issued patents (plus one pending application for U.S. patents) on our STT&#174; technology
for biodiesel production in the United States and internationally. These issued patents expire
between 2011 and 2023. We will seek to obtain additional patents that we believe may be required
to commercialize our products, technologies and methods. We also have patent applications pending
in several foreign jurisdictions. We anticipate filing additional patent applications both in the
United States and in other countries, as appropriate. However, we cannot predict:
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the degree and range of protection any patents will afford us against competitors,
including whether third parties will find ways to invalidate or otherwise circumvent
our patents;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if and when patents will issue;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if our issued patents will be valid or enforceable;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether or not others will obtain patents claiming aspects similar to those covered
by our patents and patent applications; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether we will need to initiate litigation or administrative proceedings which may
be costly whether we win or lose.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Even issued patents may later be found unenforceable, or be restricted or invalidated in
proceedings instituted by third parties before various patent offices and courts. Changes in
either the patent laws or in the interpretation of patent laws in the United States and other
countries may diminish the value of our intellectual property. We are therefore unable to predict
the scope of any patent claims in our or in third-party patents that may be issued or may be
enforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To help protect our proprietary know-how and our inventions for which patents may be unobtainable
or difficult to obtain, we rely on trade secret protection and confidentiality agreements with our
employees, consultants and advisors. If any of our trade secrets, know-how or other proprietary
information is disclosed, the value of our trade secrets, know-how and other proprietary rights
would be significantly impaired and our business and competitive position would suffer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A dispute regarding the infringement or misappropriation of our proprietary rights or the
proprietary rights of others could be costly and result in delays in our commercialization
activities. Our success depends, in part, on our ability to operate without infringing on or
misappropriating the property rights of others.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any legal action claiming damages or seeking to enjoin commercial activities relating to the
affected products, methods, and processes could require us to obtain a license to continue to use,
manufacture or market the affected products, methods or processes, which may not be available on
commercially reasonable terms, if at all, or could prevent us from making, using or selling the
subject matter claimed in patents held by others and subject us to potential liability damages or
could consume a substantial portion of our managerial and financial resources whether we win or
lose.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Risks Related to our Participation in the Biodiesel Industry</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Increases in the construction of biodiesel production plants may cause excess biodiesel production
capacity in the market. Excess capacity may adversely affect the price at which we are able to
sell the biodiesel that we produce and may also adversely affect our anticipated results of
operation and financial condition.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In 2006, only 200&nbsp;million gallons of biodiesel were produced in the United States. According to
the National Biodiesel Board, as of January&nbsp;31, 2007, there is a reported 864 MMgpy of biodiesel
production capacity in the United States, with another 1.7&nbsp;billion gallons per year under
construction (for a total of 2,564 MMgpy) (see<BR>
http://www.biodiesel.org/pdf_files/fuelfactsheets/Production_Capacity.pdf).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With such an increase in biodiesel production capacity in the United States, compared to historical
biodiesel production levels, there is risk that there will be a significant amount of excess
biodiesel production capacity, thereby resulting in significant price competition and the closure
of less competitive biodiesel facilities. Although this existing and pending capacity growth is
very large compared to historical biodiesel production levels, we believe that the market will
purchase as much biodiesel as is available, so long as the prices for biodiesel (net of the impact
of tax credits and other similar incentives) are competitive with those of petrodiesel.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our anticipated results of operations, financial condition and business outlook will be highly
dependent on commodity prices and the availability of supplies, both of which are subject to
significant volatility and uncertainty.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our operating results will be substantially dependent on commodity prices, especially prices for
biodiesel and petroleum diesel, as well as feedstock, equipment and materials used in the
construction and operation of our biodiesel production plants. As a result of the volatility of
the prices and the scarcity of these items, our results may fluctuate substantially, and we may
experience periods of declining prices for our products and increasing costs for our raw materials,
which could result in operating losses. Although we may attempt to offset a portion of the effects
of fluctuations in prices by entering into forward contracts to supply biodiesel or purchase
feedstock or other items or by engaging in transactions involving exchange-traded futures
contracts, the amount and duration of these hedging and other risk mitigation activities may vary
substantially over time, and these activities also involve substantial risks.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The price of feedstock is influenced by market demand, weather conditions, animal processing and
rendering plant decisions, factors affecting crop yields, farmer planting decisions and general
economic, market and regulatory factors. The principal feedstocks for biodiesel currently are
soybean oil, palm oil and canola/rapeseed oil and are the feedstocks most susceptible to price risk
due to market demand. Factors affecting crop yield and planting decisions include government
policies and subsidies with respect to agriculture and international trade, and global and local
demand and supply. The significance and relative effect of these factors on the price of feedstock
is difficult to predict.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any event that tends to negatively affect the supply of feedstock, such as increased demand,
adverse weather or crop disease, could increase feedstock prices and potentially harm our business.
In addition, we may also have difficulty, from time to time, in physically sourcing feedstock on
economical terms due to supply shortages. Such a shortage could require us to suspend operations
until feedstock is available at economical terms, which would have a material adverse effect on our
business, anticipated results of operations and financial condition. The price we pay for
feedstock at a facility could increase if an additional multi-feedstock biodiesel production plant
is built in the same general vicinity or if alternative uses are found for lower cost feedstock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Biodiesel fuel is a commodity whose price is determined based in part on the price of petroleum
diesel, world demand, supply and other factors, all of which are beyond our control. World prices
for biodiesel fuel have fluctuated widely in recent years. We expect that prices will continue to
fluctuate in the future. Price fluctuations will have a significant impact upon our revenue, the
return on our investment in biodiesel production plants and our general financial condition. Price
fluctuations for biodiesel fuel may also impact the investment market and our ability to obtain
investor capital. Although market prices for biodiesel fuel rose to near-record levels during
2005, there is no assurance that these prices will remain at current levels. Future decreases in
the prices of biodiesel or petroleum diesel fuel may have a material adverse effect on our
financial condition and anticipated results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We also use other raw materials such as methanol and sodium hydroxide, which are commodities and
subject to price fluctuations and supply uncertainty. If the availability or the cost of these raw
materials changes significantly, our production volume or cost to produce biodiesel could be
affected.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Both supply and demand in the United States biodiesel industry are highly dependent upon federal
and state legislation.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The production of biodiesel is made significantly more competitive by federal and state tax
incentives. The federal excise tax incentive program for biodiesel was originally enacted as part
of the JOBS Act but is scheduled to expire on December&nbsp;31, 2008. This program provides blenders,
generally distributors, with a one cent tax credit for each percentage point of virgin vegetable
oil-derived biodiesel blended with petroleum diesel. For example, distributors that blend virgin
soybean-derived biodiesel with petroleum diesel into a B20 blend biodiesel would receive a 20 cent
per gallon excise tax credit. The program also provides blenders of recycled oils, such as yellow
grease from restaurants, with a one-half cent tax credit for each percentage point of recycled
oil-derived biodiesel blended with petroleum diesel. For example, distributors that blend recycled
oil-derived biodiesel with petroleum diesel into a B20 blend biodiesel would receive a 10 cent per
gallon excise tax credit. In addition, approximately 31 states
</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">provide mandates, programs and other incentives to increase biodiesel production and use, such as
mandates for fleet use or for overall use within the state, tax credits, financial grants, tax
deductions, financial assistance, tax exemptions and fuel rebate programs. These incentives are
meant to lower the end-users&#146; cost of biodiesel in comparison to petroleum diesel. Currently, we
plan to sell the biodiesel we produce to blenders that blend their biodiesel blend with petroleum
diesel and therefore we expect to receive a price from our biodiesel purchasers that includes the
$1.00 excise tax credit. The elimination or significant reduction in the federal excise tax
incentive program or state incentive programs benefiting biodiesel could adversely affect our
anticipated results of operations and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Reductions in support of biodiesel from government, consumer or special interest groups could
adversely impact our business plan and our anticipated results of operation and financial
condition.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Federal and state governments in the United States and governments abroad have implemented
incentives and mandates in support of biodiesel. Similarly, there has been support from consumers
and special interest groups, such as agricultural and environmental groups. Support has even come
from the petroleum industry itself, such as BP&#146;s (formerly known as British Petroleum) &#147;beyond
petroleum&#148; marketing campaign, and the automobile industry, such as General Motors&#146; &#147;live green, go
yellow&#148; flex-fuel ethanol marketing campaign. The loss of these incentives, including the failure
to renew incentives that terminate, could adversely affect our anticipated results of operations
and financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be unable to effectively compete in the biodiesel industry.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In many instances, our competitors and potential competitors have, or will have, substantially
greater financial, technical, research, and other resources and larger, more established marketing,
sales, distribution, and service organizations than we have. Moreover, competitors may have longer
operating histories and greater credit worthiness (i.e., in competing for feedstock) than we have,
and competitors may offer discounts as a competitive tactic. Our competitors may succeed in
developing or marketing technologies or products that are more effective or commercially attractive
than our products, or that would render our technologies and products obsolete. Also, we may not
have the financial resources, technical expertise, or marketing, distribution, or support
capabilities to compete successfully in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We anticipate that competition for the licensing of biodiesel reactors will come primarily from
companies that offer competing novel biodiesel production technologies. To compete effectively in
licensing biodiesel production technology, we will need to demonstrate the advantages of our STT&#174;
Reactor over well-established, traditional chemical reactors, as well as novel technologies and
systems. We will also experience competition from other producers of biodiesel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our ability to succeed as a biodiesel production company will depend, to a large extent, on our
ability to compete for, and obtain, feedstock, obtaining suitable properties for constructing
biodiesel production plants and sales of biodiesel and related products. Competition will likely
increase as energy prices on the commodities market, including biodiesel and petrodiesel, rise as
they have in recent years. This increased competition may also have an adverse impact on our
ability to obtain additional capital from investors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>A substantial reduction in crude petroleum oil prices could have an adverse impact on our
contemplated business plan by making biodiesel fuel relatively more expensive compared to
petrodiesel. Were such a reduction to occur, it would likely adversely affect our anticipated
results of operation and financial condition.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">With the current elevated prices compared to historical prices of crude petroleum oil, and by
extension, petrodiesel, biodiesel can be produced for a cost that is economically practical when
compared to the cost to produce petrodiesel. However, if the price of crude petroleum oil should
drop substantially, this could have a material adverse effect on the entire biodiesel industry and
us.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Risks Related to Investment in our Common Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>The public market for our common stock is volatile.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our common stock is currently quoted for trading on the OTC Bulletin Board and since the closing of
our private placement offering in January&nbsp;2007 the trading price has been volatile. An active
public market for the common stock may not be sustained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The market price of our common stock may fluctuate significantly in response to factors, some of
which are beyond our control, including the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual or anticipated variations in operating results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the limited number of holders of the common stock, and the limited liquidity
available through the OTC Bulletin Board;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in financial estimates by securities analysts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the economic performance and/or market valuations of other energy
companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing and type of financing and related dilution impact on the stockholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our announcement of significant acquisitions, strategic partnerships, joint ventures
or capital commitments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>additions or departures of key personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales or other transactions involving our capital stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the market for biodiesel fuel commodities or the capital markets
generally, or both;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the availability of feedstock on commercially economic terms;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the demand for biodiesel fuel, including changes resulting from the
expansion of other alternative fuels;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the social, political and/or legal climate;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements of technological innovations or new products available to the
biodiesel production industry; and/or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements by relevant domestic and foreign government agencies related to
incentives for alternative energy development programs.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may not be able to attract the attention of major brokerage firms.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because we have not yet actively commenced business, or because we became public through a &#147;reverse
merger,&#148; security analysts of major brokerage firms may not provide coverage of us. Moreover,
brokerage firms may not desire to provide financial advisory services or to conduct secondary
offerings on our behalf in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our common stock may be considered &#147;a penny stock&#148; and may be difficult to sell.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The SEC has adopted regulations which generally define &#147;penny stock&#148; to be an equity security that
has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share,
subject to specific exemptions.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The market price of our common stock is less than $5.00 per share and therefore may be designated
as a &#147;penny stock&#148; according to SEC rules. This designation requires any broker or dealer selling
these securities to disclose certain information concerning the transaction, obtain a written
agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase
the securities. These rules may restrict the ability of brokers or dealers to sell the common
stock and may affect the ability of investors to sell their shares. In addition, since the common
stock is currently traded on the OTC Bulletin Board, investors may find it difficult to obtain
accurate quotations of the common stock and may experience a lack of buyers to purchase such stock
or a lack of market makers to support the stock price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>A significant number of our shares will be eligible for sale, and their sale could depress the
market price of our common stock.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Sales of a significant number of shares of our common stock in the public market could harm the
market price of our common stock. As additional shares of our common stock become available for
resale in the public market pursuant to Rule&nbsp;144, the supply of common stock will increase, which
could decrease the price of our common stock. Some or all of the shares of common stock not
registered on the Registration Statement on Form SB-2, as amended (the &#147;Registration Statement&#148;),
may be resold from time to time in the open market pursuant to Rule&nbsp;144. In general, a person who
has held restricted shares for a period of one year may, upon filing with the SEC a notification on
Form&nbsp;144, sell into the market shares of common stock in an amount equal to the greater of 1% of
the outstanding shares or the average weekly number of shares sold in the last four weeks prior to
such sale. Such sales may be repeated once every three months, and any of the restricted shares
may be sold by a non-affiliate after they have been held for two years. Substantially all of the
former shareholders of Kreido Laboratories have entered into lock-up agreements pursuant to which
they have agreed to not sell the company shares issued to them in the Merger for a period of 12
months following the merger date of January&nbsp;12, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our principal stockholders will have significant voting power and may take actions that may not be
in the best interests of other stockholders.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our officers, directors, principal stockholders, their affiliates and other related persons control
a significant percentage of the outstanding shares of common stock. If these stockholders act
together, they will be able to exert significant control over our management and affairs requiring
stockholder approval, including approval of significant corporate transactions. This concentration
of ownership may have the effect of delaying or preventing a change in control and might adversely
affect the market price of the common stock. This concentration of ownership may not be in the
best interests of all our stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Investors should not anticipate receiving cash dividends on our common stock.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have never declared or paid any cash dividends or distributions on our common stock. We
currently intend to retain future earnings to support operations and to finance expansion and
therefore do not anticipate paying any cash dividends on our common stock in the foreseeable
future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Wrongful acts of our former counsel may expose the Company to investor claims under the securities
laws and gives rise to Company claims against those associated with the wrongdoing.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;28, 2007, we announced that we have conducted an inquiry concerning the improper
transfer of shares of our common stock without a restrictive legend to two brokerage accounts
controlled by Louis Zehil, a former partner of McGuireWoods, the law firm that represented us in a
private offering of company stocks in January&nbsp;2007. As part of the 18,518,519 unit private
offering, a total of approximately 1.5&nbsp;million units of common stock and common stock purchase
warrants were sold to the two private financial entities controlled by Mr.&nbsp;Zehil. The SEC has
commenced an enforcement action against Mr.&nbsp;Zehil and U.S. Department of Justice in pursuing
criminal proceedings against Mr.&nbsp;Zehil. We have learned that approximately 81,480 shares of common
stock were sold in the public markets by the two private financial entities at the direction of Mr.
Zehil in January and early February of this year. These sales were done without our consent or
knowledge and in violation of the terms of purchase and purchase covenants, and the representations
and warranties on which we relied in satisfying the requirements of the private placement exemption
of Regulation&nbsp;D under the Securities Act. We do not anticipate reacquiring any of the 81,480
shares. The high and low trading prices of our common stock during the period that the 81,480
shares were
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">sold were $2.43 and $1.57, respectively. Based upon this range, were we requested by purchasers to
reacquire such shares, the aggregate maximum cost to us would be less than $200,000. The remaining
1.4&nbsp;million shares and the warrants to purchase 1,481,480 shares of common stock are under the
control of a court-appointed receiver who has recently filed a report with the court soliciting
persons with claims against the two private financial entities to submit those claims. We are
evaluating our claims against the two private financial entities, Mr.&nbsp;Zehil and his former law firm
and we expect to pursue our claims against the private financial entities, Mr.&nbsp;Zehil and his former
law firm in the near future. There is no assurance that we will be able to recover on our various
claims. Further, we may incur significant costs resulting from our investigation of this matter,
any legal proceedings that we may initiate as a result of our investigation and our cooperation
with government authorities. We may not be adequately indemnified for, or otherwise be able to
recover, such costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may not be able to continue as a going concern.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our consolidated financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business. We have a history of operating losses that are likely to continue in the future. We
have included an explanatory paragraph in Note 3 of our Annual Report on Form 10-KSB as amended by
Form 10-KSB/A, to the effect that our significant losses from operations and our dependence on
financing provides substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that might be necessary should we be unable to
continue as a going concern.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our operations must begin to provide sufficient revenues to improve our working capital position.
Additionally, we will require additional capital to construct our planned biodiesel facilities. If
we are unable to obtain additional capital we may not be able to continue as a going concern.
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This prospectus contains forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking statements by terminology
such as &#147;may&#148;, &#147;should&#148;, &#147;expects&#148;, &#147;plans&#148;, &#147;anticipates&#148;, &#147;believes&#148;, &#147;estimates&#148;, &#147;predicts&#148;,
&#147;potential&#148; or &#147;continue&#148; or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks, uncertainties and other
factors, including the risks described in this section, that may cause our or our industry&#146;s actual
results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these statements to actual
results.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Those forward-looking statements also involve certain risks and uncertainties. Factors, risks and
uncertainties that could cause or contribute to such differences include those specific risks and
uncertainties discussed above. The cautionary statements made in this document should be read as
being applicable to all related forward-looking statements wherever they appear in this document.
</DIV>

<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You should only rely on the information incorporated by reference or provided in this prospectus or
any supplement. We have not authorized anyone else to provide you with different information. The
common stock is not being offered in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any supplement is accurate as of any date other
than the date on the front of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We file Form 8-K reports and other information with the SEC as is required by the Exchange Act.
You may read and copy any reports, statements or other information we have filed at the SEC&#146;s
Public Reference Room at 100 F
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Rooms. Our filings are also available on the Internet at the
SEC&#146;s website at http:\\www.sec.gov.
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The shares being registered by this prospectus are being registered for the account of the selling
stockholders named in this prospectus. As a result, all proceeds from the sales of the common
stock will go to the selling stockholders and we will not receive any proceeds from the resale of
the common stock by the selling stockholders.
</DIV>

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DILUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Because any selling stockholders who offer and sell shares covered by this prospectus may do so at
various times, at prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions, we have not included in this prospectus information
about the dilution (if any) to the public arising from these sales.
</DIV>

<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following table identifies the selling stockholders and indicates (i)&nbsp;the nature of any
material relationship that such selling stockholder has had with us for the past three years, (ii)
the number of shares and shares subject to options held by the selling stockholders, (iii)&nbsp;the
amount to be offered for each of the selling stockholder&#146;s account, and (iv)&nbsp;the percentage of
outstanding shares of the common stock in our capital to be owned by each selling stockholder after
the sale of the shares offered by them pursuant to this offering. The selling stockholders are not
obligated to sell the shares offered in this prospectus and may choose not to sell any of the
shares or only a part of the shares that they receive. Securities and Exchange Commission, or the
SEC, rules require that we assume that the selling stockholders sell all of the shares offered with
this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Under the Securities Exchange Act of 1934, as amended, or the Exchange Act, any person engaged in a
distribution of the shares offered by this prospectus may not simultaneously engage in market
making activities with respect to our common stock during the applicable &#147;cooling off&#148; periods
prior to the commencement of such distribution. In addition, and without limiting the foregoing,
the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, which provisions may limit the timing of purchases and sales of the
shares by the selling stockholders.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Percentage of Shares</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 1px solid #000000"><B>Beneficially Owned</B><SUP style="font-size: 85%; vertical-align: text-top"><B>3</B></SUP></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Subject to</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares Being</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Before</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left">&nbsp;&nbsp;<B>Selling Stockholder</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned</B><SUP style="font-size: 85%; vertical-align: text-top"><B>1</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Options</B><SUP style="font-size: 85%; vertical-align: text-top"><B>2</B></SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR style="font-size: 1px">
    <TD colspan="21" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">G.A. Ben Binninger<SUP style="font-size: 85%; vertical-align: text-top">4</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">760,683</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">5</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,408,848</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,508,848</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.44</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John M. Philpott<SUP style="font-size: 85%; vertical-align: text-top">8</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">81,250</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">9</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">10</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">11</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Philip Lichtenberger<SUP style="font-size: 85%; vertical-align: text-top">12</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">861,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">13</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">850,781</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">14</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,148,419</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">15</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.62</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Alan McGrevy<SUP style="font-size: 85%; vertical-align: text-top">16</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">726,663</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">17</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">850,781</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">18</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,013,582</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">19</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1.37</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Larry Sullivan<SUP style="font-size: 85%; vertical-align: text-top">20</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">65,625</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">21</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">175,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">10</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">175,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">22</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Richard Redoglia<SUP style="font-size: 85%; vertical-align: text-top">23</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">24</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Multi Tolaney<SUP style="font-size: 85%; vertical-align: text-top">26</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">2,500</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">27</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Betsy Wood Knapp<SUP style="font-size: 85%; vertical-align: text-top">28</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">4,813,809</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">29</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.16</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9.12</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David Nazarian<SUP style="font-size: 85%; vertical-align: text-top">30</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">15,326,295</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">31</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29.18</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">29.13</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">David Mandel<SUP style="font-size: 85%; vertical-align: text-top">32</SUP></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">3,738,049</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">33</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">25,000</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.12</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.07</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1%</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Represents shares owned beneficially by each of the selling stockholders identified
above. This figure includes shares underlying options and warrants held by each of the
selling stockholders that may be exercisable as of, or within 60&nbsp;days after the date of, this
prospectus, but does not include any shares underlying those options that cannot be exercised
within that period.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">2</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares of our common stock underlying options granted to each of the selling
stockholders identified above, whether or not exercisable as of, or within 60&nbsp;days of, the
date of this prospectus.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">3</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Based on 52,522,202 shares outstanding as of January&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">4</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Binninger is one of our directors and has been our Chief Executive Officer and
President since July&nbsp;2007. Mr.&nbsp;Binninger became a director of Kreido Biofuels, Inc. on
January&nbsp;12, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">5</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares beneficially owned includes (a)&nbsp;33,848 shares of common stock
underlying options awarded under the 1997 Program, (b)&nbsp;400,000 shares of common stock
underlying options awarded under the 2006 Plan, (c)&nbsp;226,835 shares of common stock underlying
warrants, all of which are exercisable within 60&nbsp;days of January&nbsp;16, 2008, and (d)&nbsp;100,000
shares of restricted common stock awarded under the 2006 Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">6</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;33,848 shares of common stock underlying options awarded under the 1997
Program, all of which are vested, (b)&nbsp;125,000 shares of common stock underlying options
awarded under the 2006 Plan of which 50,000 shares were vested July&nbsp;27, 2007, the date of
grant, 50,000 shares vest on in four monthly installments at the end of each month beginning
in August&nbsp;2007, provided Mr.&nbsp;Binninger is then serving as our Chief Executive Officer as of
such month-end, and 12,500 shares vest on each of April&nbsp;15, 2008 and October&nbsp;15, 2008 provided
that Mr.&nbsp;Binninger is then serving either as an officer or a director of our company and (c)
1,250,000 shares of common stock underlying options awarded under the 2006 Plan of which
100,000 shares were vested December&nbsp;10, 2007, the date of grant, 100,000 shares vest on in
eleven monthly installments at the end of each month beginning in January&nbsp;2008 and the final
50,000 shares vest on December&nbsp;10, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">7</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;33,848 shares of common stock underlying options awarded under the 1997
Program, (b)&nbsp;125,000 shares of common stock underlying options awarded under the 2006 Plan on
July&nbsp;27, 2007, (c)&nbsp;1,250,000 shares of common stock underlying options awarded under the 2006
Plan on December&nbsp;10, 2007 and (d)&nbsp;100,000 shares of restricted common stock awarded under the 2006 Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">8</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Philpott has been our Chief Financial Officer since July&nbsp;2007. Mr.&nbsp;Philpott
initially joined us on March&nbsp;19, 2007 as Vice President and Chief Accounting Officer.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">9</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares beneficially owned includes 56,250 options to purchase common stock
of which are exercisable within 60&nbsp;days as of January&nbsp;16, 2008 and 25,000&nbsp;shares of common stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">10</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>All of the options held were awarded under the 2006 Plan and vest in eight quarterly
installments commencing on June&nbsp;30, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">11</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 150,000 shares of common stock underlying options awarded under the 2006
Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">12</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Lichtenberger has been our Chief Operating Officer since July&nbsp;2007. He has
served as Executive Vice President and Chief Operating Officer of Kreido Labs since 1997 and
was appointed as Senior Vice President of Operations and Chief Financial Officer of our
company on January&nbsp;12, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">13</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares beneficially owned includes (a)&nbsp;296,002 shares of restricted stock,
(b)&nbsp;255,737 shares of common stock underlying options awarded under the 1997 Program, (c)
308,125 shares of common stock underlying options awarded under the 2006 Plan and (d)&nbsp;1,636
shares of common stock underlying warrants, all of which are exercisable within 60&nbsp;days of
January&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">14</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;270,781 shares of common stock underlying options awarded under the 1997
Program, of which 1/36 vest each month over a three year period commencing on April&nbsp;17, 2005
and (b)&nbsp;580,000 shares of common stock underlying options awarded under the 2006 Plan of which
145,000 were vested on the date of grant, April&nbsp;4, 2007, with the remainder vesting in eight
quarterly installments commencing on June&nbsp;30, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">15</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;296,002 shares of restricted stock, (b)&nbsp;270,781 shares of common stock
underlying options awarded under the 1997 Program, (c)&nbsp;580,000 shares of common stock
underlying options awarded under the 2006 Plan, and (d)&nbsp;1,636 shares of common stock
underlying warrants.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">16</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;McGrevy has served as Vice President of Engineering for Kreido Labs since 2000
and joined Kreido Biofuels, Inc. in the same capacity on January&nbsp;12, 2007</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">17</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares beneficially owned includes (a)&nbsp;162,801 shares of restricted stock,
(b)&nbsp;255,737 shares of common stock underlying options awarded under the 1997 Program, and (c)
308,125 shares of common stock underlying options awarded under the 2006 Plan, all of which
are exercisable within 60&nbsp;days of January&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">18</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;270,781 shares of common stock underlying options awarded under the 1997
Program, of which 1/36 vest each month over a three year period commencing on April&nbsp;17, 2005
and (b)&nbsp;580,000 shares of common stock underlying options awarded under the 2006 Plan of which
145,000 were vested on the date of grant, April&nbsp;10, 2007, with the remainder vesting in eight
quarterly installments commencing on June&nbsp;30, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">19</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;162,801 shares of restricted stock, (b)&nbsp;270,781 shares of common stock
underlying options awarded under the 1997 Program and (c)&nbsp;580,000 shares of common stock
underlying options awarded under the 2006 Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">20</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Sullivan has been our Chief Technology Officer since April&nbsp;2007.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">21</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Number of shares beneficially owned includes 65,625 options to purchase common stock
which are exercisable within 60&nbsp;days as of January&nbsp;16, 2008.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">22</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Consists of 175,000 shares of common stock underlying options awarded under the 2006
Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">23</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Redoglia has been one of our directors since July&nbsp;27, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">24</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares issued to Mr.&nbsp;Redoglia upon his election as a director as provided in
our Outside Director Compensation Program.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">25</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares of common stock underlying options awarded under the 2006 Plan as
provided for in our Outside Director Compensation Program, which options vest one-half (50%)
upon the six month anniversary of the date of grant and one-half (50%) upon the one year
anniversary of the date of grant, provided the option-holder is then serving as a director of
our Company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">26</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Tolaney has been one of our directors since July&nbsp;27, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">27</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes shares issued to Mr.&nbsp;Tolaney upon his election as a director as provided in
our Outside Director Compensation Program.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">28</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Ms.&nbsp;Knapp has been one of our directors and chair of our board of directors since
January&nbsp;12, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">29</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;4,592,331 shares of common stock and (b)&nbsp;warrants to purchase 218,978
shares of common stock beneficially owned by Ms.&nbsp;Knapp and held of record by Knapp Trust u/t/a
7/1/2004, of which Cleon T. Knapp and Betsy Wood Knapp are the trustees, and (c)&nbsp;2,500 shares
issued to Ms.&nbsp;Knapp on July&nbsp;27, 2007 as a director as provided in our Outside Director
Compensation Program .</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">30</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Nazarian has been one of our directors since October&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">31</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;12,795,377 shares of common stock, and (b)&nbsp;warrants to purchase
2,528,418 shares of common stock beneficially owned by Smart Technology Ventures, through its
affiliated venture funds, and certain Nazarian family trusts, and (c)&nbsp;2,500 shares issued to
Mr.&nbsp;Nazarian upon his election as a director as provided in our Outside Director Compensation
Program. Mr.&nbsp;Nazarian serves as general partner of a number of venture funds affiliated with
Smart Technology Ventures.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">32</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Mr.&nbsp;Mandel has been one of our directors since October&nbsp;31, 2007.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">33</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>Includes (a)&nbsp;3,515,457 shares of common stock, and (b)&nbsp;warrants to purchase 220,092
shares of common stock beneficially owned by Mr.&nbsp;Mandel and his family, and (c)&nbsp;2,500 shares
issued to Mr.&nbsp;Mandel upon his election as a director as provided in our Outside Director
Compensation Program.</TD>
</TR>

</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The information provided in the table above with respect to the selling stockholders has been
obtained from each of the selling stockholders. Because the selling stockholders may sell all or
some portion of the shares of common stock beneficially owned by them, only an estimate (assuming
the selling stockholders sell all of the shares offered hereby) can be given as to the number of
shares of common stock that will be beneficially owned by each selling stockholder after this
offering. In addition, the selling stockholders may have sold, transferred or otherwise disposed
of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date
on which he provided the information regarding the shares of common stock beneficially owned by
them, all or a portion of the shares of common stock beneficially owned by them in transactions
exempt from the registration requirements of the Securities Act.
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The shares covered by this prospectus may be offered and sold from time to time by the selling
stockholders. We will not receive any of the proceeds from this offering. The term &#147;selling
stockholders&#148; includes the selling stockholders named in the table above and any donees, pledgees,
transferees or other successors-in-interest selling shares received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership distribution or other non-sale
related transfer. The selling stockholders may sell the shares from time to time and may also
decide not to sell all the shares they are allowed to sell under this prospectus. The selling
stockholders will act independently of us in making decisions with respect to the timing, manner
and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter
market or otherwise, at fixed prices and under terms then prevailing or at prices related to the
then current market price or determined in negotiated transactions. Our common stock is quoted on
the OTC Bulletin Board. The selling stockholders may sell their shares by one or more of, or a
combination of, the following methods:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer as principal and resale by such broker-dealer for its
own account pursuant to this prospectus;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker solicits
purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker-dealer so engaged will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to facilitate
the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an exchange distribution in accordance with the rules of the applicable exchange;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in privately negotiated transactions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>in option transactions.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, any shares that qualify for sale pursuant to Rule&nbsp;144 may be sold under Rule&nbsp;144
rather than pursuant to this prospectus. There is no assurance that the selling stockholders will
sell all or a portion of the shares being offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In connection with distributions of the shares or
otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may also sell the common
stock short and redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may also pledge shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution, may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts
or concessions from the selling stockholders in amounts to be negotiated immediately prior to the
sale. In offering the shares covered by this prospectus, the selling stockholders and any
broker-dealers who execute sales for the selling stockholders may be deemed to be &#147;underwriters&#148;
within the meaning of the Securities Act in connection with such sales. Any profits realized by
the selling stockholders and the compensation of any broker-dealer may be deemed to be underwriting
discounts and commissions. Selling stockholders who are deemed to be &#147;underwriters&#148; within the
meaning of the Securities Act will be subject to the prospectus delivery requirements of the
Securities Act and may be subject to statutory liabilities, including but not limited to,
liabilities under Sections&nbsp;11, 12 and 17 of the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The selling stockholders and any other persons participating in such distributions may also be
subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation, Regulation&nbsp;M. Regulation&nbsp;M may limit the timing of purchases and
sales of shares by the selling stockholders and any other persons and may restrict, for a period of
up to five business days prior to the commencement of the distribution, the ability of any person
engaged in a distribution of shares of our common stock to engage in market-making activities with
respect to these shares. The selling stockholders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules thereunder relating to
stock manipulation, particularly Regulation&nbsp;M. We will make copies of this prospectus available to
the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the
Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To comply with the securities laws of certain states, if applicable, the shares must be sold in
such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification requirement is available
and is complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To our knowledge, there are currently no plans, arrangements or understandings between any selling
stockholder and any underwriter, broker-dealer or agent regarding the sale of the common stock by
the selling stockholders.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">At the time a particular offer of shares is made, if required, a prospectus supplement or, if
appropriate, a post-effective amendment to the registration statement of which this prospectus is a
part, will be distributed that will set forth the number of shares being offered and the terms of
the offering, including the name of any underwriter, dealer or agent, the name of any selling
stockholder, the purchase price paid by any underwriter, any discount, commission and other item
constituting compensation, any discount, commission or concession allowed or reallowed or paid to
any dealer, and the proposed selling price to the public.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We will bear all costs, expenses and fees in connection with the registration of the shares of
common stock covered by this prospectus, including, without limitation, all registration and filing
fees and fees and expenses of our counsel and our accountants. The selling stockholders will pay
any underwriting discounts and commissions and expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares of common stock. The selling stockholders may indemnify
any broker-dealer that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our financial statements as of December&nbsp;31, 2006 and the period from inception (January&nbsp;13, 1995)
through December&nbsp;31, 2006 incorporated by reference from our Form 10-KSB/A filed with the SEC on
June&nbsp;27, 2007 have been audited by Vasquez &#038; Company LLP, independent accountants, as set forth in
its report accompanying the financial statements and are included herein in reliance upon the
report.
</DIV>

<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The validity of the shares being offered by this prospectus will be passed upon for us by DLA Piper
US, LLP.
</DIV>

<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INCORPORATION OF DOCUMENTS BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The SEC allows us to &#147;incorporate by reference&#148; into this prospectus the information we file with
the SEC, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of this prospectus, and
the information that we file later with the SEC will automatically update and supersede the
information contained in this prospectus. We incorporate by reference the following documents we
filed with the SEC pursuant to Section&nbsp;13 of the Exchange Act:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Annual Report on Form 10-KSB, filed on April&nbsp;4, 2007 as amended by Form
10-KSB/A, filed on June&nbsp;27, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Reports on Form 10-QSB filed on May&nbsp;17, 2007, August&nbsp;14, 2007 and
November&nbsp;14, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Reports on Form 10-QSB/A filed on June&nbsp;27, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed with the SEC on April&nbsp;10, 2007, April&nbsp;16, 2007,
May&nbsp;2, 2007, June&nbsp;6, 2007, June&nbsp;14, 2007, June&nbsp;25, 2007, June&nbsp;27, 2007, June&nbsp;28, 2007,
July&nbsp;30, 2007, September&nbsp;12, 2007, November&nbsp;5, 2007 and December&nbsp;13, 2007; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Report on Form 8-K/A filed with the SEC on June&nbsp;15, 2007.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also incorporated by reference into this prospectus are all documents that we may file with the SEC
under Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
prior to the sale of all the shares covered by this prospectus. These documents include periodic
reports, such as annual reports on Form 10-KSB, quarterly reports on Form 10-QSB and current
reports on Form 8-K, as well as proxy statements. Unless expressly incorporated into this
registration statement, a report furnished to the SEC on Form 8-K under the Exchange Act shall not
be incorporated by reference into this registration statement. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">modified or superseded for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this prospectus, except as so modified or
superseded.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you are a stockholder, we may have sent you some of the documents incorporated by reference, but
you can obtain any of them through us or the SEC. Documents are available from us without charge,
excluding all exhibits not specifically incorporated by reference into this prospectus. You may
request a copy of these documents by writing or telephoning us at the following address:
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Investor Relations<BR>
Kreido Biofuels, Inc.<BR>
1070 Flynn Road<BR>
Camarillo, California 93012<BR>
(805)&nbsp;389-3499

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You should rely only on the information incorporated by reference or provided in this prospectus
and any supplement. We have not authorized anyone else to provide you with different information.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The SEC allows us to &#147;incorporate by reference&#148; information into this registration statement, which
means that we can disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to be part of this
registration statement, except for any information superseded by information in this registration
statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following documents filed by our company with the SEC are incorporated herein by reference:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Annual Report on Form 10-KSB, filed on April&nbsp;4, 2007 as amended by Form
10-KSB/A, filed on June&nbsp;27, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Reports on Form 10-QSB filed on May&nbsp;17, 2007, August&nbsp;14, 2007 and
November&nbsp;14, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Quarterly Reports on Form 10-QSB/A filed on June&nbsp;27, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed with the SEC on April&nbsp;10, 2007, April&nbsp;16, 2007,
May&nbsp;2, 2007, June&nbsp;6, 2007, June&nbsp;14, 2007, June&nbsp;25, 2007, June&nbsp;27, 2007, June&nbsp;28, 2007,
July&nbsp;30, 2007, September&nbsp;12, 2007, November&nbsp;5, 2007 and December&nbsp;13, 2007; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Report on Form 8-K/A filed with the SEC on June&nbsp;15, 2007.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All reports (other than portions of Current Reports on Form 8-K furnished pursuant to Item&nbsp;2.02 or
Item&nbsp;7.01 of Form 8-K, unless otherwise indicated therein) filed pursuant to Section&nbsp;13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this registration statement and prior to the
filing of a post-effective amendment which indicates that all securities offered hereby have been
sold or which de-registers all securities then remaining unsold shall be deemed to be incorporated
by reference into this registration statement and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may read and copy any reports, statements or other information we have filed at the SEC&#146;s
Public Reference Room at 100 F Street, N.E., Room&nbsp;1580, Washington, DC 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the Public Reference Rooms. Our filings are also
available on the Internet at the SEC&#146;s website at http://www.sec.gov.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are
registering an aggregate of 5,475,423 shares of common stock issuable pursuant to the Plans.
We are authorized to issue 300,000,000 shares of common stock, 52,522,202&nbsp;of which were issued
and outstanding as of January&nbsp;16, 2008. Holders of our common stock are entitled to one vote for
each share on all matters submitted to a stockholder vote and vote together in one class, except as
required by applicable law. Holders of our common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the election of directors
can elect all of the directors. Holders of shares of our common stock representing a majority of
the voting power of the capital stock issued, outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of stockholders. A vote by
the holders of a majority of the outstanding shares of the common stock is required to effectuate
certain fundamental corporate changes such as liquidation, merger or an amendment to the articles
of incorporation.
</DIV>


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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Holders of the common stock are entitled to share equally on a pro rata basis in all dividends that
our board of directors, in its discretion, declares from legally available funds. In the event of
liquidation, dissolution or winding up, each outstanding share of common stock will entitle its
holder to participate pro rata in all assets that remain after payment of liabilities. Holders of
the common stock have no preemptive rights and no conversion rights, and there are no redemption
provisions applicable to the common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;78.7502 of Nevada Revised Statutes provides as follows with respect to indemnification of
directors and officers:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NRS 78.7502 Discretionary and mandatory indemnification of officers, directors, employees and
agents: General provisions.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A corporation may indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of the corporation, by reason
of the fact that he is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses, including
attorneys&#146; fees, judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and that, with respect to any
criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A corporation may indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses, including amounts paid in settlement and attorneys&#146; fees
actually and reasonably incurred by him in connection with the defense or settlement of the action
or suit if he acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for
such expenses as the court deems proper.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To the extent that a director, officer, employee or agent of a corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1
and 2, or in defense of any claim, issue or matter therein, the corporation shall indemnify him
against expenses, including attorneys&#146; fees, actually and reasonably incurred by him in connection
with the defense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">When indemnification is discretionary, Section&nbsp;78.751 of Nevada Revised Statutes provides as
follows with respect to the authorization required to carry out the indemnification:
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->22<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>NRS 78.751 Authorization required for discretionary indemnification; advancement of expenses;
limitation on indemnification and advancement of expenses.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any discretionary indemnification under <U>NRS 78.7502</U> unless ordered by a court or advanced
pursuant to subsection&nbsp;2, may be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or agent is proper in
the circumstances. The determination must be made:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By the stockholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>By the board of directors by majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If a majority vote of a quorum consisting of directors who were not parties to
the action, suit or proceeding so orders, by independent legal counsel in a written
opinion; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, by independent legal counsel in a written opinion.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The articles of incorporation, the bylaws or an agreement made by the corporation may provide that
the expenses of officers and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which corporate personnel other
than directors or officers may be entitled under any contract or otherwise by law.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to
this section:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Does not exclude any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under the articles of incorporation or any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for
either an action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a court pursuant to
NRS 78.7502 or for the advancement of expenses made pursuant to subsection 2, may not
be made to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of such a
person.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Article&nbsp;Eleven of our Bylaws provide that we must indemnify any director, officer, employee or
agent of our company who becomes a party to an action against expenses including attorney fees,
judgments, fines and amounts paid in settlement if that person acted in good faith and reasoned his
conduct or action to be in the best interest of our company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As permitted under Sections&nbsp;78.7502, 78.751 and 78.752 of the Nevada Revised Statutes, and our
Bylaws, our company has entered into separate Indemnity Agreements with each of its officers and
directors. Under each Indemnity Agreement, the Company undertakes to obtain and maintain in effect
directors&#146; and officers&#146; liability insurance under such insurance is not reasonably available or
cost prohibitive in comparison to the coverage provided. In addition, each agreement provides for
mandatory indemnity coverage for certain third party actions, derivative actions and defense costs
in excess of amounts covered by insurance as valid indemnity clause, bylaw or agreement.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->23<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not Applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Reference</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Kreido Laboratories 1997 Stock<BR>
Compensation Program</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2006 Equity Incentive Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.7 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of DLA Piper US, LLP</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant for Philip Lichtenberger</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of DLA Piper US, LLP
(included in Exhibit&nbsp;5.1)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Registered
Public Accounting Firm</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included in
signature page)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Outside Director Compensation Program
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.3 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on July&nbsp;30, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Incentive Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.9 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Qualified Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.10 to
the Current Report
on Form&nbsp;8-K filed
with the Securities
and Exchange
Commission on
January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. Undertakings.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We hereby undertake:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to include any prospectus required by Section&nbsp;10(a)(3) of the
Securities Act, as amended;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which,</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>individually or in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>PROVIDED, HOWEVER, that undertakings set forth in paragraphs (i)&nbsp;and (ii)&nbsp;above do not apply
if the information required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by us pursuant to Section&nbsp;13 or 15(d) of the Exchange
Act that are incorporated by reference in this registration statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We hereby undertake that, for purposes of determining any liability under the
Securities Act, each filing of our annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and persons controlling our company pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by our company of expenses incurred or paid by a
director, officer or controlling person of our company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, our company will, unless in the opinion of
our counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of
such issue.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Camarillo, State of California, on January&nbsp;23, 2008.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>KREIDO BIOFUELS, INC.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      /s/ John M. Philpott
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">John M. Philpott, Chief Financial Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints G.A. Ben Binninger and John M. Philpott as his true and lawful attorney-in-fact and agent,
with full power of substitution and re-substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective amendments) to
this registration statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or of
their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, this registration statement has been signed by
the following persons in the capacities and on the dates stated.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="42%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ G.A. Ben Binninger
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
G.A. Ben Binninger</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Executive Officer, Director<BR>
(Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ John M. Philpott
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
John M. Philpott</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Financial Officer<BR>
(Principal Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ Betsy Wood Knapp
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Betsy Wood Knapp</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ David Mandel
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
David Mandel</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ David Nazarian
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
David Nazarian</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ Richard Redoglia
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Richard Redoglia</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<TR valign="bottom" style="padding-top: 1em">
    <TD align="center" valign="top">/s/ Murli Tolaney
<DIV style="font-size: 1pt; border-bottom: 1px solid #000000">&nbsp;</DIV>
Murli Tolaney</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">January&nbsp;23, 2008</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>EXHIBIT INDEX</B></U>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="13%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Description</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left"><B>Reference</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Kreido Laboratories 1997 Stock<BR>
Compensation Program</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2006 Equity Incentive Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.7 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of DLA Piper US, LLP</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant for Philip Lichtenberger</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of DLA Piper US, LLP
(included in Exhibit&nbsp;5.1)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Independent Registered
Public Accounting Firm</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included in
signature page)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Outside Director Compensation Program
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.3 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on July&nbsp;30, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Incentive Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.9 to the
Current Report on
Form&nbsp;8-K filed with
the Securities and
Exchange Commission
on January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Non-Qualified Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Incorporated by
reference to
Exhibit&nbsp;10.10 to
the Current Report
on Form&nbsp;8-K filed
with the Securities
and Exchange
Commission on
January&nbsp;16, 2007
(File No.
333-130606).</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
[{"type": "S-8", "sequence": "1", "filename": "v37232sv8.htm", "description": "FORM S-8", "secsgml_size_bytes": 199360}]
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Kreido Biofuels, Inc.
Table of Contents
As filed with the Securities and Exchange Commission on January 23, 2008
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
KREIDO BIOFUELS, INC.
(Name of Small Business Issuer in Its Charter)
Nevada
2869
20-3240178
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
1070 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 389-3499
(Address and Telephone Number of Principal Executive Offices)
(Address of Principal Place of Business or Intended Principal Place of Business)
Kreido Laboratories 1997 Stock Compensation Program
Kreido Biofuels, Inc. 2006 Equity Incentive Plan
Kreido Laboratories Consultants' Warrants
Kreido Laboratories Restricted Stock Grants
(Full title of the plan)
G. A. BEN BINNINGER
CHIEF EXECUTIVE OFFICER
1070 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 389-3499
(Name, Address and Telephone Number of Agent for Service)
Copy to:
JOHN H. HEUBERGER, ESQ.
DLA PIPER US LLP
203 NORTH LASALLE STREET, SUITE 1800
CHICAGO, IL 60601-1293
(312) 368-4014
CALCULATION OF REGISTRATION FEE
Title of Securities
Proposed Maximum
Proposed Maximum
to be
Amount to be
Offering Price Per
Aggregate Offering
Amount of
Registered(1)
Registered
Share(2)
Price(2)
Registration Fee(2)
Common Stock,
$0.001 par value per share
5,475,423
$0.37
$2,025,906.51
$79.62
(1)
An indeterminate number of additional shares of common stock shall be issuable
pursuant to Rule 416 to prevent dilution resulting from stock splits, stock dividends or
similar transactions and in such an event the number of shares registered shall automatically
be increased to cover the additional shares in accordance with Rule 416 under the Securities
Act of 1933, as amended, or the Securities Act.
(2)
Estimated pursuant to Rule 457(c) solely for purposes of calculating amount of
registration fee, based upon the average of the high and low prices reported on January 16,
2008, reported on the Over-The-Counter Bulletin Board (the "OTC Bulletin Board").
Table of Contents
EXPLANATORY NOTE
This Registration Statement constitutes a "reoffer" prospectus prepared in accordance with
Instruction C of the General Instructions to Form S-8 and Part I to Form S-3. This prospectus may
be utilized by certain participants under the Kreido Laboratories 1997 Stock Compensation Program,
the Kreido Biofuels, Inc. 2006 Equity Incentive Plan, Kreido Laboratories Consultants' Warrants and
Kreido Laboratories restricted stock grants (the "Plans") to cover reoffers and resales of the
shares of common stock received as grants under, or as a result of the exercise of stock options
granted under, the Plans. This Registration Statement also contains the information required
pursuant to Part II of Form S-8.
The document(s) containing the information specified in Part I of Form S-8 (plan information and
registrant information) will be sent or given to plan participants as specified by Rule 428(b)(1)
under the Securities Act. In accordance with Rule 428 under the Securities Act and the "Note" to
Part I of Form S-8, these documents are not being filed with the SEC either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the
Securities Act. These documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Part II of this Form S-8, taken together, constitute a prospectus
that meets the requirements of Section 10(a) of the Securities Act.
Table of Contents
4,120,849 Shares of Common Stock
This prospectus relates to the reoffer and resale from time to time by certain of our stockholders
identified herein under the heading "Selling Stockholders" of up to 4,120,849 shares of our common
stock issuable upon the exercise of outstanding options, rights or awards granted to such selling
stockholders pursuant to the Kreido Laboratories 1997 Stock Compensation Program (the "1997
Program"), the 2006 Equity Incentive Plan (the "2006 Plan"), warrants granted to Kreido Laboratories
consultants (the "Consultant Warrants") and restricted stock grants to Kreido Laboratories officers
(together with the 1997 Program, the 2006 Program and the Consultant Warrants, the "Plans").
The selling stockholders identified in this prospectus may offer the shares from time to time
through public or private transactions at prevailing market prices, at prices related to prevailing
market prices or at privately negotiated prices. We will not receive any proceeds from the sale of
the shares covered by this prospectus. We will pay all of the expenses associated with this
prospectus. Brokerage commissions and similar selling expenses, if any, attributable to the offer
or sale of the shares will be borne by the applicable selling stockholder.
Our common stock is quoted on the OTC Bulletin Board under the trading symbol "KRBF.OB." On
January 16, 2008, the last reported closing price of our common stock was $0.38 per share on the
OTC Bulletin Board.
The common stock offered pursuant to this prospectus involves a high degree of risk. For more
information, please see the section of this prospectus titled "Risk Factors," beginning on page 3.
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is January 23, 2008
TABLE OF CONTENTS
Item
Page
PROSPECTUS SUMMARY
1
RISK FACTORS
3
FORWARD LOOKING STATEMENTS
14
WHERE YOU CAN FIND MORE INFORMATION
14
USE OF PROCEEDS
15
DILUTION
15
SELLING STOCKHOLDERS
15
PLAN OF DISTRIBUTION
17
EXPERTS
19
LEGAL MATTERS
19
INCORPORATION OF DOCUMENTS BY REFERENCE
19
EXHIBIT 4.1
EXHIBIT 5.1
EXHIBIT 10.1
EXHIBIT 23.2
Unless the context otherwise requires or otherwise specifies, references in this prospectus to
"Kreido Biofuels," "our company," "we," "us," and "our" refer to Kreido Biofuels, Inc., a Nevada
corporation, and our subsidiaries.
We have not authorized anyone to provide you with information different from that contained or
incorporated by reference in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are
permitted. The information contained in, or incorporated by reference in, this prospectus is
accurate only as of the date of this prospectus, or the date of the document in which it appears,
regardless of the time of delivery of this prospectus or of any sale of common stock.
Table of Contents
PROSPECTUS SUMMARY
Kreido Biofuels, Inc.
We took our current form on January 12, 2007, when our wholly-owned subsidiary, Kreido Acquisition
Corp. ("Acquisition Sub") and Kreido Laboratories executed a Merger Agreement and Plan of
Reorganization (the "Merger Agreement"). On January 12, 2007, Acquisition Sub merged with and into
Kreido Laboratories, with Kreido Laboratories remaining as the surviving corporation and as our
wholly-owned subsidiary (the "Merger").
The Merger was treated as a recapitalization of our company for accounting purposes. Our
historical financial statements before the Merger were replaced with the historical financial
statements of Kreido Laboratories in all filings with the Securities and Exchange Commission
("SEC") subsequent to January 12, 2007. The offering provided net proceeds of approximately $22.9
million, which included the repayment of $123,000 in outstanding notes and the cancellation of
indebtedness of approximately $250,000.
Concurrently with the closing of the Merger, we completed a private offering of 18,518,519 units of
our securities (the "Units") at a purchase price of $1.35 per Unit. Each Unit consisted of one
share of our common stock and a warrant to acquire one share of our common stock at an exercise
price of $1.85 per share. The warrants are exercisable for a period of five years from January 12,
2007.
Also contemporaneously with the closing of the Merger, Kreido split-off another wholly-owned
subsidiary, Gemwood Leaseco, Inc., a Nevada corporation, through the sale of all of the outstanding
capital stock of Gemwood Leaseco, Inc. (the "Split-Off"). As a consequence of the sale of Gemwood
Leaseco, Inc., we discontinued all of our business operations which we conducted prior to the
closing of the Merger, and spun off all material liabilities existing prior to that date in any way
related to our pre-closing business operations. Our primary operations are now those formerly
operated by Kreido Laboratories, as well as other business activities which we have developed since
January 12, 2007, as described in this prospectus.
As the result of the Merger, the Split-Off and the change in our business and operations from an
unrelated services company to a technology company focusing on the production of biofuel, a
discussion of the past financial results of our company is not pertinent and our financial results
as consolidated with Kreido Laboratories, the accounting acquirer, are presented here. Thus, the
discussion of our financial results addresses only Kreido Laboratories.
Kreido Laboratories is a corporation founded to develop proprietary technology for building
micro-composite materials for electronic applications. In 1995, Kreido Laboratories began to
develop the technology used in the design and assembly of our STT
®
Reactor. Kreido Laboratories
thereafter sought to develop the technology to improve the speed, completeness and efficiency of
certain chemical reactions, including esterifications and transesterifications, in the chemical
industries. We designed and developed the STT
®
Reactor which incorporates our proprietary
"spinning tube-in-tube" design configuration to improve the speed and yield of chemical reactions.
One of the EPA's largest laboratories has been using our STT
®
Reactor-based technology since 2004
to develop and evaluate new chemical processes and develop and optimize protocols for use of the
STT
®
Reactor by public and private entities. Beginning in the last quarter of 2005, Kreido
Laboratories began to evaluate the advantages of the STT
®
Reactor specifically for the production
of biodiesel. In the first quarter of 2006, Kreido Laboratories elected to focus primarily on the
biodiesel industry and began to prepare and execute our current business plan.
The Offering
This prospectus relates to the reoffer and resale from time to time by certain of our stockholders
identified herein under the heading "Selling Stockholders" of up to 4,120,849 shares of our common
stock issuable upon the exercise of outstanding options, rights or awards granted to such selling
stockholders pursuant to the Plans.
Our common stock may be offered and resold from time to time by the selling stockholders identified
in this prospectus. It is anticipated that the selling stockholders will offer shares for sale at
prevailing prices on the OTC Bulletin Board on the date of sale. We will not receive any proceeds
from the sales of common stock by the selling stockholders under this prospectus. We will pay all
of the expenses associated with this prospectus. Brokerage
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commissions and similar selling expenses, if any, attributable to the offer or sale of the shares
will be borne by the applicable selling stockholder.
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RISK FACTORS
An investment in our common stock is highly speculative and involves a high degree of risk.
Investors should carefully consider the risks below before making an investment decision. Our
business, financial condition or results of operations could be materially adversely affected by
any of these risks. In such case, the trading price of our common stock could decline and
investors could lose all or part of their investment.
Risks Related to the Contemplated Conduct of our Business
We have had no operating history as a producer of biodiesel or as a producer of equipment systems
for the biodiesel industry. Our anticipated results of operation and financial condition are
planned and estimated on the basis of our assumptions with respect to our anticipated operations.
We have no operating history in our contemplated biodiesel production business and, to date, have
not earned any revenues in connection with that business. We have no experience operating, selling
or licensing processing equipment or complete systems to the biodiesel or other fuel industry. We
have only recently, in the fourth quarter of 2005, begun to pursue commercial applications for the
STT® Reactor in the biodiesel industry. Accordingly, it may be difficult for investors to evaluate
our business prospects or our ability to achieve our business objectives. If our efforts do not
result in both revenues and profits, we may be forced to cease operations and liquidate, and
investors may lose their entire investment.
If we cannot successfully address these risks, our contemplated business and the anticipated
results of our contemplated operations and financial condition would suffer.
We have been a development stage company since 1995 and have a history of significant operating
losses. We may not ever achieve or maintain profitability.
We have incurred significant operating losses since our inception, and, as of September 30, 2007,
we have accumulated a deficit of approximately $25.8 million. We may continue to incur operating
losses, depending largely upon the commercial success of our STT® Reactor and STT® Production
Units. To date, we have neither sold nor licensed any commercial-scale products. We will need to
generate revenues in excess of our expenses to become profitable, and we may be unable to do so.
If we do not become profitable, the value of our common stock may decline.
Our operating losses may increase as we continue to incur costs for manufacturing, sales and
marketing, research and development and legal and general corporate activities. Whether we achieve
and maintain profitability depends in part upon our ability, alone or with others, to successfully
complete the development of biodiesel production facilities, to sell biodiesel at a profit, to
successfully complete the development of our equipment systems and to sell or license those
equipment systems at prices that enable us to generate a profitable return.
We may be required to adapt our business plan to capital market and alternative energy market
changes.
We may find it necessary or advisable to substantially alter or materially change our
commercialization activities to respond to changes that occur in the future. In October 2007, we
modified our business plan to focus on the development of the Wilmington, North Carolina location,
our first biodiesel production plant, with a plan to expand the site to be occupied by an
additional plant expansion when time and capital permits.
Although core to our business plan is to own and operate biodiesel production plants in the United
States for our own account, part of our contemplated business strategy is to license STT®
Production Units to others both within and outside of the United States. The portion of our
contemplated business model that calls for us to license STT® Production Units to others is
dependent on the market's willingness to adopt a new biodiesel production technology. Our STT®
Production Unit may never gain acceptance from the biodiesel market, which would put in jeopardy
that portion of our business model that relies on licensing STT® Production Units to others. This
risk is amplified by the fact that, although we are currently building our first commercial-scale
STT® Production Units, we have not
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completed building our first such unit. None of our products are currently being used to produce
biodiesel on a commercial scale.
Should biodiesel producers fail to adopt our STT® Biodiesel Production Units, or should a superior
competing technology be developed, it may not be possible to fund our operations as expected. The
degree of market acceptance of our STT® Biodiesel Production Units will depend on numerous factors,
including the effectiveness of our product and the biodiesel market's willingness to use a new
processing technology.
Our ability to execute our business plan is dependent on the growth and maintenance of substantial
demand for biodiesel in the United States. It is impossible to predict what the current demand for
biodiesel is since so little of it is currently being produced and all that is being produced is
being sold. Accordingly, the failure of a biodiesel market to develop could adversely affect our
anticipated results of operations and financial condition. Additionally, we are dependent on the
use of vegetable oils as the key raw material in the production of biodiesel. The cost of vegetable
oils has continued to rise over the last six months which has made it more difficult for biodiesel
production plants to make positive cash flow and profits. If we are unable to make positive cash
flows and profits over a reasonable period of time we may have to change or scale back our business
plan.
We have not produced or operated any commercial-scale STT® Reactors or STT® Production Units.
We have designed, built, and licensed two bench-scale STT® Reactors to the specialty chemical and
pharmaceutical markets and have designed and built pilot-scale STT® Reactors ranging from 8 to 100
ml capacity. We have also designed and are now building commercial-scale STT® Production Units for
producing biodiesel. We have yet to license our first STT® Production Unit or install one in our
own biodiesel production plant. A full size STT® Reactor is currently being tested for limited
operations in our manufacturing facility. We do not know if our commercial-scale STT® Production
Unit will produce biodiesel fuel to ASTM standard in the volumes that we anticipate or whether our
equipment systems will gain commercial acceptance in the biodiesel industry. Therefore, we are
uncertain whether we will be able to sell, license or lease any STT® Biodiesel Production Units to
any third parties. If we are unable to produce and operate our equipment systems on a commercial
scale and generate biodiesel to ASTM standard, then we may be forced to cease operations or to
obtain additional capital to further develop our equipment systems. Additional capital may not be
available on terms acceptable to us or at all.
We will require additional funding to execute our business plan, and additional funding may not be
available. If additional funding is available, it may not be offered to us on terms that are
satisfactory to our board of directors.
We will require additional capital in the future to sufficiently fund our operations. We may not
be able to obtain additional capital on terms favorable to us or at all. We have consumed
substantial amounts of capital to date, and we expect to increase our operating expenses over the
coming years as we build our pilot unit and first biodiesel production unit, expand our facilities
and infrastructure and prepare for commercialization activities.
Based upon our projected activities, we believe that we will need at least an additional $20
million in the first quarter of 2008 in order to support our current plan's funding needs of
completing the first biodiesel production plant, funding the start-up plant costs and commencing
the construction on the STT® Reactors for the next biodiesel production plant. Since the first
plant, and any subsequent plants, will require additional funding to complete, we have not
committed to constructing an additional plant only to starting the construction of the next four
STT® Reactors. However, if funding is not available at the level we may need or at terms acceptable
to us or our investors, we may need to change or scale back our operating plans, which would
negatively affect existing stockholders. If adequate funds are not available, we likely will not
be successful in executing our business plan as anticipated and, as a result, we may be forced to
curtail growth, suspend operations and explore other alternatives in an effort to realize value for
our stockholders.
We are considering a combination of funding sources including a warrant exchange offer, local
government bond financing, equipment and raw materials inventory lines-of-credits, project
financing and a preferred stock offering. Market conditions will affect the availability of funds
from various sources and there will have to be some level of collateral and guarantees provided for
many of the financing alternatives. We cannot be certain that additional financing will not be
needed beyond our current and projected needs or will be available when required and, if available,
that it will be on terms satisfactory to us. Future financings may be dilutive to existing
stockholders. If
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we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary
to meet our funding requirements, this would adversely affect our anticipated results of operations
and financial condition.
A substantial part of our assumptions regarding our financial advantages in the biodiesel
production business are estimates and therefore may not be correct.
We believe that our STT
®
Production Units will have higher yields and a less per gallon cost than
conventional biodiesel production systems. This is based, in part, on what we believe will be
favorable facilities construction costs and operating efficiencies. If the actual cost exceeds the
costs that we project to construct our planned biodiesel production facilities, it would adversely
affect the amortization of our capital costs. This in turn would decrease or eliminate certain of
our anticipated costs advantages with respect to conventional biodiesel plants.
We believe that our per gallon cost of producing biodiesel will be less than conventional biodiesel
producers based primarily on less cost incurred from energy usage and the catalyst material used in
making our biodiesel. If the actual use of energy and catalyst material is more than expected then
the costs advantages that we anticipate may not be present, and we may not be able to achieve our
expected profits or any profits at all.
The cost of soybean, palm oil and canola/rapeseed oil and the market price of biodiesel has been
fluctuating and is subject to supply and demand conditions which may affect our profitability and
cash flow .
The demand for soybean oil, palm oil and canola/rapeseed oil has been increasing in 2007 and may
continue to do so in the future. The increase in demand has increased the cost of these feedstock
raw materials. According to the Energy Management Institute Alternative Fuels Index
sm
,
the average producer price of B100 diesel across 52 major metropolitan areas in the United States
during the week ending December 20, 2007 was $3.91 per gallon, and net of site specific
transportation and handling costs, it was $3.49 per gallon. It is possible that this price range
will not remain the relevant price range for biodiesel in and after 2008. It is possible that
potential supply and demand conditions may adversely affect the various cost of raw materials or
the price level for biodiesel. If the cost of these feedstock raw materials remains high and if
the wholesale price for biodiesel does not remain at a level that permits us to generate revenues
in excess of our costs, after taking into account tax incentives and credits, then we may not
become or remain profitable or have positive cash flow, in which case it will likely affect our
financial condition and viability as an on-going business.
Our ability to execute our business plan depends on conditions the satisfaction of which is not
under our control.
Our ability to successfully execute our business plan depends on the satisfaction of several
business (in addition to capital) conditions, including:
•
obtaining all required permits, consents and regulatory approvals from government
agencies and other third parties for our anticipated construction and operation of
owned biodiesel production plants and related facilities, as well as for the future
operation of those facilities;
•
successfully commercializing the STT
®
Reactor technology for biodiesel;
•
arranging reasonably priced insurance to cover operating risks and other adverse
outcomes which could impair the business; and
•
market conditions for fuels that make biodiesel a competitively priced product.
Since we have yet to begin full operation as a biodiesel business, there is no certainty that we
will be able to achieve satisfaction of any or all of the above conditions. If we fail to do so,
we may be forced to cease operations and to liquidate, in which case investors may not be able to
receive any return of their invested capital. Also, the process of obtaining permits in certain
locations may increase the cost and delay plant construction.
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We are dependent upon our officers for management and direction, and the loss of any of these
persons could adversely affect our anticipated results of operations and financial condition.
We are dependent upon our officers for implementation of our current stage of development for our
business plan. The loss of any of our key officers, including Philip Lichtenberger, our Chief
Operating Officer and Alan McGrevy, our Vice President of Engineering, could have a material
adverse effect upon the anticipated results of our contemplated operations and financial condition
and would likely delay or prevent the achievement of our contemplated business objectives. We do
not maintain "key person" life insurance for any of our officers.
We may be unable to effectively manage our growth.
Our strategy envisions expanding our business beyond our status as a development stage company. We
anticipate significant expansion in our manpower, facilities and infrastructure in the future and
expect that greater expansion will be necessary to address potential growth in our customer base
and market opportunities. To manage the expected growth of our operations and personnel, we will
need to improve our transaction processing, operational and financial systems, procedures and
controls. The current and planned personnel, systems, procedures and controls may not be adequate
to support our future operations. We may be unable to hire, train, retain and manage required
personnel or to identify and take advantage of existing and potential strategic relationships and
market opportunities.
If we fail to effectively manage our growth, our anticipated results of operation and financial
condition could be adversely affected. Growth may place a strain on our management systems and
resources. We must continue to refine and expand our business development capabilities, our
systems and processes, and our access to financing sources. As we grow, we must continue to hire,
train, supervise and manage new employees. We cannot assure that if we do expand our business that
we will be able to:
•
meet our capital needs;
•
expand our systems effectively, efficiently or in a timely manner;
•
allocate our human resources optimally;
•
identify and hire qualified employees or retain valued employees; or
•
incorporate effectively the components of any business that we may acquire in our
effort to achieve growth.
We may be unable to attract and retain key personnel.
Our development and success is dependent upon our management's ability to effectuate our transition
into a biodiesel technology-development and production company. Our anticipated product
development and manufacturing efforts capability will require additional management not yet part of
us. There is intense competition for qualified management, research, development and manufacturing
personnel in the chemical, engineering and biofuels fields. Therefore, we may not be successful in
attracting and retaining the qualified personnel necessary to develop our business.
New technologies could render our biodiesel production system obsolete.
The development and implementation of new technologies may result in a significant reduction in the
costs of biodiesel production. For instance, any technological advances in catalysis and/or large
scale micro-channel reactor systems could have an adverse effect on our contemplated business. We
cannot predict whether new technologies may become available, the rate of acceptance of new
technologies by competitors or the costs associated with new technologies. In addition, advances
in the development of alternatives to biodiesel could significantly reduce demand for or eliminate
the need for biodiesel.
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Any advances in technology that require significant capital expenditures to remain competitive or
that reduce demand or prices for biodiesel could adversely affect our anticipated results of
operations and financial condition.
Strategic relationships with feedstock suppliers, fabricators, building contractors, equipment
suppliers and other unrelated third parties on which we rely are subject to change.
Our ability to develop our business will depend on our ability to identify feedstock suppliers,
construction contractors, equipment fabricators and customers and to enter into suitable commercial
arrangements with those suppliers, contractors, fabricators and customers. Our success in this
area will also depend on our ability to select and evaluate suitable projects, as well as to
consummate transactions in a highly competitive environment.
The demand for construction and contract manufacturing companies that are qualified to build
biodiesel production plants and equipment has increased. Some companies report that their
construction backlogs are as many as four years. While we have the capacity to manufacture our
STT® Reactors in house, we do not have the capability in-house to construct and fabricate the
entire biodiesel production plant and equipment and we intend to rely on strategic relationships
with third-party construction and fabrication companies, some of which we have not yet developed.
Furthermore, the recent growth in biodiesel plant construction has caused a backlog on certain
specialized equipment. One example of such specialized equipment is centrifuges, for which there
is a reported backlog of six months for some models. The failure to secure agreements with
construction companies and/or for the requisition of such specialized equipment may adversely
affect our anticipated results of operations and financial condition.
To develop our business, we plan to use the business relationships of our management to form
strategic relationships. These relationships may take the form of joint ventures with other
private parties or local government bodies, contractual arrangements with other companies,
including those that supply feedstock that we will use in our business, or minority investments
from third parties. We may not be able to establish these strategic relationships, or, if
established, we may not be able to maintain these relationships, particularly if members of the
management team leave us. In addition, the dynamics of our relationships with strategic partners
may require us to incur expenses or undertake activities we would not otherwise be inclined to
incur or undertake to fulfill our obligations to these partners or maintain these relationships.
If we do not successfully establish or maintain strategic relationships, we may not be able to
achieve our business goals and that could adversely affect our anticipated results of operations
and financial condition.
Our anticipated production, sale and distribution of biodiesel are dependent on the sufficiency of
necessary infrastructure, which may not be put into place on a timely basis, if at all. In this
case, our anticipated results of operations and financial condition would be adversely affected by
these infrastructure disruptions.
Substantial development of infrastructure will be required by persons and entities outside our
control for our operations, and the biodiesel industry generally, to grow. Areas requiring
expansion include, but are not limited to:
•
adequate rail capacity, including sufficient numbers of dedicated tanker cars;
•
sufficient storage facilities for feedstock and biodiesel;
•
increases in truck fleets capable of transporting biodiesel within localized
markets; and
•
expansion of blending facilities and pipelines to handle biodiesel.
Substantial investments required for these infrastructure changes and expansions may not be made or
may not be made on a timely basis. Any delay or failure in making the changes to or expansion of
infrastructure could hurt the demand and/or prices for our products, impede our delivery of
products, impose additional costs on us or otherwise have a material adverse effect on our
anticipated results of operations or financial condition. Our business is dependent on the
continuing availability of infrastructure, and any infrastructure disruptions could adversely
affect our anticipated results of operations and financial condition.
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We may be unable to locate suitable properties and obtain the development rights needed to build
and expand our business, in which case we will not be able to produce our anticipated results of
operations and financial condition.
Our business plan focuses in part on designing, building and operating biodiesel production plants
for our own account within existing liquids-handling terminals adjacent to river, lake and
seaports. Our ability to secure suitable plant locations could create unanticipated costs and
delays in implementing our business plan. If we are not successful in identifying and obtaining
development rights on suitable properties for building and operating biodiesel production plants,
our future prospects for profitability will likely be substantially limited, and adversely affect
our anticipated results of operations and financial condition.
We may be adversely affected by environmental, health and safety laws, regulations and
requirements, any of which could require us to pay or satisfy costs or incur expenses substantially
in excess of our business plan.
As we pursue our business plan, we will become subject to various federal, state, local and foreign
environmental laws and regulations, including those relating to the discharge of materials into the
air, water and ground, the generation, storage, handling, use, transportation and disposal of
hazardous materials, and the health and safety of our employees. The cost of compliance with
environmental, health and safety laws could be significant. A violation of these laws, regulations
and/or permit conditions can result in substantial fines, natural resource damages, criminal
sanctions, permit revocations and/or facility shutdowns, as well as civil liabilities to affected
property owners. In addition, new laws, new interpretations of existing laws, increased
governmental enforcement of environmental laws or other developments could require us to make
additional significant expenditures.
The hazards and risks associated with producing and transporting biodiesel, in particular due to
the presence of methanol (such as fires, natural disasters, explosions and abnormal pressures and
blowouts) may also result in personal injury claims or damage to property and third parties. As
protection against operating hazards, we intend to maintain insurance coverage against some, but
not all, potential losses. However, we could sustain losses for uninsurable or uninsured risks, or
in amounts in excess of existing insurance coverage. Events that result in significant personal
injury or damage to our property or third parties or other losses that are not fully covered by
insurance could have a material adverse effect on the anticipated results of our contemplated
operations and financial condition.
Our anticipated results of operation and financial condition will suffer if we cannot obtain or
maintain governmental permits or licenses that are necessary for the operation of our biodiesel
production units.
Our biodiesel production facilities operations will require licenses and permits from various
governmental authorities. We believe that we will be able to obtain all necessary licenses and
permits to carry on the activities that we contemplate. However, our ability to obtain, sustain or
renew such licenses and permits will be subject to governmental regulations and policies which are
subject to change. Our inability to obtain or retain any of these licenses or permits may have a
material adverse effect on our anticipated results from operations and financial condition.
Our success will depend in part on our ability to protect our intellectual property.
Our success, competitive position and future revenues will depend in large part on our ability, to
obtain, secure and defend patent protection for our products, methods, processes and other
technologies, to preserve our trade secrets, to prevent third parties from infringing on our
proprietary rights, and to operate without infringing on the proprietary rights of third parties.
Our interest in these rights is complex and uncertain.
We hold five issued patents (plus one pending application for U.S. patents) on our STT® technology
for biodiesel production in the United States and internationally. These issued patents expire
between 2011 and 2023. We will seek to obtain additional patents that we believe may be required
to commercialize our products, technologies and methods. We also have patent applications pending
in several foreign jurisdictions. We anticipate filing additional patent applications both in the
United States and in other countries, as appropriate. However, we cannot predict:
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•
the degree and range of protection any patents will afford us against competitors,
including whether third parties will find ways to invalidate or otherwise circumvent
our patents;
•
if and when patents will issue;
•
if our issued patents will be valid or enforceable;
•
whether or not others will obtain patents claiming aspects similar to those covered
by our patents and patent applications; or
•
whether we will need to initiate litigation or administrative proceedings which may
be costly whether we win or lose.
Even issued patents may later be found unenforceable, or be restricted or invalidated in
proceedings instituted by third parties before various patent offices and courts. Changes in
either the patent laws or in the interpretation of patent laws in the United States and other
countries may diminish the value of our intellectual property. We are therefore unable to predict
the scope of any patent claims in our or in third-party patents that may be issued or may be
enforceable.
To help protect our proprietary know-how and our inventions for which patents may be unobtainable
or difficult to obtain, we rely on trade secret protection and confidentiality agreements with our
employees, consultants and advisors. If any of our trade secrets, know-how or other proprietary
information is disclosed, the value of our trade secrets, know-how and other proprietary rights
would be significantly impaired and our business and competitive position would suffer.
A dispute regarding the infringement or misappropriation of our proprietary rights or the
proprietary rights of others could be costly and result in delays in our commercialization
activities. Our success depends, in part, on our ability to operate without infringing on or
misappropriating the property rights of others.
Any legal action claiming damages or seeking to enjoin commercial activities relating to the
affected products, methods, and processes could require us to obtain a license to continue to use,
manufacture or market the affected products, methods or processes, which may not be available on
commercially reasonable terms, if at all, or could prevent us from making, using or selling the
subject matter claimed in patents held by others and subject us to potential liability damages or
could consume a substantial portion of our managerial and financial resources whether we win or
lose.
Risks Related to our Participation in the Biodiesel Industry
Increases in the construction of biodiesel production plants may cause excess biodiesel production
capacity in the market. Excess capacity may adversely affect the price at which we are able to
sell the biodiesel that we produce and may also adversely affect our anticipated results of
operation and financial condition.
In 2006, only 200 million gallons of biodiesel were produced in the United States. According to
the National Biodiesel Board, as of January 31, 2007, there is a reported 864 MMgpy of biodiesel
production capacity in the United States, with another 1.7 billion gallons per year under
construction (for a total of 2,564 MMgpy) (see
http://www.biodiesel.org/pdf_files/fuelfactsheets/Production_Capacity.pdf).
With such an increase in biodiesel production capacity in the United States, compared to historical
biodiesel production levels, there is risk that there will be a significant amount of excess
biodiesel production capacity, thereby resulting in significant price competition and the closure
of less competitive biodiesel facilities. Although this existing and pending capacity growth is
very large compared to historical biodiesel production levels, we believe that the market will
purchase as much biodiesel as is available, so long as the prices for biodiesel (net of the impact
of tax credits and other similar incentives) are competitive with those of petrodiesel.
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Our anticipated results of operations, financial condition and business outlook will be highly
dependent on commodity prices and the availability of supplies, both of which are subject to
significant volatility and uncertainty.
Our operating results will be substantially dependent on commodity prices, especially prices for
biodiesel and petroleum diesel, as well as feedstock, equipment and materials used in the
construction and operation of our biodiesel production plants. As a result of the volatility of
the prices and the scarcity of these items, our results may fluctuate substantially, and we may
experience periods of declining prices for our products and increasing costs for our raw materials,
which could result in operating losses. Although we may attempt to offset a portion of the effects
of fluctuations in prices by entering into forward contracts to supply biodiesel or purchase
feedstock or other items or by engaging in transactions involving exchange-traded futures
contracts, the amount and duration of these hedging and other risk mitigation activities may vary
substantially over time, and these activities also involve substantial risks.
The price of feedstock is influenced by market demand, weather conditions, animal processing and
rendering plant decisions, factors affecting crop yields, farmer planting decisions and general
economic, market and regulatory factors. The principal feedstocks for biodiesel currently are
soybean oil, palm oil and canola/rapeseed oil and are the feedstocks most susceptible to price risk
due to market demand. Factors affecting crop yield and planting decisions include government
policies and subsidies with respect to agriculture and international trade, and global and local
demand and supply. The significance and relative effect of these factors on the price of feedstock
is difficult to predict.
Any event that tends to negatively affect the supply of feedstock, such as increased demand,
adverse weather or crop disease, could increase feedstock prices and potentially harm our business.
In addition, we may also have difficulty, from time to time, in physically sourcing feedstock on
economical terms due to supply shortages. Such a shortage could require us to suspend operations
until feedstock is available at economical terms, which would have a material adverse effect on our
business, anticipated results of operations and financial condition. The price we pay for
feedstock at a facility could increase if an additional multi-feedstock biodiesel production plant
is built in the same general vicinity or if alternative uses are found for lower cost feedstock.
Biodiesel fuel is a commodity whose price is determined based in part on the price of petroleum
diesel, world demand, supply and other factors, all of which are beyond our control. World prices
for biodiesel fuel have fluctuated widely in recent years. We expect that prices will continue to
fluctuate in the future. Price fluctuations will have a significant impact upon our revenue, the
return on our investment in biodiesel production plants and our general financial condition. Price
fluctuations for biodiesel fuel may also impact the investment market and our ability to obtain
investor capital. Although market prices for biodiesel fuel rose to near-record levels during
2005, there is no assurance that these prices will remain at current levels. Future decreases in
the prices of biodiesel or petroleum diesel fuel may have a material adverse effect on our
financial condition and anticipated results of operations.
We also use other raw materials such as methanol and sodium hydroxide, which are commodities and
subject to price fluctuations and supply uncertainty. If the availability or the cost of these raw
materials changes significantly, our production volume or cost to produce biodiesel could be
affected.
Both supply and demand in the United States biodiesel industry are highly dependent upon federal
and state legislation.
The production of biodiesel is made significantly more competitive by federal and state tax
incentives. The federal excise tax incentive program for biodiesel was originally enacted as part
of the JOBS Act but is scheduled to expire on December 31, 2008. This program provides blenders,
generally distributors, with a one cent tax credit for each percentage point of virgin vegetable
oil-derived biodiesel blended with petroleum diesel. For example, distributors that blend virgin
soybean-derived biodiesel with petroleum diesel into a B20 blend biodiesel would receive a 20 cent
per gallon excise tax credit. The program also provides blenders of recycled oils, such as yellow
grease from restaurants, with a one-half cent tax credit for each percentage point of recycled
oil-derived biodiesel blended with petroleum diesel. For example, distributors that blend recycled
oil-derived biodiesel with petroleum diesel into a B20 blend biodiesel would receive a 10 cent per
gallon excise tax credit. In addition, approximately 31 states
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provide mandates, programs and other incentives to increase biodiesel production and use, such as
mandates for fleet use or for overall use within the state, tax credits, financial grants, tax
deductions, financial assistance, tax exemptions and fuel rebate programs. These incentives are
meant to lower the end-users' cost of biodiesel in comparison to petroleum diesel. Currently, we
plan to sell the biodiesel we produce to blenders that blend their biodiesel blend with petroleum
diesel and therefore we expect to receive a price from our biodiesel purchasers that includes the
$1.00 excise tax credit. The elimination or significant reduction in the federal excise tax
incentive program or state incentive programs benefiting biodiesel could adversely affect our
anticipated results of operations and financial condition.
Reductions in support of biodiesel from government, consumer or special interest groups could
adversely impact our business plan and our anticipated results of operation and financial
condition.
Federal and state governments in the United States and governments abroad have implemented
incentives and mandates in support of biodiesel. Similarly, there has been support from consumers
and special interest groups, such as agricultural and environmental groups. Support has even come
from the petroleum industry itself, such as BP's (formerly known as British Petroleum) "beyond
petroleum" marketing campaign, and the automobile industry, such as General Motors' "live green, go
yellow" flex-fuel ethanol marketing campaign. The loss of these incentives, including the failure
to renew incentives that terminate, could adversely affect our anticipated results of operations
and financial condition.
We may be unable to effectively compete in the biodiesel industry.
In many instances, our competitors and potential competitors have, or will have, substantially
greater financial, technical, research, and other resources and larger, more established marketing,
sales, distribution, and service organizations than we have. Moreover, competitors may have longer
operating histories and greater credit worthiness (i.e., in competing for feedstock) than we have,
and competitors may offer discounts as a competitive tactic. Our competitors may succeed in
developing or marketing technologies or products that are more effective or commercially attractive
than our products, or that would render our technologies and products obsolete. Also, we may not
have the financial resources, technical expertise, or marketing, distribution, or support
capabilities to compete successfully in the future.
We anticipate that competition for the licensing of biodiesel reactors will come primarily from
companies that offer competing novel biodiesel production technologies. To compete effectively in
licensing biodiesel production technology, we will need to demonstrate the advantages of our STT®
Reactor over well-established, traditional chemical reactors, as well as novel technologies and
systems. We will also experience competition from other producers of biodiesel.
Our ability to succeed as a biodiesel production company will depend, to a large extent, on our
ability to compete for, and obtain, feedstock, obtaining suitable properties for constructing
biodiesel production plants and sales of biodiesel and related products. Competition will likely
increase as energy prices on the commodities market, including biodiesel and petrodiesel, rise as
they have in recent years. This increased competition may also have an adverse impact on our
ability to obtain additional capital from investors.
A substantial reduction in crude petroleum oil prices could have an adverse impact on our
contemplated business plan by making biodiesel fuel relatively more expensive compared to
petrodiesel. Were such a reduction to occur, it would likely adversely affect our anticipated
results of operation and financial condition.
With the current elevated prices compared to historical prices of crude petroleum oil, and by
extension, petrodiesel, biodiesel can be produced for a cost that is economically practical when
compared to the cost to produce petrodiesel. However, if the price of crude petroleum oil should
drop substantially, this could have a material adverse effect on the entire biodiesel industry and
us.
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Risks Related to Investment in our Common Stock
The public market for our common stock is volatile.
Our common stock is currently quoted for trading on the OTC Bulletin Board and since the closing of
our private placement offering in January 2007 the trading price has been volatile. An active
public market for the common stock may not be sustained.
The market price of our common stock may fluctuate significantly in response to factors, some of
which are beyond our control, including the following:
•
actual or anticipated variations in operating results;
•
the limited number of holders of the common stock, and the limited liquidity
available through the OTC Bulletin Board;
•
changes in financial estimates by securities analysts;
•
changes in the economic performance and/or market valuations of other energy
companies;
•
the timing and type of financing and related dilution impact on the stockholders;
•
our announcement of significant acquisitions, strategic partnerships, joint ventures
or capital commitments;
•
additions or departures of key personnel;
•
sales or other transactions involving our capital stock;
•
changes in the market for biodiesel fuel commodities or the capital markets
generally, or both;
•
changes in the availability of feedstock on commercially economic terms;
•
changes in the demand for biodiesel fuel, including changes resulting from the
expansion of other alternative fuels;
•
changes in the social, political and/or legal climate;
•
announcements of technological innovations or new products available to the
biodiesel production industry; and/or
•
announcements by relevant domestic and foreign government agencies related to
incentives for alternative energy development programs.
We may not be able to attract the attention of major brokerage firms.
Because we have not yet actively commenced business, or because we became public through a "reverse
merger," security analysts of major brokerage firms may not provide coverage of us. Moreover,
brokerage firms may not desire to provide financial advisory services or to conduct secondary
offerings on our behalf in the future.
Our common stock may be considered "a penny stock" and may be difficult to sell.
The SEC has adopted regulations which generally define "penny stock" to be an equity security that
has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share,
subject to specific exemptions.
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The market price of our common stock is less than $5.00 per share and therefore may be designated
as a "penny stock" according to SEC rules. This designation requires any broker or dealer selling
these securities to disclose certain information concerning the transaction, obtain a written
agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase
the securities. These rules may restrict the ability of brokers or dealers to sell the common
stock and may affect the ability of investors to sell their shares. In addition, since the common
stock is currently traded on the OTC Bulletin Board, investors may find it difficult to obtain
accurate quotations of the common stock and may experience a lack of buyers to purchase such stock
or a lack of market makers to support the stock price.
A significant number of our shares will be eligible for sale, and their sale could depress the
market price of our common stock.
Sales of a significant number of shares of our common stock in the public market could harm the
market price of our common stock. As additional shares of our common stock become available for
resale in the public market pursuant to Rule 144, the supply of common stock will increase, which
could decrease the price of our common stock. Some or all of the shares of common stock not
registered on the Registration Statement on Form SB-2, as amended (the "Registration Statement"),
may be resold from time to time in the open market pursuant to Rule 144. In general, a person who
has held restricted shares for a period of one year may, upon filing with the SEC a notification on
Form 144, sell into the market shares of common stock in an amount equal to the greater of 1% of
the outstanding shares or the average weekly number of shares sold in the last four weeks prior to
such sale. Such sales may be repeated once every three months, and any of the restricted shares
may be sold by a non-affiliate after they have been held for two years. Substantially all of the
former shareholders of Kreido Laboratories have entered into lock-up agreements pursuant to which
they have agreed to not sell the company shares issued to them in the Merger for a period of 12
months following the merger date of January 12, 2007.
Our principal stockholders will have significant voting power and may take actions that may not be
in the best interests of other stockholders.
Our officers, directors, principal stockholders, their affiliates and other related persons control
a significant percentage of the outstanding shares of common stock. If these stockholders act
together, they will be able to exert significant control over our management and affairs requiring
stockholder approval, including approval of significant corporate transactions. This concentration
of ownership may have the effect of delaying or preventing a change in control and might adversely
affect the market price of the common stock. This concentration of ownership may not be in the
best interests of all our stockholders.
Investors should not anticipate receiving cash dividends on our common stock.
We have never declared or paid any cash dividends or distributions on our common stock. We
currently intend to retain future earnings to support operations and to finance expansion and
therefore do not anticipate paying any cash dividends on our common stock in the foreseeable
future.
Wrongful acts of our former counsel may expose the Company to investor claims under the securities
laws and gives rise to Company claims against those associated with the wrongdoing.
On February 28, 2007, we announced that we have conducted an inquiry concerning the improper
transfer of shares of our common stock without a restrictive legend to two brokerage accounts
controlled by Louis Zehil, a former partner of McGuireWoods, the law firm that represented us in a
private offering of company stocks in January 2007. As part of the 18,518,519 unit private
offering, a total of approximately 1.5 million units of common stock and common stock purchase
warrants were sold to the two private financial entities controlled by Mr. Zehil. The SEC has
commenced an enforcement action against Mr. Zehil and U.S. Department of Justice in pursuing
criminal proceedings against Mr. Zehil. We have learned that approximately 81,480 shares of common
stock were sold in the public markets by the two private financial entities at the direction of Mr.
Zehil in January and early February of this year. These sales were done without our consent or
knowledge and in violation of the terms of purchase and purchase covenants, and the representations
and warranties on which we relied in satisfying the requirements of the private placement exemption
of Regulation D under the Securities Act. We do not anticipate reacquiring any of the 81,480
shares. The high and low trading prices of our common stock during the period that the 81,480
shares were
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sold were $2.43 and $1.57, respectively. Based upon this range, were we requested by purchasers to
reacquire such shares, the aggregate maximum cost to us would be less than $200,000. The remaining
1.4 million shares and the warrants to purchase 1,481,480 shares of common stock are under the
control of a court-appointed receiver who has recently filed a report with the court soliciting
persons with claims against the two private financial entities to submit those claims. We are
evaluating our claims against the two private financial entities, Mr. Zehil and his former law firm
and we expect to pursue our claims against the private financial entities, Mr. Zehil and his former
law firm in the near future. There is no assurance that we will be able to recover on our various
claims. Further, we may incur significant costs resulting from our investigation of this matter,
any legal proceedings that we may initiate as a result of our investigation and our cooperation
with government authorities. We may not be adequately indemnified for, or otherwise be able to
recover, such costs.
We may not be able to continue as a going concern.
Our consolidated financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in the normal course of
business. We have a history of operating losses that are likely to continue in the future. We
have included an explanatory paragraph in Note 3 of our Annual Report on Form 10-KSB as amended by
Form 10-KSB/A, to the effect that our significant losses from operations and our dependence on
financing provides substantial doubt about our ability to continue as a going concern. Our
financial statements do not include any adjustments that might be necessary should we be unable to
continue as a going concern.
Our operations must begin to provide sufficient revenues to improve our working capital position.
Additionally, we will require additional capital to construct our planned biodiesel facilities. If
we are unable to obtain additional capital we may not be able to continue as a going concern.
FORWARD LOOKING STATEMENTS
This prospectus contains forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking statements by terminology
such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks, uncertainties and other
factors, including the risks described in this section, that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these statements to actual
results.
Those forward-looking statements also involve certain risks and uncertainties. Factors, risks and
uncertainties that could cause or contribute to such differences include those specific risks and
uncertainties discussed above. The cautionary statements made in this document should be read as
being applicable to all related forward-looking statements wherever they appear in this document.
WHERE YOU CAN FIND MORE INFORMATION
You should only rely on the information incorporated by reference or provided in this prospectus or
any supplement. We have not authorized anyone else to provide you with different information. The
common stock is not being offered in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any supplement is accurate as of any date other
than the date on the front of this prospectus.
We file Form 8-K reports and other information with the SEC as is required by the Exchange Act.
You may read and copy any reports, statements or other information we have filed at the SEC's
Public Reference Room at 100 F
14
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Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Rooms. Our filings are also available on the Internet at the
SEC's website at http:\\www.sec.gov.
USE OF PROCEEDS
The shares being registered by this prospectus are being registered for the account of the selling
stockholders named in this prospectus. As a result, all proceeds from the sales of the common
stock will go to the selling stockholders and we will not receive any proceeds from the resale of
the common stock by the selling stockholders.
DILUTION
Because any selling stockholders who offer and sell shares covered by this prospectus may do so at
various times, at prices and at terms then prevailing or at prices related to the then current
market price, or in negotiated transactions, we have not included in this prospectus information
about the dilution (if any) to the public arising from these sales.
SELLING STOCKHOLDERS
The following table identifies the selling stockholders and indicates (i) the nature of any
material relationship that such selling stockholder has had with us for the past three years, (ii)
the number of shares and shares subject to options held by the selling stockholders, (iii) the
amount to be offered for each of the selling stockholder's account, and (iv) the percentage of
outstanding shares of the common stock in our capital to be owned by each selling stockholder after
the sale of the shares offered by them pursuant to this offering. The selling stockholders are not
obligated to sell the shares offered in this prospectus and may choose not to sell any of the
shares or only a part of the shares that they receive. Securities and Exchange Commission, or the
SEC, rules require that we assume that the selling stockholders sell all of the shares offered with
this prospectus.
Under the Securities Exchange Act of 1934, as amended, or the Exchange Act, any person engaged in a
distribution of the shares offered by this prospectus may not simultaneously engage in market
making activities with respect to our common stock during the applicable "cooling off" periods
prior to the commencement of such distribution. In addition, and without limiting the foregoing,
the selling stockholders will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, which provisions may limit the timing of purchases and sales of the
shares by the selling stockholders.
Percentage of Shares
Number of Shares
Number of Shares
Beneficially Owned
3
Beneficially
Subject to
Shares Being
Before
After
Selling Stockholder
Owned
1
Options
2
Registered
Offering
Offering
G.A. Ben Binninger
4
760,683
5
1,408,848
6
1,508,848
7
1.44
*
John M. Philpott
8
81,250
9
150,000
10
150,000
11
*
*
Philip Lichtenberger
12
861,500
13
850,781
14
1,148,419
15
1.62
%
*
Alan McGrevy
16
726,663
17
850,781
18
1,013,582
19
1.37
%
*
Larry Sullivan
20
65,625
21
175,000
10
175,000
22
*
*
Richard Redoglia
23
2,500
24
25,000
25
25,000
25
*
*
Multi Tolaney
26
2,500
27
25,000
25
25,000
25
*
*
Betsy Wood Knapp
28
4,813,809
29
25,000
25
25,000
25
9.16
9.12
David Nazarian
30
15,326,295
31
25,000
25
25,000
25
29.18
29.13
David Mandel
32
3,738,049
33
25,000
25
25,000
25
7.12
7.07
*
Less than 1%
1
Represents shares owned beneficially by each of the selling stockholders identified
above. This figure includes shares underlying options and warrants held by each of the
selling stockholders that may be exercisable as of, or within 60 days after the date of, this
prospectus, but does not include any shares underlying those options that cannot be exercised
within that period.
2
Includes shares of our common stock underlying options granted to each of the selling
stockholders identified above, whether or not exercisable as of, or within 60 days of, the
date of this prospectus.
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3
Based on 52,522,202 shares outstanding as of January 16, 2008.
4
Mr. Binninger is one of our directors and has been our Chief Executive Officer and
President since July 2007. Mr. Binninger became a director of Kreido Biofuels, Inc. on
January 12, 2007.
5
Number of shares beneficially owned includes (a) 33,848 shares of common stock
underlying options awarded under the 1997 Program, (b) 400,000 shares of common stock
underlying options awarded under the 2006 Plan, (c) 226,835 shares of common stock underlying
warrants, all of which are exercisable within 60 days of January 16, 2008, and (d) 100,000
shares of restricted common stock awarded under the 2006 Plan.
6
Includes (a) 33,848 shares of common stock underlying options awarded under the 1997
Program, all of which are vested, (b) 125,000 shares of common stock underlying options
awarded under the 2006 Plan of which 50,000 shares were vested July 27, 2007, the date of
grant, 50,000 shares vest on in four monthly installments at the end of each month beginning
in August 2007, provided Mr. Binninger is then serving as our Chief Executive Officer as of
such month-end, and 12,500 shares vest on each of April 15, 2008 and October 15, 2008 provided
that Mr. Binninger is then serving either as an officer or a director of our company and (c)
1,250,000 shares of common stock underlying options awarded under the 2006 Plan of which
100,000 shares were vested December 10, 2007, the date of grant, 100,000 shares vest on in
eleven monthly installments at the end of each month beginning in January 2008 and the final
50,000 shares vest on December 10, 2008.
7
Includes (a) 33,848 shares of common stock underlying options awarded under the 1997
Program, (b) 125,000 shares of common stock underlying options awarded under the 2006 Plan on
July 27, 2007, (c) 1,250,000 shares of common stock underlying options awarded under the 2006
Plan on December 10, 2007 and (d) 100,000 shares of restricted common stock awarded under the 2006 Plan.
8
Mr. Philpott has been our Chief Financial Officer since July 2007. Mr. Philpott
initially joined us on March 19, 2007 as Vice President and Chief Accounting Officer.
9
Number of shares beneficially owned includes 56,250 options to purchase common stock
of which are exercisable within 60 days as of January 16, 2008 and 25,000 shares of common stock.
10
All of the options held were awarded under the 2006 Plan and vest in eight quarterly
installments commencing on June 30, 2007.
11
Consists of 150,000 shares of common stock underlying options awarded under the 2006
Plan.
12
Mr. Lichtenberger has been our Chief Operating Officer since July 2007. He has
served as Executive Vice President and Chief Operating Officer of Kreido Labs since 1997 and
was appointed as Senior Vice President of Operations and Chief Financial Officer of our
company on January 12, 2007.
13
Number of shares beneficially owned includes (a) 296,002 shares of restricted stock,
(b) 255,737 shares of common stock underlying options awarded under the 1997 Program, (c)
308,125 shares of common stock underlying options awarded under the 2006 Plan and (d) 1,636
shares of common stock underlying warrants, all of which are exercisable within 60 days of
January 16, 2008.
14
Includes (a) 270,781 shares of common stock underlying options awarded under the 1997
Program, of which 1/36 vest each month over a three year period commencing on April 17, 2005
and (b) 580,000 shares of common stock underlying options awarded under the 2006 Plan of which
145,000 were vested on the date of grant, April 4, 2007, with the remainder vesting in eight
quarterly installments commencing on June 30, 2007.
15
Includes (a) 296,002 shares of restricted stock, (b) 270,781 shares of common stock
underlying options awarded under the 1997 Program, (c) 580,000 shares of common stock
underlying options awarded under the 2006 Plan, and (d) 1,636 shares of common stock
underlying warrants.
16
Mr. McGrevy has served as Vice President of Engineering for Kreido Labs since 2000
and joined Kreido Biofuels, Inc. in the same capacity on January 12, 2007
17
Number of shares beneficially owned includes (a) 162,801 shares of restricted stock,
(b) 255,737 shares of common stock underlying options awarded under the 1997 Program, and (c)
308,125 shares of common stock underlying options awarded under the 2006 Plan, all of which
are exercisable within 60 days of January 16, 2008.
18
Includes (a) 270,781 shares of common stock underlying options awarded under the 1997
Program, of which 1/36 vest each month over a three year period commencing on April 17, 2005
and (b) 580,000 shares of common stock underlying options awarded under the 2006 Plan of which
145,000 were vested on the date of grant, April 10, 2007, with the remainder vesting in eight
quarterly installments commencing on June 30, 2007.
19
Includes (a) 162,801 shares of restricted stock, (b) 270,781 shares of common stock
underlying options awarded under the 1997 Program and (c) 580,000 shares of common stock
underlying options awarded under the 2006 Plan.
20
Mr. Sullivan has been our Chief Technology Officer since April 2007.
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21
Number of shares beneficially owned includes 65,625 options to purchase common stock
which are exercisable within 60 days as of January 16, 2008.
22
Consists of 175,000 shares of common stock underlying options awarded under the 2006
Plan.
23
Mr. Redoglia has been one of our directors since July 27, 2007.
24
Includes shares issued to Mr. Redoglia upon his election as a director as provided in
our Outside Director Compensation Program.
25
Includes shares of common stock underlying options awarded under the 2006 Plan as
provided for in our Outside Director Compensation Program, which options vest one-half (50%)
upon the six month anniversary of the date of grant and one-half (50%) upon the one year
anniversary of the date of grant, provided the option-holder is then serving as a director of
our Company.
26
Mr. Tolaney has been one of our directors since July 27, 2007.
27
Includes shares issued to Mr. Tolaney upon his election as a director as provided in
our Outside Director Compensation Program.
28
Ms. Knapp has been one of our directors and chair of our board of directors since
January 12, 2007.
29
Includes (a) 4,592,331 shares of common stock and (b) warrants to purchase 218,978
shares of common stock beneficially owned by Ms. Knapp and held of record by Knapp Trust u/t/a
7/1/2004, of which Cleon T. Knapp and Betsy Wood Knapp are the trustees, and (c) 2,500 shares
issued to Ms. Knapp on July 27, 2007 as a director as provided in our Outside Director
Compensation Program .
30
Mr. Nazarian has been one of our directors since October 31, 2007.
31
Includes (a) 12,795,377 shares of common stock, and (b) warrants to purchase
2,528,418 shares of common stock beneficially owned by Smart Technology Ventures, through its
affiliated venture funds, and certain Nazarian family trusts, and (c) 2,500 shares issued to
Mr. Nazarian upon his election as a director as provided in our Outside Director Compensation
Program. Mr. Nazarian serves as general partner of a number of venture funds affiliated with
Smart Technology Ventures.
32
Mr. Mandel has been one of our directors since October 31, 2007.
33
Includes (a) 3,515,457 shares of common stock, and (b) warrants to purchase 220,092
shares of common stock beneficially owned by Mr. Mandel and his family, and (c) 2,500 shares
issued to Mr. Mandel upon his election as a director as provided in our Outside Director
Compensation Program.
The information provided in the table above with respect to the selling stockholders has been
obtained from each of the selling stockholders. Because the selling stockholders may sell all or
some portion of the shares of common stock beneficially owned by them, only an estimate (assuming
the selling stockholders sell all of the shares offered hereby) can be given as to the number of
shares of common stock that will be beneficially owned by each selling stockholder after this
offering. In addition, the selling stockholders may have sold, transferred or otherwise disposed
of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date
on which he provided the information regarding the shares of common stock beneficially owned by
them, all or a portion of the shares of common stock beneficially owned by them in transactions
exempt from the registration requirements of the Securities Act.
PLAN OF DISTRIBUTION
The shares covered by this prospectus may be offered and sold from time to time by the selling
stockholders. We will not receive any of the proceeds from this offering. The term "selling
stockholders" includes the selling stockholders named in the table above and any donees, pledgees,
transferees or other successors-in-interest selling shares received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership distribution or other non-sale
related transfer. The selling stockholders may sell the shares from time to time and may also
decide not to sell all the shares they are allowed to sell under this prospectus. The selling
stockholders will act independently of us in making decisions with respect to the timing, manner
and size of each sale. Such sales may be made on one or more exchanges or in the over-the-counter
market or otherwise, at fixed prices and under terms then prevailing or at prices related to the
then current market price or determined in negotiated transactions. Our common stock is quoted on
the OTC Bulletin Board. The selling stockholders may sell their shares by one or more of, or a
combination of, the following methods:
•
purchases by a broker-dealer as principal and resale by such broker-dealer for its
own account pursuant to this prospectus;
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•
ordinary brokerage transactions and transactions in which the broker solicits
purchasers;
•
block trades in which the broker-dealer so engaged will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to facilitate
the transaction;
•
an exchange distribution in accordance with the rules of the applicable exchange;
•
in privately negotiated transactions; and
•
in option transactions.
In addition, any shares that qualify for sale pursuant to Rule 144 may be sold under Rule 144
rather than pursuant to this prospectus. There is no assurance that the selling stockholders will
sell all or a portion of the shares being offered hereby.
To the extent required, this prospectus may be amended or supplemented from time to time to
describe a specific plan of distribution. In connection with distributions of the shares or
otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of the common stock in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may also sell the common
stock short and redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial institution of
shares offered by this prospectus, which shares such broker-dealer or other financial institution
may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The selling stockholders may also pledge shares to a broker-dealer or other financial institution,
and, upon a default, such broker-dealer or other financial institution, may effect sales of the
pledged shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
In effecting sales, broker-dealers or agents engaged by the selling stockholders may arrange for
other broker-dealers to participate. Broker-dealers or agents may receive commissions, discounts
or concessions from the selling stockholders in amounts to be negotiated immediately prior to the
sale. In offering the shares covered by this prospectus, the selling stockholders and any
broker-dealers who execute sales for the selling stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales. Any profits realized by
the selling stockholders and the compensation of any broker-dealer may be deemed to be underwriting
discounts and commissions. Selling stockholders who are deemed to be "underwriters" within the
meaning of the Securities Act will be subject to the prospectus delivery requirements of the
Securities Act and may be subject to statutory liabilities, including but not limited to,
liabilities under Sections 11, 12 and 17 of the Securities Act.
The selling stockholders and any other persons participating in such distributions may also be
subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation, Regulation M. Regulation M may limit the timing of purchases and
sales of shares by the selling stockholders and any other persons and may restrict, for a period of
up to five business days prior to the commencement of the distribution, the ability of any person
engaged in a distribution of shares of our common stock to engage in market-making activities with
respect to these shares. The selling stockholders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules thereunder relating to
stock manipulation, particularly Regulation M. We will make copies of this prospectus available to
the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the
Securities Act.
To comply with the securities laws of certain states, if applicable, the shares must be sold in
such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain
states the shares may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification requirement is available
and is complied with.
To our knowledge, there are currently no plans, arrangements or understandings between any selling
stockholder and any underwriter, broker-dealer or agent regarding the sale of the common stock by
the selling stockholders.
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At the time a particular offer of shares is made, if required, a prospectus supplement or, if
appropriate, a post-effective amendment to the registration statement of which this prospectus is a
part, will be distributed that will set forth the number of shares being offered and the terms of
the offering, including the name of any underwriter, dealer or agent, the name of any selling
stockholder, the purchase price paid by any underwriter, any discount, commission and other item
constituting compensation, any discount, commission or concession allowed or reallowed or paid to
any dealer, and the proposed selling price to the public.
We will bear all costs, expenses and fees in connection with the registration of the shares of
common stock covered by this prospectus, including, without limitation, all registration and filing
fees and fees and expenses of our counsel and our accountants. The selling stockholders will pay
any underwriting discounts and commissions and expenses incurred by the selling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred by the selling
stockholders in disposing of the shares of common stock. The selling stockholders may indemnify
any broker-dealer that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
EXPERTS
Our financial statements as of December 31, 2006 and the period from inception (January 13, 1995)
through December 31, 2006 incorporated by reference from our Form 10-KSB/A filed with the SEC on
June 27, 2007 have been audited by Vasquez & Company LLP, independent accountants, as set forth in
its report accompanying the financial statements and are included herein in reliance upon the
report.
LEGAL MATTERS
The validity of the shares being offered by this prospectus will be passed upon for us by DLA Piper
US, LLP.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus the information we file with
the SEC, which means that we can disclose important information to you by referring you to those
documents. The information incorporated by reference is an important part of this prospectus, and
the information that we file later with the SEC will automatically update and supersede the
information contained in this prospectus. We incorporate by reference the following documents we
filed with the SEC pursuant to Section 13 of the Exchange Act:
•
Our Annual Report on Form 10-KSB, filed on April 4, 2007 as amended by Form
10-KSB/A, filed on June 27, 2007;
•
Our Quarterly Reports on Form 10-QSB filed on May 17, 2007, August 14, 2007 and
November 14, 2007;
•
Our Quarterly Reports on Form 10-QSB/A filed on June 27, 2007;
•
Current Reports on Form 8-K filed with the SEC on April 10, 2007, April 16, 2007,
May 2, 2007, June 6, 2007, June 14, 2007, June 25, 2007, June 27, 2007, June 28, 2007,
July 30, 2007, September 12, 2007, November 5, 2007 and December 13, 2007; and
•
Current Report on Form 8-K/A filed with the SEC on June 15, 2007.
Also incorporated by reference into this prospectus are all documents that we may file with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and
prior to the sale of all the shares covered by this prospectus. These documents include periodic
reports, such as annual reports on Form 10-KSB, quarterly reports on Form 10-QSB and current
reports on Form 8-K, as well as proxy statements. Unless expressly incorporated into this
registration statement, a report furnished to the SEC on Form 8-K under the Exchange Act shall not
be incorporated by reference into this registration statement. Any statement contained herein or
in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be
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modified or superseded for purposes of this prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this prospectus, except as so modified or
superseded.
If you are a stockholder, we may have sent you some of the documents incorporated by reference, but
you can obtain any of them through us or the SEC. Documents are available from us without charge,
excluding all exhibits not specifically incorporated by reference into this prospectus. You may
request a copy of these documents by writing or telephoning us at the following address:
Investor Relations
Kreido Biofuels, Inc.
1070 Flynn Road
Camarillo, California 93012
(805) 389-3499
You should rely only on the information incorporated by reference or provided in this prospectus
and any supplement. We have not authorized anyone else to provide you with different information.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The SEC allows us to "incorporate by reference" information into this registration statement, which
means that we can disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is deemed to be part of this
registration statement, except for any information superseded by information in this registration
statement.
The following documents filed by our company with the SEC are incorporated herein by reference:
•
Our Annual Report on Form 10-KSB, filed on April 4, 2007 as amended by Form
10-KSB/A, filed on June 27, 2007;
•
Our Quarterly Reports on Form 10-QSB filed on May 17, 2007, August 14, 2007 and
November 14, 2007;
•
Our Quarterly Reports on Form 10-QSB/A filed on June 27, 2007;
•
Current Reports on Form 8-K filed with the SEC on April 10, 2007, April 16, 2007,
May 2, 2007, June 6, 2007, June 14, 2007, June 25, 2007, June 27, 2007, June 28, 2007,
July 30, 2007, September 12, 2007, November 5, 2007 and December 13, 2007; and
•
Current Report on Form 8-K/A filed with the SEC on June 15, 2007.
All reports (other than portions of Current Reports on Form 8-K furnished pursuant to Item 2.02 or
Item 7.01 of Form 8-K, unless otherwise indicated therein) filed pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this registration statement and prior to the
filing of a post-effective amendment which indicates that all securities offered hereby have been
sold or which de-registers all securities then remaining unsold shall be deemed to be incorporated
by reference into this registration statement and to be a part hereof from the date of filing such
documents. Any statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained in any subsequently filed document which also is
deemed to be incorporated by reference herein modifies or supersedes such statement.
You may read and copy any reports, statements or other information we have filed at the SEC's
Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the Public Reference Rooms. Our filings are also
available on the Internet at the SEC's website at http://www.sec.gov.
Item 4. Description of Securities.
We are
registering an aggregate of 5,475,423 shares of common stock issuable pursuant to the Plans.
We are authorized to issue 300,000,000 shares of common stock, 52,522,202 of which were issued
and outstanding as of January 16, 2008. Holders of our common stock are entitled to one vote for
each share on all matters submitted to a stockholder vote and vote together in one class, except as
required by applicable law. Holders of our common stock do not have cumulative voting rights.
Therefore, holders of a majority of the shares of common stock voting for the election of directors
can elect all of the directors. Holders of shares of our common stock representing a majority of
the voting power of the capital stock issued, outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of stockholders. A vote by
the holders of a majority of the outstanding shares of the common stock is required to effectuate
certain fundamental corporate changes such as liquidation, merger or an amendment to the articles
of incorporation.
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Holders of the common stock are entitled to share equally on a pro rata basis in all dividends that
our board of directors, in its discretion, declares from legally available funds. In the event of
liquidation, dissolution or winding up, each outstanding share of common stock will entitle its
holder to participate pro rata in all assets that remain after payment of liabilities. Holders of
the common stock have no preemptive rights and no conversion rights, and there are no redemption
provisions applicable to the common stock.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 78.7502 of Nevada Revised Statutes provides as follows with respect to indemnification of
directors and officers:
NRS 78.7502 Discretionary and mandatory indemnification of officers, directors, employees and
agents: General provisions.
A corporation may indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right of the corporation, by reason
of the fact that he is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and that, with respect to any
criminal action or proceeding, he had reasonable cause to believe that his conduct was unlawful.
A corporation may indemnify any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses, including amounts paid in settlement and attorneys' fees
actually and reasonably incurred by him in connection with the defense or settlement of the action
or suit if he acted in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be made for any claim,
issue or matter as to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon application that in view
of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for
such expenses as the court deems proper.
To the extent that a director, officer, employee or agent of a corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to in subsections 1
and 2, or in defense of any claim, issue or matter therein, the corporation shall indemnify him
against expenses, including attorneys' fees, actually and reasonably incurred by him in connection
with the defense.
When indemnification is discretionary, Section 78.751 of Nevada Revised Statutes provides as
follows with respect to the authorization required to carry out the indemnification:
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NRS 78.751 Authorization required for discretionary indemnification; advancement of expenses;
limitation on indemnification and advancement of expenses.
Any discretionary indemnification under
NRS 78.7502
unless ordered by a court or advanced
pursuant to subsection 2, may be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or agent is proper in
the circumstances. The determination must be made:
(a)
By the stockholders;
(b)
By the board of directors by majority vote of a quorum consisting of directors
who were not parties to the action, suit or proceeding;
(c)
If a majority vote of a quorum consisting of directors who were not parties to
the action, suit or proceeding so orders, by independent legal counsel in a written
opinion; or
(d)
If a quorum consisting of directors who were not parties to the action, suit or
proceeding cannot be obtained, by independent legal counsel in a written opinion.
The articles of incorporation, the bylaws or an agreement made by the corporation may provide that
the expenses of officers and directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the corporation as they are incurred and in advance of the final
disposition of the action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the corporation. The provisions of this
subsection do not affect any rights to advancement of expenses to which corporate personnel other
than directors or officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or ordered by a court pursuant to
this section:
(a)
Does not exclude any other rights to which a person seeking indemnification or
advancement of expenses may be entitled under the articles of incorporation or any
bylaw, agreement, vote of stockholders or disinterested directors or otherwise, for
either an action in his official capacity or an action in another capacity while
holding his office, except that indemnification, unless ordered by a court pursuant to
NRS 78.7502 or for the advancement of expenses made pursuant to subsection 2, may not
be made to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
(b)
Continues for a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and administrators of such a
person.
Article Eleven of our Bylaws provide that we must indemnify any director, officer, employee or
agent of our company who becomes a party to an action against expenses including attorney fees,
judgments, fines and amounts paid in settlement if that person acted in good faith and reasoned his
conduct or action to be in the best interest of our company.
As permitted under Sections 78.7502, 78.751 and 78.752 of the Nevada Revised Statutes, and our
Bylaws, our company has entered into separate Indemnity Agreements with each of its officers and
directors. Under each Indemnity Agreement, the Company undertakes to obtain and maintain in effect
directors' and officers' liability insurance under such insurance is not reasonably available or
cost prohibitive in comparison to the coverage provided. In addition, each agreement provides for
mandatory indemnity coverage for certain third party actions, derivative actions and defense costs
in excess of amounts covered by insurance as valid indemnity clause, bylaw or agreement.
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Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
Exhibit No.
Description
Reference
4.1
Kreido Laboratories 1997 Stock
Compensation Program
4.2
2006 Equity Incentive Plan.
Incorporated by
reference to
Exhibit 10.7 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on January 16, 2007
(File No.
333-130606).
5.1
Opinion of DLA Piper US, LLP
10.1
Warrant for Philip Lichtenberger
23.1
Consent of DLA Piper US, LLP
(included in Exhibit 5.1)
23.2
Consent of Independent Registered
Public Accounting Firm
24.1
Power of Attorney (included in
signature page)
99.1
Outside Director Compensation Program
Incorporated by
reference to
Exhibit 10.3 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on July 30, 2007
(File No.
333-130606).
99.2
Form of Incentive Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
Incorporated by
reference to
Exhibit 10.9 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on January 16, 2007
(File No.
333-130606).
99.3
Form of Non-Qualified Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
Incorporated by
reference to
Exhibit 10.10 to
the Current Report
on Form 8-K filed
with the Securities
and Exchange
Commission on
January 16, 2007
(File No.
333-130606).
Item 9. Undertakings.
(a)
We hereby undertake:
(1)
To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i)
to include any prospectus required by Section 10(a)(3) of the
Securities Act, as amended;
(ii)
to reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment hereof) which,
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individually or in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
(iii)
to include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
PROVIDED, HOWEVER, that undertakings set forth in paragraphs (i) and (ii) above do not apply
if the information required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by us pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in this registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
(b)
We hereby undertake that, for purposes of determining any liability under the
Securities Act, each filing of our annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered herein, and
the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(c)
Insofar as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and persons controlling our company pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC
such indemnification is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by our company of expenses incurred or paid by a
director, officer or controlling person of our company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, our company will, unless in the opinion of
our counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Camarillo, State of California, on January 23, 2008.
KREIDO BIOFUELS, INC.
By:
/s/ John M. Philpott
John M. Philpott, Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints G.A. Ben Binninger and John M. Philpott as his true and lawful attorney-in-fact and agent,
with full power of substitution and re-substitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective amendments) to
this registration statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the SEC, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or any of them, or of
their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by
the following persons in the capacities and on the dates stated.
Signature
Title
Date
/s/ G.A. Ben Binninger
G.A. Ben Binninger
Chief Executive Officer, Director
(Principal Executive Officer)
January 23, 2008
/s/ John M. Philpott
John M. Philpott
Chief Financial Officer
(Principal Accounting Officer)
January 23, 2008
/s/ Betsy Wood Knapp
Betsy Wood Knapp
Director
January 23, 2008
/s/ David Mandel
David Mandel
Director
January 23, 2008
/s/ David Nazarian
David Nazarian
Director
January 23, 2008
/s/ Richard Redoglia
Richard Redoglia
Director
January 23, 2008
/s/ Murli Tolaney
Murli Tolaney
Director
January 23, 2008
Table of Contents
EXHIBIT INDEX
Exhibit No.
Description
Reference
4.1
Kreido Laboratories 1997 Stock
Compensation Program
4.2
2006 Equity Incentive Plan.
Incorporated by
reference to
Exhibit 10.7 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on January 16, 2007
(File No.
333-130606).
5.1
Opinion of DLA Piper US, LLP
10.1
Warrant for Philip Lichtenberger
23.1
Consent of DLA Piper US, LLP
(included in Exhibit 5.1)
23.2
Consent of Independent Registered
Public Accounting Firm
24.1
Power of Attorney (included in
signature page)
99.1
Outside Director Compensation Program
Incorporated by
reference to
Exhibit 10.3 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on July 30, 2007
(File No.
333-130606).
99.2
Form of Incentive Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
Incorporated by
reference to
Exhibit 10.9 to the
Current Report on
Form 8-K filed with
the Securities and
Exchange Commission
on January 16, 2007
(File No.
333-130606).
99.3
Form of Non-Qualified Stock Option
Agreement by and between Kreido
Biofuels, Inc. and participants
under the 2006 Equity Incentive
Plan.
Incorporated by
reference to
Exhibit 10.10 to
the Current Report
on Form 8-K filed
with the Securities
and Exchange
Commission on
January 16, 2007
(File No.
333-130606).