What changed in this filing

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Item 2. Management’s Discussion and Analysis

2008-11-14 compared with 2008-08-15 · 155 added, 161 removed, 390 unchanged (45% of the section changed)

10 unchanged sentences

Our MD&A is presented in the following

Strategy, Core Philosophies, and Current Operations

Strategy, Core Philosophies, and Current

of Operations

1 unchanged sentence

Off-Balance-Sheet

and Quantitative Disclosures About Market Risk

and Quantitative Disclosures About Market

following discussion and other sections of this Form 10-Q contain

21 unchanged sentences

FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS.

end of the quarter, June 30, 2008, Renewal Fuels, Inc.

(“Renewal”) had three

wholly-owned subsidiaries - Renewal Biodiesel, Inc.

end of the quarter, September 30, 2008, Renewal Fuels, Inc.

(“Renewal”) had

three wholly-owned subsidiaries - Renewal Biodiesel, Inc.

(“Renewal Biodiesel”),

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in Sparks, Nevada.

development stage company established to manufacture a factory-built biodiesel

processing plant that is designed to produce 350,000 gallons of biodiesel per

year, appropriately scaled for a variety of customers, including small

communities, farms, farm co-ops and trucking fleets.

The design was to provide a

biodiesel production system that is continuous, flexible, efficient, affordable,

and fully-automated.

The automated control system will minimize labor costs and

facilitates remote diagnostics.

BSI’s manufacturing facilities were located in

Sparks, Nevada, adjacent to the manufacturing facilities for Renewal

As of April 15, 2008 BSI ceased development operations due

to rising input costs and the development of more efficient means of converting

vegetable oil into biodiesel fuel.

Employment agreements for BSI

employees have been terminated as of April 15, 2008.

The Company sold

productive and shop equipment previously used in BSI operations on July 9,

The Company wrote off $396,806 of intangibles, goodwill, and

remainder of the fixed assets.

established to manufacture a factory-built biodiesel processing plant that is

designed to produce 350,000 gallons of biodiesel per year, appropriately scaled

for a variety of customers, including small communities, farms, farm co-ops and

trucking fleets.

The design was to provide a biodiesel production system that is

continuous, flexible, efficient, affordable, and fully-automated.

The automated

control system would minimize labor costs and facilitate remote diagnostics.

BSI’s manufacturing facilities were located in Sparks, Nevada, adjacent to the

manufacturing facilities for Renewal Biodiesel.

As of April 15, 2008

BSI ceased development operations due to rising input costs and the development

of more efficient means of converting vegetable oil into biodiesel fuel.

Employment agreements for BSI employees have been terminated as of April 15,

The Company sold productive and shop equipment previously used

in BSI operations on July 9, 2008.

The Company wrote off $373,868 of

intangibles, goodwill, and remainder of the fixed assets.

engaged in the growth of cellulosic feedstock for the biofuels

Through a service agreement with another party, we are

Through a service agreement with a third party, we are

establishing nurseries for the growth of unique high density, short-rotation

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wasn’t proper for the sustained growth of the root sections.

Energy, LLC has already replanted a number of root sections.

root sections appear to be growing normally.

RPI and Emerald Energy,

LLC are in ongoing discussions about how to modify their relationship given

these developments.

engaged an independent grower to grow the replaced root

These root sections appear to be growing

RPI and Emerald Energy, LLC are in ongoing discussions

about how to modify their relationship given these developments.

Reorganization

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of Renewal Biodiesel:

Shares Received

Group LLC (1)

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freight expenses.

This design was accomplished during an extensive upgrade to

the product’s specifications in 2006.

Any machines operating on diesel fuel,

including cars, trucks, generators, tractors, furnaces, etc.

may be powered with

the biodiesel produced with the FuelMeister II biodiesel production

Any machines operating on diesel fuel, including

cars, trucks, generators, tractors, furnaces, etc.

may be powered with the

biodiesel produced with the FuelMeister II biodiesel production

engaged in the growth of cellulosic feedstock for the biofuels

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$50,000 in 2008.

Due to growing circumstances, the root sections did

RPI is currently in the process of recuperating the

$50,000 invested in the root sections.

In April and May of 2008, the root sections did not

survive due to growing circumstances.

In August 2008, RPI has

replenished and replanted a number of root sections and has engaged an

independent grower to supervise the conditions and growth of the roots.

Emerald Energy are in discussions to modify its Management Services Agreement

the revenue generating activities of the FuelMeister Business, the Predecessor

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discussion that follows of Results of Operations is in the following

of operations for the three months ended June 30, 2008 and 2007(

of operations for the six months ended June 30, 2008 and the period March

9, 2007 (date of inception) through June 30,

OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND 2007

compensation and benefits

transaction expense

and equipment

general and administrative expenses

of intangible assets

Operating Expenses

Income (Loss)

income (expenses)

Income (Loss)

three months ended June 30, 2008, revenues were $879,973, when compared with the

three months ended June 30, 2007 of $244,087 increase is due to increased sales

of the Fuelmeister product.

of operations for the three months ended September 30, 2008 and 2007(

of operations for the nine months ended September 30, 2008 and the period

March 9, 2007 (date of inception) through September 30, 2007 (

OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND

three months ended September 30, 2008, revenues were $631,694, an increase when

compared with the three months ended September 30, 2007 of $148,800 is due to

sales of the Fuelmeister product while fuel prices were high.

though sales have increased, quarter by quarter, the sales are slowly decreasing

due to fuel prices decreasing, hence the demand for the Fuelmeister product has

of Sales and Gross Profit

sales for the three months ended June 30, 2008 was $575,847, resulting in a

gross profit of $304,126 for the three months ended June 30, 2008 when compared

to three months ended June 30, 2007 of $142,342 and a gross profit of $101,745

increase is due to an increase in sales of the Fuelmeister

sales for the three months ended September 30, 2008 was $437,523, resulting in a

gross profit of $194,171 for the three months ended September 30, 2008 an

increase when compared to three months ended September 30, 2007 of $109,048 and

a gross profit of $39,752 due to an increase in sales of the Fuelmeister

Compensation and Benefits

compensation and benefits were $90,044 for the three months ended June 30, 2008

when compared to three months ended June 30, 2007 of $32,696 increase due to the

addition of several employees and officers.

Transaction Expense

transaction expense was $5,131,231 for the three months ended June 30, 2007,

associated with the acquisition of Fuelmeister.

compensation and benefits were $82,325 for the three months ended September 30,

2008 a decrease when compared to three months ended September 30, 2007 of

$243,101 due to the termination of BSI employees on April 14, 2008.

and Equipment

and equipment expenses, consisting of rent, depreciation, and other

miscellaneous expenses, amounted to $33,020 for the three months ended June 30,

2008 compared with the three months ended June 30, 2007 of $8,257 increase is

due to additional cost of production for the

FuelMeister product.

expenses were $22,251 for the three months ended June 30, 2008 when compared

with the three months ended June 30, 2007 of $43,815 decrease due to less

advertising and website costs.

miscellaneous expenses, amounted to $105,896 for the three months ended

September 30, 2008 an increase when compared with the three months ended

September 30, 2007 of $71,045 due to balance owed on the building lease for

expenses were $21,442 for the three months ended September 30, 2008 decreased

when compared with the three months ended September 30, 2007 of $96,187 due to

less advertising and website costs because of discontinued operations at

fees, consisting primarily of accounting, attorney and accountant fees, were

$143,388 for the three months ended June 30, 2008 compared with the three months

ended June 30, 2007 of $317,898 decreased is due to acquisition and merger costs

$56,723 for the three months ended September 30, 2008 decreased when compared

with the three months ended September 30, 2007 of $80,150 is due to the costs

associated with the acquisitions and mergers in 2007.

and development

transaction expense was $5,131,231 for the three months ended September 30,

2007, associated with the acquisition of Fuelmeister.

and Administrative Expenses

1 unchanged sentence

and other non-manufacturing related expenses were $63,391 for the three months

ended June 30, 2008 compared with the three months ended June 30, 2007 of

$100,666, increase is due to additional costs associated with the

ended September 30, 2008 decreased when compared with the three months ended

September 30, 2007 of $217,665 due to BSI no longer operating.

of Intangible Assets

of intangible assets was $87,594 for the three months ended June 30, 2008,

of intangible assets was $67,617 for the three months ended September 30, 2008,

increased when compared to the three months ended September 30, 2007 of $45,268

primarily due to the amortization of assets acquired in the acquisition of

Other (Income)

(income) expense, was $775,776 for the three months ended June 30, 2008

consisted of interest expense of $349,134 other expenses of $29,836, and

discounted operation of $396,806, when compared with the three months ended June

30, 2007 of $433,377, increase is due to additional interest and debt discount

associated with our convertible debenture obligations, along with discounted

operations of BSI.

Fuelmeister and BSI.

expense, of $433,036 for the three months ended September 30, 2008increased when

compared with the three months ended September 30, 2007 of $221,050 due to the

interest and debt discount associated with all convertible debenture

operations for the three months ended September 30, 2008 of $22,939 compared to

the three months ended September 30, 2007 of $0 is due to discontinued

operations of BSI in 2008.

result of the above, we reported a net loss of $613,320 for the three months

ended June 30, 2008 and a net loss of $5,966,195 for the three months ended June

OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2008 and MARCH 9, 2007 (DATE OF

INCEPTION) TO JUNE 30, 2007.

compensation and benefits

transaction expense

and equipment

general and administrative expenses

of intangible assets

Operating Expenses

Income (Loss)

income (expenses)

Income (Loss)

six months ended June 30, 2008, revenues were $1,225,835 when compared with

period of March 9, 2007 (Date of Inception) to June 30, 2007 of

$244,087 increase is due increased to sales of the Fuelmeister

ended September 30, 2008 and a net loss of $4,153,722 for the three months ended

September 30, 2007.

OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 and MARCH 9, 2007

(DATE OF INCEPTION) TO SEPTEMBER 30, 2007.

nine months ended September 30, 2008, revenues were $1,857,529 increased when

compared with period of March 9, 2007 (Date of Inception) to September 30, 2007

of $392,887 due to sales of the Fuelmeister product which are higher due to

higher gas prices.

Even though sales have increased, year by year,

the sales have slowly decreased due to fuel prices dropping and the demand for

the Fuelmeister product has decreased.

of Sales and Gross Profit

sales for the six months ended June 30, 2008 was $797,544 resulting in a gross

profit of $428,291 for the six months ended June 30, 2008 compared to $142,342

and a gross profit of $101,745 for March 9, 2007 (Date of Inception) to

June 30, 2007 due to increased sales and production of the Fuelmeister

sales for the nine months ended September 30, 2008 was $1,235,067 resulting in a

gross profit of $622,462 for the nine months ended September 30, 2008 increased

when compared to $251,390 and a gross profit of $141,497 for March 9, 2007

(Date of Inception) to September 30, 2007 due successful sales and production of

the Fuelmeister product.

Compensation and Benefits

compensation and benefits were $353,101 for the six months ended June 30, 2008

when compared to March 9, 2007 (Date of Inception) to June 30, 2007

of $34,272 increased due to the acquisition of RBI.

compensation and benefits were $435,426 for the nine months ended September 30,

2008 increased when compared to March 9, 2007 (Date of Inception) to September

30, 2007 of $277,373 due to overtime associated with the sales of the

Fuelmeister product.

Transaction Expense

transaction expense was $5,131,231 for March 9, 2007 (Date of Inception) to June

30, 2007 due to the acquisition of the Fuelmeister product.

transaction expense was $0 for the nine months ended September 30, 2008 compared

to $5,131,231 for March 9, 2007 (Date of Inception) to September 30, 2007 due to

the acquisition of the Fuelmeister product.

and Equipment

and equipment expenses, consisting of rent, depreciation, and other

miscellaneous expenses, amounted to $76,004 for the six months ended June 30,

2008 when compared with March 9, 2007 (Date of Inception) to June 30, 2007 of

8,257 increased due to facility production for the FuelMeister

expenses were $51,774 for the six months ended June 30, 2008 when compared with

March 9, 2007 (Date of Inception) to June 30, 2007 of $43,983 increased due to

increased advertising and website costs.

fees, consisting primarily of accounting, attorney and accountant fees, were

$262,683 for the six months ended June 30, 2008 when compared with March 9, 2007

(Date of Inception) to June 30, 2007 of $349,741 decreased due to acquisition

and merger costs in 2007.

miscellaneous expenses, amounted to $181,900 for the nine months ended September

30, 2008 increased when compared with March 9, 2007 (Date of Inception) to

September 30, 2007 of 79,302 due to facility production for the FuelMeister

product and balance owed for the building lease for BSI.

expenses were $73,216 for the nine months ended September 30, 2008 decreased

when compared with March 9, 2007 (Date of Inception) to September 30, 2007 of

$140,170 due to BSI no longer operating and lower advertising for the

Fuelmeister product.

and development

transaction expense was $0 for the nine months ended September 30, 2008 compared

to $3,140,000 for March 9, 2007 (Date of Inception) to September 30, 2007 due to

the acquisition of the RBI.

fees, consisting primarily of accounting and attorney fees were $319,406 for the

nine months ended September 30, 2008 decreased when compared with March 9, 2007

(Date of Inception) to September 30, 2007 of $429,891 due to acquisition and

merger costs in 2007, where we had no acquisitions and mergers in

and Administrative Expenses

1 unchanged sentence

consisting of administrative expenses, insurance and other non-manufacturing

related expenses were $324,762 for the six months ended June 30, 2008 when

compared with March 9, 2007 (Date of Inception) to June 30, 2007 of $100,494

increased due to additional costs associated with the

related expenses were $388,153 for the nine months ended September 30, 2008

increased when compared with March 9, 2007 (Date of Inception) to September 30,

2007 of $315,209 due to additional costs associated with the

Fuelmeister .

of Intangible Assets

of intangible assets was $192,650 for the six months ended June 30, 2008,

primarily due to the amortization of assets acquired in the acquisition

(Income) Expense

(income) expense, was $1,071,335 for the three months ended June 30, 2008

consisted of interest expense of $644,802 other expenses of $29,836, and

discounted operation of $396,806, when compared with the period March 9,

2007 (Date of Inception) to June 30, 2007 of $435,304, increase is due to

additional interest and debt discount associated with our convertible debenture

obligations, along with discounted operations of BSI.

result of the above, we reported a net loss of $1,904,018 for the six months

ended June 30, 2008 and a net loss of $6,001,538 for March 9, 2007 (Date of

Inception) to June 30, 2007.

of intangible assets was $260,267 for the nine months ended September 30, 2008

increased when compared to March 9, 2007 (Date of Inception) to September

30, 2007 of $58,707 due to a full nine months in 2008 for the amortization of

assets acquired in the acquisition Fuelmeister and BSI.

expense of interest expense of $1,077,838 for the nine months ended September

30, 2008 increased when compared with March 9, 2007 (Date of Inception) to

September 30, 2007, interest of $636,477 due to all of the convertible debenture

obligations for 2008.

operations of $(373,868) for the nine months ended September 30, 2008 compared

to $0 for March 9, 2007 (Date of Inception) to September 30, 2007 is due to BSI

no longer operating in 2008.

result of the above, we reported a net loss of $2,517,339 for the nine months

ended September 30, 2008 and a net loss of $10,163,124 for March 9, 2007 (Date

of Inception) to September 30, 2007.

LIQUIDITY AND CAPITAL

2 unchanged sentences

assuming we will continue as a going concern.

During the six months ended June

30, 2008, we had a net loss of $1,904,018 which included non-cash items totaling

$1,267,676, consisting primarily of depreciation, amortization of financing

fees, convertible debt, and discontinuation of operations.

Our existence is

dependent on management’s ability to develop profitable operations and

successful integration of our acquired businesses.

During the nine months ended

September 30, 2008, we had a net loss of $2,517,339 which included non-cash

items totaling $1,746,948, consisting primarily of depreciation, amortization of

financing fees, convertible debt, and discontinuation of operations.

existence is dependent on management’s ability to develop profitable operations

and successful integration of our acquired businesses.

used in investing activities was $13,097, which is the purchase of depreciable

1 unchanged sentence

from note payables from stockholders.

currently do not have sufficient cash reserves to meet all of our anticipated

obligations for the next twelve months and there can be no assurance that we

will ultimately close on the necessary financing.

In addition to any third-party

financing we may obtain, we currently expect that funding from related parties,

debt, or equity may be a continuing source of liquidity to fund our

Accordingly, we will need to seek funding in the

We currently do not have sufficient cash

reserves to meet all of our anticipated obligations for the next twelve months

and there can be no assurance that we will ultimately close on the necessary

We currently expect that funding from related parties, third-party

financing, or equity may be a continuing source of liquidity to fund our

OFF-BALANCE SHEET

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of Credit Risk

Company has several customers that accounted for the total revenue for the six

months ended June 30, 2008.

Company has several customers that accounted for the total revenue for the nine

months ended September 30, 2008.

Company recognizes sales when earned.

27 unchanged sentences

accordingly, our disclosure controls and procedures were not effective as

of June 30, 2008, and (iii) no change in internal controls over financial

reporting occurred during the quarter ended June 30, 2008, that has materially

affected, or is reasonably likely to materially affect, our internal

control over financial reporting;

provided, however, that it is to be noted

that, based on the above described material weakness, our management, including

our CEO and CFO have concluded that we did not maintain effective internal

control over financial reporting as of June 30, 2008.

of September 30, 2008, and (iii) no change in internal controls over

financial reporting occurred during the quarter ended September 30, 2008, that

has materially affected, or is reasonably likely to materially affect, our

internal control over financial reporting;

provided, however, that it is to be

noted that, based on the above described material weakness, our management,

including our CEO and CFO have concluded that we did not maintain effective

internal control over financial reporting as of September 30, 2008.

controls and procedures and other procedures are designed to ensure that

29 unchanged sentences

have been no changes in our internal controls over financial reporting during

the quarter ended June 30, 2008, which have materially affected, or are

the quarter ended September 30, 2008, which have materially affected, or are

reasonably likely to materially affect, our internal control over financial

II - OTHER INFORMATION

Legal Proceedings.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis