UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the fiscal year ended December 31, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _________ to _____________

Commission file number: 000-50619

MOMENTUM BIOFUELS, INC.
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(Exact name of registrant as specified in its charter)

Colorado 84-1069035
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.

4700 New West Dr. Pasadena, TX 77507
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number,including area code: (281) 334-5161

Securities registered pursuant toSection 12(b) of the Act:

Title of each class registered Name of each exchange
on which registered
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Not Applicable Not Applicable

Securities registered pursuant to Section 12(g) of the Act:
Common Stock
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Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes |_| No |X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. |_|

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. |X|

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One).

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Large accelerated filer [___] Accelerated filer [___]
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Non-accelerated filer [___] Smaller reporting company [_X_]
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Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

The aggregate market value of voting stock held by non-affiliates of the
registrant was $3,584,889.

There were 47,724,444 shares outstanding of the registrant's Common Stock as of
April 6, 2009.

TABLE OF CONTENTS Page
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PART I

ITEM 1 Business 1
ITEM 1 A. Risk Factors 7
ITEM 1 B. Unresolved Staff Comments 17
ITEM 2 Properties 17
ITEM 3 Legal Proceedings 17
ITEM 4 Submission of Matters to a Vote of Security Holders 17

PART II

ITEM 5 Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities 18
ITEM 6 Selected Financial Data 20
ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations 20
ITEM 7 A. Quantitative and Qualitative Disclosures About Market Risk 24
ITEM 8 Financial Statements and Supplementary Data 25
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure 25
ITEM 9 A. Controls and Procedures 25
ITEM 9 A(T). Controls and Procedures 26
ITEM 9B Other Information 26

PART III

ITEM 10 Directors, Executive Officers, and Corporate Governance 27
ITEM 11 Executive Compensation 29
ITEM 12 Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 33
ITEM 13 Certain Relationships and Related Transactions, and Director Independence 34
ITEM 14 Principal Accounting Fees and Services 36

PART IV

ITEM 15 Exhibits, Financial Statement Schedules 36

SIGNATURES 37

Note about Forward-Looking Statements

This From 10-K contains forward-looking statements, such as statements relating
to our financial condition, results of operations, plans, objectives, future
performance and business operations. These statements relate to expectations
concerning matters that are not historical facts. These forward-looking
statements reflect our current views and expectations based largely upon the
information currently available to us and are subject to inherent risks and
uncertainties. Although we believe our expectations are based on reasonable
assumptions, they are not guarantees of future performance and there are a
number of important factors that could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. By making
these forward-looking statements, we do not undertake to update them in any
manner except as may be required by our disclosure obligations in filings we
make with the Securities and Exchange Commission under the Federal securities
laws. Our actual results may differ materially from our forward-looking
statements.

PART I

ITEM 1. BUSINESS
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General

The following is a summary of some of the information contained in this
document. Unless the context requires otherwise, references in this document to
"Momentum," or the "Company" are to Momentum BioFuels, Inc.

HISTORY OF MOMENTUM BIOFUELS, INC.
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Momentum BioFuels, Inc. was incorporated on January 29, 1987, in the state of
Colorado, as Tonga Capital Corporation and was a non-operating entity classified
as a shell company under Rule 12b-2 of the Securities Exchange Act of 1934.
Prior to May 2006, the Company had limited activities and was essentially
dormant.

On November 1, 2007, we changed our name from Tonga Capital Corporation to
Momentum Biofuels, Inc. As result of the name change, our trading symbol was
changed from TGCP.OB to MMBF.OB.

We maintain a website at www.momentumbiofuels.com, which is not incorporated in
and is not a part of this report.

COMPANY OVERVIEW
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Momentum is a "pure play" biodiesel producer focused on servicing the U.S. Gulf
Coast and in the future, international biodiesel markets. Momentum plans to
manufacture high quality, low cost and socially responsible biodiesel fuels that
complement and integrate with the existing diesel fuel supply chain. Biodiesel
is a domestic, renewable fuel for use in diesel engines that is derived from
natural vegetable oils and animal fats. Biodiesel contains no petroleum, but can
be used in any concentration with petroleum-based diesel fuel in existing diesel
engines without engine modification.

We manufacture high quality biodiesel fuel for sale to local distributors,
jobbers, and state and local government fleets. Biodiesel is a domestic,
renewable fuel for use in diesel engines that is derived from vegetable oils or
animal fats, and can be blended with petroleum-based diesel fuel for use in
existing diesel engines. We derive the biodiesel that we produce from soybean
oil.

Since June 30, 2006, we have focused our business efforts on the construction of
a biodiesel production facility located in LaPorte, Texas. Construction on the
production facility was completed during the quarter ended June 30, 2007 and at
that time we had the capability to produce biodiesel and sell product. We
estimate that the production facility is capable of producing 1,667,000 gallons
per month (approximately 20,000,000 gallons per year).

The production facility also includes production facility administration offices
and laboratory space. All other administrative and sales formerly conducted at
the League City offices were moved to the plant for productivity and expense
reductions. The Company does have to make some improvements to the production
facility as mandated by local municipalities in order to comply with evolving
fire code ordinances and safety considerations.

Product Overview

The primary product that Momentum produces is pure biodiesel that is also known
as B-100 ("biodiesel"). Biodiesel is a domestic, renewable fuel for use in
diesel engines that is derived from natural vegetable oils and animal fats.
Biodiesel contains no petroleum, but it can be used in any concentration with
petroleum-based diesel fuel in existing diesel engines with no major
modification to the engines. Biodiesel is produced by a simple manufacturing
process called transesterification, which removes glycerin from the vegetable
oil or animal fat. The process leaves two products, biodiesel and glycerin.

Biodiesel is an alternative fuel choice to the use of pure petroleum-based
diesel. Biodiesel provides several environmental, health and efficiency
advantages over the use of pure petroleum-based diesel. The most significant of
these advantages is that biodiesel burns cleaner than petroleum-based diesel.
When used in conventional diesel engines, studies have shown biodiesel to reduce
emissions of total unburned hydrocarbons by as much as 70% and total carbon
monoxide and other particulate matter by almost 50%. The use of biodiesel
essentially eliminates sulfur emissions altogether. The use of biodiesel also
significantly reduces health risks associated with petroleum diesel. The
Environmental Protection Agency ("EPA"), has surveyed a large body of studies
whose findings show that biodiesel emissions exhibit decreased levels of
polycyclic aromatic hydrocarbons ("PAH") and nitrated polycyclic aromatic
hydrocarbons ("nPAH"), which have been identified as potential cancer causing
compounds. In the health effects testing, PAH compounds were seen to be reduced
by 75% to 85%, and targeted PAH compounds were reduced by 90% to 99%. These
reductions in carcinogens are also realized in blends as low as B-20 (a mixture
of 20% biodiesel and 80% petroleum diesel.) In May 2000, biodiesel became the
only alternative fuel in the country that successfully completed the Tier I and
Tier II Health Effects testing required under the Clean Air Act. These results
clearly demonstrate that significant reductions in most currently regulated
emissions can be achieved by using biodiesel.

Biodiesel has additional advantages over traditional petroleum-based diesel
other than burning cleaner. Biodiesel has an extremely high flash point, making
it safer to transport than petroleum diesel because it takes a higher
temperature to flame. Biodiesel is also easier on diesel engines; increasing
engine life with its usage, as well as reducing the odor that petroleum-based
diesel produces. Biodiesel delivers similar torque, horsepower and
miles-per-gallon as petroleum-based diesel, without any need to make engine
modifications or changes in the fuel handling system or in the delivery system.

Industry Overview

The market awareness for biodiesel and alternative fuels is growing at a rapid
pace due, in part, to fluctuations in petroleum prices, the continued
availability of government subsidies and federal regulations. In 2002,
approximately 15 million gallons of biodiesel were produced in the United
States. Production increased from 25 million gallons in 2003 to 200 million
gallons in 2006. In 2007, the U.S. biodiesel industry produced nearly 500
million gallons of high quality, clean burning, sulfur free biodiesel, an
increase of 150%. The National Biodiesel Board ("NBB") has estimated that the
number of consumer biodiesel stations rose nearly 50% last year to 200 biodiesel
stations. The Company believes that biodiesel will be further integrated into
the existing petroleum-delivery infrastructure as more terminals begin to carry
it. Terminals currently carrying biodiesel are located in Kansas, Texas,
Alabama, Georgia, Minnesota, Indiana, Wisconsin and Iowa. Recently, a major
pipeline company announced that it intends to invest $100 million in a biodiesel
storage facility located within close proximity to the Company's LaPorte plant.
The Company believes that this is further evidence that the demand for biodiesel
is increasing.

The U.S. Department of Energy ("DOE") has identified biodiesel as the fastest
growing segment of the alternative fuel market. The DOE has estimated that
biodiesel sales could reach approximately $2 billion annually through the use of
government incentives; this represents approximately 8% of conventional highway
diesel fuel consumption. Based on current rates of petroleum consumption, the
DOE also predicts that demand for petroleum products will outstrip supply by
2037. These projected increases in the biodiesel market are driven by a
combination of not only environmental and health concerns, but also by the need
for the United States to reduce its dependence on petroleum.

The biodiesel industry is part of the broader alternative fuel industry.
Alternative fuel is any fuel that can be substituted for traditional petroleum
based gasoline or diesel fuels. Compressed natural gas, methanol, ethanol,
propane, electricity, biodiesel and hydrogen are all federally recognized
alternative fuel sources. There are vehicles that are currently designed to run
on such alternative fuels. Biodiesel has the advantage over these fuels because
it works in existing diesel engines, and eliminates engine modification costs
that would ultimately be passed on to the consumer.

Federal, state, and local governments that operate fleets of diesel vehicles
continue to be the main driver of demand for the biodiesel industry. The Energy
Policy Act of 1992 ("EPAct") requires that these fleets earn alternative fuel
vehicle credits, which can be accomplished by purchasing biodiesel. The NBB
estimated that the federal fleets have increased usage of biodiesel from
approximately 500,000 gallons in 2000 to around 30 million gallons in 2004. By
May of 2004, according to the NBB, there were more than 400 major government
fleets using biodiesel, including all branches of the United States military,
Yellowstone National Park, NASA, several state departments of transportation,
major public utility fleets, cities fleets such as Berkley, California and more
than 50 school districts.

The extent of biodiesel's penetration in these markets is largely a result of
the requirements of the EPAct. The EPAct requires federal, state and some local
fleets to phase in partial use of alternative fuel vehicles by 2006. Government
vehicles can meet the requirements of the Act by using B-20 in their existing
diesel engines. Because B-20 does not require fleets to purchase new equipment,
it is the cheapest way to comply with the EPAct. An NBB-sponsored survey of
operators of 53 fleets representing more than 50,000 diesel-powered vehicles
found that 91% of respondents were in favor of using biodiesel. Forty-five
percent of the operators surveyed were currently using biodiesel and among them,
B-20 was the fuel of choice. On March 21, 2007, Cummins, Inc., a major
manufacturer of diesel engines, approved the use of B-20 in their 2002 and later
emission-compliant engines. We believe that these types of endorsements will
help drive the demand for the B-100 biodiesel product.

We believe that the new "clean diesel" rules promulgated by the EPA also have
the potential to increase demand for biodiesel. Starting in 2006, the EPA
required diesel refiners to reduce nitrogen oxide emissions by removing up to
99% of the sulfur content in the fuel. Sulfur gives petroleum-based products
greater lubrication and reducing sulfur in petroleum-based diesel reduces the
fuel's lubricity which can lead to engine damage. However, biodiesel produced
from soybean oil has no sulfur and serves as a good lubricator. This provides a
solution to refiners seeking compliance with these new regulations. In May 2004,
the EPA announced that these same rules would apply, starting in 2007, to diesel
refiners for "off-road" diesel vehicles, such as farm and construction
equipment. Those industries affected by the change will include agriculture,
construction and mining, all of which rely heavily on larger diesel machinery.

Product Development

The primary product that the Company produces is pure biodiesel (B-100). The
Company also sells the glycerin that is produced as a by-product of the
biodiesel manufacturing process. Glycerin is a primary component used in the
manufacturing of soap and other products. While the Company is also committed to
providing other alternative fuels in the future, at this time, the Company may
at some later date produce and market products other than B-100 and glycerin.

Momentum has successfully, completed plant construction and plant acceptance
testing, allowing management to be positioned to sell biodiesel to distributors,
jobbers, local and governmental fleets located throughout Texas. The Company
intends to concentrate on building a market presence in Texas through the sale
of B-100.

The Company continues the process of establishing relationships with
distributors in Texas and with national distributors interested in purchasing
biodiesel. In addition to marketing to local distributors, the Company intends
to directly market its product to government fleets and metropolitan public
transport fleets.

The Company's continued focus will be on efficiently operating the LaPorte plant
at its planned capacity and sales of the product. The Company does contemplate
in the future building additional plants in the Gulf Coast region. The Company
hopes to identify and secure additional production sites which are adjacent to
or co-located with marine fuel terminals. This strategy would allow the Company
to take advantage of waterborne logistics for delivery of feedstock and delivery
of finished products, including access to the expanding European marketplace.
Biodiesel finished products must eventually converge into the traditional fuel
supply chain; access to terminal storage and integration into the domestic fuel
pipeline and fuel terminal infrastructure is a key consideration of liquidity
and marketability of biodiesel.

Cost/Price of Product

Momentum forecasts the price of its biodiesel as of December 31, 2008 at $2.95
per gallon and the price of its biodiesel by-products at $0.10 per gallon. These
prices represent estimates used when forecasting sales and are subject to change
depending on market conditions. B-100, on average, costs about $1.00 more per
gallon than the petroleum diesel spot price because of the costs of the
vegetable oil or animal fats used in production. Momentum believes that strong
demand exists despite the added cost, due to the need of users to meet the
requirements of the Energy Policy Act, EPA regulations, the recent $1.00 tax
incentive for blenders of biodiesel and the added benefits that biodiesel has
over petroleum-based diesel. Pricing for additional products being contemplated
by the company will be determined at the time such products are produced. It is
management's opinion that these products will be at a higher profit margin to
the Company than straight B100.

Momentum estimates the current cost of raw materials necessary to produce one
gallon of biodiesel to be approximately $2.75. Momentum anticipates that
earnings potential will improve as we bring the La Porte Plant into full
production status and bring additional plants and revenue generating derivatives
online, however, increases in commodities prices could raise production costs to
the point of unprofitability.

Patents and Trademarks

Because the process for making biodiesel is well known, Momentum does not own or
utilize patents related to the production of its products. However, certain
configurations of equipment and certain systems in use at the La Porte plant are
believed to be patentable. Momentum intends to pursue the development and filing
of patent applications for such equipment and systems and alternative use
products. Momentum intends to utilize "Momentum" as a trademark and trade name
in connection with the sale and marketing of its products. Momentum intends to
monitor the use of future developed intellectual property and will evaluate from
time to time if it is in the best interest to patent such property.

Regulations

The products that Momentum intends to produce are subject to meeting standard
ASTM D 6751 set forth by the American Society for Testing and Materials for
biodiesel. Production is also subject to federal, state and local regulations
concerning the environment and occupational safety and health. The Company
anticipates that Momentum will not experience difficulty in complying with these
regulations.

COMPETITION, MARKETS, REGULATION AND TAXATION

Competition

The current biodiesel industry in Texas is fragmented. There is no one producer
dominating any segment of the market. The market is composed mainly of small
producers scattered around the state and several larger producers either in
production, or scheduled to be in production within the next year.

In addition to the above mentioned producers, major integrated oil and chemical
companies who have substantial access to resources could choose to enter the
market and offer significant competition to the company. The Company also faces
competition from those companies who provide alternative fuel sources, other
than biodiesel and from existing petroleum-based diesel producers.

Marketing Strategy.

Unlike its competitors, Momentum does not intend to sell its biodiesel product
directly to the end user other than government and municipalities. Instead,
Momentum plans to market its product to companies and government organizations
that will distribute the product to the end user. Nevertheless, Momentum does
intend to employ a marketing strategy that involves direct contact with certain
targeted groups of potential customers. These groups include city transit,
county equipment, the military, school bus fleets, fuel distributors and other
state and local fleets.

Momentum plans to take advantage of government programs, including the EPA's
Clean School Bus USA Program that is dedicated to ensuring cleaner school bus
transportation. Momentum believes that the availability of government grants
under this program will provide an incentive for a portion of the school
districts in Texas to switch to biodiesel. Some school districts have utilized
these government funds to experiment with biodiesel.

The Company's coastal Texas location gives Momentum access to one of the larger
ports in the world, the Port of Houston, and it also is a strategic waterway in
the United States, itself. The Intercoastal Waterway provides Momentum a very
cost effect channel to deliver feedstock to our plant and to deliver finished
product into the U.S. diesel fuel supply chain. The Port of Houston provides
ready access to European and other developing non U.S. marketplaces.

Fuel Distributors

There are a number of wholesale fuel distributors across the country that
provide biodiesel as an alternative to diesel. Momentum's strategy is to align
with these distributors and take advantage of the anticipated increase in demand
as biodiesel usage gains popularity. Management also intends to market its
product to existing distributors of petroleum-based fuels in Texas and along the
Gulf Coast.

State and Local Fleets

The Energy Conservation Act of 1998 allows federal, state and alternative fuel
provider fleets who must comply with the Energy Policy Act to meet up to
one-half of their light duty alternative fueled vehicle purchase requirements
with biodiesel. Biodiesel allows city fleets to move toward compliance without
purchasing new vehicles, providing a cheap and attractive alternative to
overhauling existing fleets.

Tolling and Off-Take Agreements

In addition to the above mentioned marketing opportunities, Momentum will
actively pursue tolling and off-take opportunities to reduce its exposure to
commodity prices and to lock-up margins on finished product. Under a tolling
agreement, Momentum is provided with feedstock and on occasion other chemicals
required to produce biodiesel. Momentum is then paid a set amount for each
gallon of product produced. The product is then turned over to the tolling
partner for distribution. These types of arrangements can be beneficial for
young companies like Momentum who have the processing capabilities and want to
utilize their capital for expansion instead of tying it up in raw materials
inventory.

Governmental Regulation and Environmental Consideration.

The biodiesel product that the Company intends to produce is subject to meeting
standard D 6751 set by the American Society for Testing and Materials.
Production is also subject to federal, state and local regulations concerning
the environment and occupational safety and health. The Company anticipates that
it will not experience difficulty in complying with these regulations.

Tax Credits and Governmental Grants

Governmental subsidies for producers of biodiesel exist at the state and federal
level. Chapter 16 of the Texas Agriculture Code entitles a producer of biodiesel
to receive $0.20 per gallon of fuel ethanol or biodiesel produced in each plant
registered according to the guidelines of the chapter until the tenth
anniversary of the date production from the plant begins. The statute further
provides that for each fiscal year, a producer of biodiesel may not receive
grants for more than 18 million gallons of fuel ethanol or biodiesel produced at
any one registered plant. The state of Texas requires the producer to pay $0.032
per gallon of biodiesel produced, thus providing a net subsidy of $0.168 per
gallon. The Company also intends to make use of the $0.10 per gallon Federal Tax
Credit, which is part of the IRS Small Agri-producer Tax Credit program. This
program provides a Tax credit up to $1.5 million per year. However, the Texas
legislature failed to fund this program at the last legislative session and no
grants or payments are currently being made. This program will be re-introduced
to the Texas legislature in the next biannual budget authorized by the Texas
legislature in 2009.

Biodiesel and blended biodiesel distributors receive a credit of $1.00 per
gallon of B-100 biodiesel marketed against their Federal Excise Tax due on
petroleum-based diesel. This credit should permit the Company to market its
biodiesel to distributors at a price of approximately $1.00 greater than
petroleum-based diesel and remain competitive with petroleum diesel. The Company
intends to fully utilize these government programs.

Company Sponsored Research and Development.
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Momentum is not currently conducting any research.

Number of Persons Employed.
- --------------------------

As of March 1, 2009, we had no paid employees. Our Chief Executive Officer with
the assistance of 2 other individuals provide services to the Company.

ITEM 1A. RISK FACTORS
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Risk Factors

OUR COMPANY RISK FACTORS

THE COMPANY HAS BEEN A DEVELOPMENT STAGE COMPANY AND HAS MINIMAL EXPERIENCE IN
THE BIODIESEL INDUSTRY, WHICH INCREASES THE RISK OF ITS ABILITY TO OPERATE THE
BIODIESEL PLANT.

We have been a development stage company that has minimal operating history on
which an investor can base an evaluation of its business and its prospects. We
are subject to the business risks and uncertainties associated with any new
business, including the risk that the business objectives may not be achieved.

Momentum has recently emerged from development stage company status and has
limited experience in the biodiesel industry, which increases the risk of
Momentum's inability to build and operate the biodiesel plant. Momentum has
recently begun limited production but has not commenced ratable production.
Momentum's only asset is the completed plant in La Porte, Texas. Momentum has
only a minimal operating history on which an investor can base an evaluation of
its business and its prospects. Momentum is subject to the business risks and
uncertainties associated with any new business, including the risk that the
business objectives may not be achieved. If this occurs, the value of an
investor's investment in the Securities could decline substantially or an
investor could lose its entire investment. The success of Momentum's business is
highly dependent upon Momentum's ability to execute its business plan.

THE COMPANY'S LACK OF BUSINESS DIVERSIFICATION COULD RESULT IN THE DEVALUATION
OF THE COMPANY'S COMMON STOCK IF REVENUES FROM MOMENTUM'S PRODUCTS DO NOT MEET
PROJECTIONS.

The Company expects Momentum's business to consist of the production and sale of
biodiesel and its co-products and potential plant construction activities.
Neither the Company nor Momentum has any other lines of business or other
sources of revenue if Momentum is unable to complete the construction and
operation of the plant. This lack of business diversification could cause
investors to lose all or some of their investment if Momentum is unable to
generate revenues by the production and sale of biodiesel and its co-products
because management does not expect to have any other lines of business or
alternative revenue sources.

MOMENTUM'S OFFICERS AND DIRECTORS ARE NOT EMPLOYED FULL-TIME BY THE COMPANY
WHICH COULD BE DETRIMENTAL TO THE BUSINESS.

Momentum's directors and officers are, or may become, in their individual
capacities, officers, directors, controlling shareholder and/or partners of
other entities engaged in a variety of businesses. Thus, there exist potential
conflicts including time and efforts involved in participation with such other
business entities. Each officer and director of Momentum's business is engaged
in business activities outside of Momentum's business, and the amount of time
they devote as Officers and Directors to Momentum's business will be up to 40
hours per week.

Momentum does not know of any reason other than outside business interests that
would prevent them from devoting full-time to Momentum, when the business may
demand such full-time.

RISKS RELATED TO OPERATION OF THE BIODIESEL PLANT

THE COMPANY WILL DEPEND ON KEY EMPLOYEES, CONTRACTORS AND SUPPLIERS, WHOSE
FAILURE TO PERFORM COULD HINDER MOMENTUM'S ABILITY TO OPERATE PROFITABLY.

Momentum will depend on the management team to train personnel in operating the
plant and its failure to do so could cause Momentum to halt or discontinue
production of biodiesel, which could damage Momentum's ability to generate
revenues.

The Company expects that our success will be highly dependent upon management's
ability to recruit, retain and train personnel to operate the plant in a safe
and productive manner. Management is also in the process of developing Plant
Safety and Plant Operations programs to ensure that the plant is operated safely
and to the level of productivity expected by the business plan. If the plant
does not operate to the level anticipated, we will rely on the management team
to address such deficiencies. There is no assurance that the management team
will be able to address such deficiencies in an acceptable manner. Failure to do
so could cause us to halt or discontinue production of biodiesel, which could
damage our ability to generate revenues and profit. We will also be highly
dependent upon the management team to manage the plant operations, procure raw
materials and market finished products. If the management team is unable to
perform these tasks satisfactorily, our ability to generate revenues could be
impacted.

CHANGES IN PRODUCTION TECHNOLOGY COULD REQUIRE MOMENTUM TO COMMIT RESOURCES TO
UPDATING THE BIODIESEL PLANT OR COULD OTHERWISE HINDER ITS ABILITY TO COMPETE IN
THE BIODIESEL INDUSTRY OR TO OPERATE AT A PROFIT.

Advances and changes in the technology of biodiesel production are expected to
occur. Such advances and changes may make our biodiesel production technology
less desirable or obsolete. The plant is a single-purpose plant and has no use
other than the production of biodiesel and associated products. Much of the cost
of the plant is attributable to the cost of production technology, which may be
impractical or impossible to update. Changes in technology could cause us to
operate the plant at less than full capacity for an extended period of time or
cause us to abandon its business.

THE PLANT IS A SPECIAL USE FACILITY. THE ENTIRE INVESTMENT IN THE PLANT MAY BE
LOST IF MOMENTUM CANNOT USE IT SUCCESSFULLY TO PRODUCE BIODIESEL PRODUCTS.

Momentum's LaPorte biodiesel plant is a special use facility. Though it could be
modified for other uses, the value of the plant would be drastically reduced if
the plant becomes unable to economically produce biodiesel. This could be caused
by emerging technologies, local taxes, repeal of State and Federal subsidies for
alternative fuels or other factors not controlled by management.

PLANT LOCATION

Though the plant is located in an area accessible to both rail and trucking
lines, increases in either of these transportation expenses due to increased
fuel costs or other factors outside of Momentum's control could adversely affect
the profitability of the Company.

RISKS RELATED TO BIODIESEL PRODUCTION AND MARKETING

THE SUCCESS OF MOMENTUM IS DEPENDENT ON PRODUCING BIODIESEL TO COMMERCIAL
STANDARDS.

Momentum has produced or marketed the intended product in limited quantities.
The Company cannot assure that we will have success in marketing its product on
a larger scale. The inability to successfully market and sell its product would
have an adverse effect on our profitability.

MOMENTUM'S ABILITY TO OPERATE AT A PROFIT IS LARGELY DEPENDENT ON MARKET PRICES
FOR BIODIESEL.

Results of operations and financial condition will be significantly affected by
the selling price of biodiesel and related by-products. Price and supply are
subject to and determined by market forces over which neither the Company nor
Momentum has control. Revenues will be heavily dependent on the market prices
for biodiesel. The NBB has estimated that in 2007 biodiesel production capacity
was 864 million gallons per year, but only 200 million gallons were being
produced. The NBB also suggests that there is over 1.7 billion gallons of
capacity planned or under construction. Though large, this total planned
capacity represents only 4% of the 2007 U.S. diesel fuel consumption of 60
Billion gallons. If this total production capacity comes on-line, there can be
no assurances that demand will rise to meet the increase in supply. Further,
increased production of biodiesel may lead to lower prices which could
significantly reduce the value of the Company.

Increased biodiesel production will likely also lead to increased supplies of
other products derived from the production of biodiesel, such as glycerin.
Glycerin prices in Europe have already declined over the last several years due
to increased biodiesel production and saturation of the glycerin market. Those
increased supplies could outpace demand in the United States, which would lead
to lower prices for those products. There can be no assurance as to the price of
biodiesel or any of its related products in the future. Any downward changes in
the price of biodiesel or its related products may result in less income, which
would decrease the Company's revenues.

COMPETITION FROM OTHER SOURCES OF FUEL MAY ADVERSELY AFFECT MOMENTUM'S ABILITY
TO MARKET BIODIESEL.

Although the price of diesel fuel has increased over the last several years and
continues to rise, diesel fuel prices per gallon remain at levels below or equal
to the price of biodiesel. In addition, other more cost-efficient domestic
alternative fuels may be developed and displace biodiesel as an
environmentally-friendly alternative to petroleum-based products. If diesel
prices do not continue to increase or a new fuel is developed to compete with
biodiesel, it may be difficult to market biodiesel, which could result in the
loss of revenues.

MOMENTUM'S BUSINESS IS SENSITIVE TO FEEDSTOCK PRICES, WHICH COULD INCREASE
PRODUCTION COSTS AND DECREASE REVENUES.

The main ingredient that will be used to produce biodiesel is soybean oil. The
cost of soybean oil represents approximately 85% of the cost of biodiesel
production. Soybean oil is an international commodity, the prices for which are
subject to the international agricultural market. Changes in the price of
soybean oil can significantly affect our business. The price of soybean oil
varies dramatically from month to month and year to year based on complex
factors at play in the world soybean oil market. The price of soybean oil has
fluctuated between $0.16 and $0.65 per pound over the last 3 years. Increased
biodiesel production may also lead to an increase in the price of feedstock.
Rising feedstock prices may produce lower profit margins. Soybean prices may
also be affected by other market sectors, because soybeans are comprised of 80%
meal used for feed and only 20% oil. Because there is little or no correlation
between the price of feedstock and the price of biodiesel, we cannot pass along
increased feedstock prices to our biodiesel customers. There is no guarantee
that we will be successful in controlling costs of soybean oil. Adverse pricing
in the world market may have an adverse affect on our profitability or ability
to continue as a going concern. While management is committed to testing its
process with other feedstock (i.e. sunflower oil, palm oil, rapeseed oil, and
chicken or beef tallow), there is no guarantee that the use of these feed stocks
will result in increased profit margins for the Company. As a result, the
inability to control feedstock prices may result in decreased profits or the
inability to produce biodiesel at a profit.

ASIAN SOYBEAN RUST AND OTHER PLANT DISEASES COULD INCREASE THE COST AND
AVAILABILITY OF FEEDSTOCK, THEREBY REDUCING MOMENTUM'S REVENUES.

Our current feedstock supply is highly dependent upon the availability and price
of soybeans. Asian soybean rust is a plant fungus that attacks certain plants
including soybean plants. Asian soybean rust is abundant in certain areas of
South America and its presence in the United States was recently confirmed. Left
untreated, it can reduce soybean harvests by as much as 80%. Although it can be
killed with chemicals, the treatment increases production costs for farmers by
approximately 20%. Increases in production costs and reduced soybean supplies
could cause the price of soybeans to rise and increase the cost of soybean oil
as a feedstock to the plant. An increase in the cost of feedstock supply would
increase the cost of producing biodiesel and could decrease profits from
operations.

RELIANCE UPON THIRD-PARTIES FOR RAW MATERIAL SUPPLY MAY HINDER MOMENTUM'S
ABILITY TO PROFITABLY PRODUCE BIODIESEL.

In addition to being dependent upon the availability and price of feedstock and
chemical supplies, Momentum will be dependent on relationships with third
parties, including feedstock suppliers. Momentum must be successful in
establishing feedstock agreements with third parties. Although Momentum is in
discussions with several feedstock suppliers and has purchased feedstock for
minimal production under several tolling agreements, it has no binding
commitments from anyone to supply its feedstock long-term. Assuming that
Momentum can formalize feedstock purchase contracts, those suppliers could still
interrupt Momentum's supply by not meeting their obligations under the
contracts. If, because of market conditions, Momentum is forced into a
competitive environment for procurement of raw soy oil, animal fats and other
feedstock or Momentum is unable to obtain adequate quantities of feedstock at
economical prices, Momentum's business model could be unsustainable resulting in
a significant reduction in the value of the Securities.

AUTOMOBILE MANUFACTURERS AND OTHER INDUSTRY GROUPS HAVE EXPRESSED RESERVATIONS
REGARDING THE USE OF BIODIESEL, WHICH COULD AFFECT MOMENTUM'S ABILITY TO MARKET
OUR BIODIESEL.

Because it is a relatively new product, the research of biodiesel use in
automobiles and its effect on the environment is ongoing. Some industry groups
and standards, including the World Wide Fuel Charter, have recommended that
blends of no more than 5% biodiesel be used for automobile fuel due to concerns
about fuel quality, engine performance problems and possible detrimental effects
of biodiesel on rubber components and other parts of the engine. Although some
manufacturers have encouraged the use of biodiesel fuel in their vehicles,
cautionary pronouncements by others may affect our ability to market our
product. In addition, studies have shown that nitrogen oxide emissions from pure
biodiesel increase by 10%. Nitrogen oxide is the chief contributor to ozone or
smog. New engine technology is available and is being implemented to eliminate
this problem. However, these emissions may decrease the appeal of our product to
environmental groups and agencies who have been historic supporters of the
biodiesel industry.

MOMENTUM FACES SUBSTANTIALLY DIFFERENT RISKS IN THE BIODIESEL INDUSTRY THAN DO
ETHANOL MANUFACTURERS.

The ethanol industry enjoys over 3 billion gallons of annual domestic demand and
a vast existing production, marketing, and transportation network servicing a
substantial demand. Conversely, in 2006, the biodiesel industry supplied only
approximately 200 million gallons of fuel for domestic consumption. The entire
diesel fuel market constitutes only about one-third of the gasoline market as a
whole. The trucking industry consists of approximately 56% percent of the diesel
market. Furthermore, diesel vehicles make up about only 4% of all passenger
vehicle sales. Acceptance of biodiesel by consumers has been slow, and the
biodiesel industry has faced opposition from the trucking industry and others
about legislative mandates for its use. The present marketing and transportation
network for biodiesel must expand significantly before biodiesel can become a
significant component of the alternative fuels marketplace, making marketing of
the final product difficult. For example, unlike ethanol, biodiesel is often not
readily available at pumps in gasoline stations. Therefore, the Company may be
unable to market its biodiesel profitably.

In addition, the Company faces a substantially different market than do ethanol
producers for the supply of raw material. Manufacturers of ethanol often
purchase raw grains directly from producers, which presents an almost unlimited
supply from thousands of corn growers. We purchase only raw or partially refined
oils and fats from a very limited number of suppliers. Accordingly, we may be
unable to obtain the necessary supply of raw materials and may be unable to
operate at profitable levels.

The ethanol industry has historically enjoyed substantially more governmental
support than the biodiesel industry on both the federal and state levels.
Although the Energy Policy Act of 2005 enacted or extended certain tax credits
for the biodiesel industry, such incentives had been previously available to the
ethanol industry. In addition, various states offer other production subsidies
for ethanol. Subsidies for ethanol make its production more profitable. These
and other differences between the ethanol industry and our industry make risk
and investment comparisons between the two industries unreliable.

MOMENTUM WILL COMPETE FOR CUSTOMERS IN AN UNDEFINED MARKETPLACE THAT IS IN ITS
INFANCY.

The biodiesel industry is relatively new, and therefore the long-term customer
base has not been adequately defined. Customers may include municipalities,
school districts, the military, federal fleets and retail. Because the customer
base may be narrow, it is possible that other producers of biodiesel may provide
significant competition for these markets. The Company has not conducted a
market study to substantiate the fact that significant competition might not
arise or that the market would not be sensitive to such competition. The Company
may not be able to compete successfully in the marketplace.

MOMENTUM WILL COMPETE FOR RAW MATERIALS FOR WHICH MANY OTHER MATURE INDUSTRIES
ALSO COMPETE.

In order for Momentum to produce biodiesel, it must have a continuing supply of
soy oil, vegetable fat sources, and animal fats from which to make our product.
Momentum will compete for raw materials with other industries that also have a
need for those materials. If Momentum cannot compete successfully to acquire raw
materials, Momentum will have to secure tolling agreements, reduce production or
increase the cost of production, thereby affecting the overall profitability.

RISKS RELATED TO REGULATION AND GOVERNMENTAL ACTION

The biodiesel industry relies on federal legislation to create demand for the
biodiesel product, which creates an artificial market. If the federal government
ceases to provide incentives for biodiesel products, the demand for biodiesel
products will decline.

Much of the existing demand for biodiesel is a result of the need of certain
entities to comply with the requirements of the Energy Policy Act of 1992 (and
amendments thereto) and clean air regulations promulgated by the EPA. The
Company can give no assurance that these rules and regulations will continue to
remain in effect throughout the lifetime of Momentum. If these rules and
regulations were repealed, the incentive for a substantial portion of Momentum's
targeted customer base to purchase biodiesel would be eliminated, having a
materially adverse effect on the profitability of Momentum.

REGULATION OF MOMENTUM'S BUSINESS

The biodiesel industry is subject to federal, state, and local government
regulations, including those relating to the certification of manufacturing and
product, taxes on fuel, as well as transportation, emissions, environmental,
building, and zoning requirements. Also, we will be subject to laws governing
our relationships with employees, such as minimum wage requirements, overtime,
working conditions, and work permit requirements (including the Immigration and
Nationality Act of 1990, which requires employers to ask employees to present
certain original documents to establish their identity and employment
eligibility and to verify on INS Form I-9 that they are eligible to be employed
in the U.S.). The failure to comply with such laws, obtain or retain
certification, permit or license approvals, or an increase in the minimum wage
rate, employee benefit costs, or other costs associated with employees could
have an adverse affect upon us.

LOSS OF FAVORABLE TAX AND PRODUCTION BENEFITS FOR BIODIESEL PRODUCTION COULD
HINDER MOMENTUM'S ABILITY TO OPERATE AT A PROFIT.

The Company is currently eligible for certain state subsidies and federal tax
credits which offset the cost differential between biodiesel and conventional
petroleum-based diesel products. These subsidies and tax incentives have been
approved by state entities, but are unfunded by the state and may not continue,
or, if they continue, the incentives may not remain at the same level. The
elimination or reduction of tax incentives and subsidies to the biodiesel
industry would reduce demand for biodiesel, decreasing our revenues and
profitability.

A CHANGE IN ENVIRONMENTAL REGULATIONS OR VIOLATIONS THEREOF COULD RESULT IN
ADDITIONAL COSTS FOR THE COMPANY, WHICH COULD HAVE AN ADVERSE EFFECT ON
PROFITABILITY.

Momentum is subject to extensive air, water and other environmental regulations
and is required to obtain a number of environmental permits to construct and
operate the plant. In addition, biodiesel producers are required to satisfy the
fuel quality standards of the Environmental Protection Agency (EPA). Momentum
has either applied for or are in the process of applying for all required
permits and does not anticipate that any of these permits will be denied, or
that the permitting process will delay scheduled production. However, if for any
reason Momentum is unable to obtain any of these permits, costs could increase
and the plant completion could be delayed. Additionally, environmental laws and
regulations, both at the federal and state level, are subject to change, and
changes can be made retroactively. Consequently, even if the Company has the
proper permits at the proper time, it may be required to invest or spend
considerable resources to comply with future environmental regulations or new or
modified interpretations of those regulations.

Under various federal, state, and local laws, ordinances and regulations, an
owner and operator of a biodiesel plant may be liable for the costs of removal
or remediation of certain hazardous substances released or located on its
property. Such laws often impose liability without regard to whether the owner
or operator knew of, or was responsible for, the release or presence of such
hazardous substances. The presence of such substances, or the failure to
properly remediate such substances, when released, may adversely affect the
owner's ability to sell such plant or to borrow funds using such plant as
collateral. In addition to clean-up actions brought by federal, state and local
agencies, the presence of hazardous waste on the plant site could result in
personal injury or similar claims by private plaintiffs. Though the Company
intends to properly utilize the plant, there is always the possibility that
through accident or otherwise, environmental liabilities might arise, and in
such case, the clean up thereof might prove very expensive, thereby decreasing
the profitability or increasing the liabilities of the Company.

MOMENTUM HAS AGREED TO INDEMNIFICATION OF OFFICERS AND DIRECTORS AS IS PROVIDED
BY COLORADO REVISED STATUTE.

Colorado Revised Statutes provide for the indemnification of our directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses incurred by them in any litigation to which they become
a party arising from their association with or activities our behalf. Momentum
will also bear the expenses of such litigation for any of our directors,
officers, employees, or agents, upon such person's promise to repay us therefore
if it is ultimately determined that any such person shall not have been entitled
to indemnification. This indemnification policy could result in substantial
expenditures by us that we will be unable to recoup.

MOMENTUM DIRECTORS' LIABILITY TO US AND SHAREHOLDERS IS LIMITED.

Colorado Revised Statutes exclude personal liability of our directors and our
stockholders for monetary damages for breach of fiduciary duty except in certain
specified circumstances. Accordingly, we will have a much more limited right of
action against our directors that otherwise would be the case. This provision
does not affect the liability of any director under federal or applicable state
securities laws.

MOMENTUM MAY DEPEND UPON OUTSIDE ADVISORS, WHO MAY NOT BE AVAILABLE ON
REASONABLE TERMS AND AS NEEDED.

To supplement the business experience of our officers and directors, we may be
required to employ accountants, technical experts, appraisers, attorneys, or
other consultants or advisors. Our Board without any input from stockholders
will make the selection of any such advisors. Furthermore, we anticipate that
such persons will be engaged on an "as needed" basis without a continuing
fiduciary or other obligation to us. In the event we consider it necessary to
hire outside advisors, we may elect to hire persons who are affiliates, if they
are able to provide the required services.

RISK FACTORS RELATED TO OUR STOCK

THERE ARE LIMITED TRADING MARKETS FOR THE COMPANY'S COMMON STOCK, THEREBY
LIMITING A SHAREHOLDERS' OPPORTUNITY TO SELL SUCH COMMON STOCK.

Currently, only a limited trading market exists for the Company's common stock.
The common stock trades on the Over-The-Counter Bulletin Board ("OTCBB") under
the symbol "MMBF." The OTCBB is a limited market and subject to substantial
restrictions and limitations in comparison to the NASDAQ system. Any
broker/dealer that makes a market in the Company's stock or other person that
buys or sells our stock could have a significant influence over its price at any
given time. The Company cannot assure its shareholders that a market for the
Company's common stock will be sustained. There is no assurance that the
Company's common stock will have any greater liquidity than shares that do not
trade on a public market. A shareholder may be required to retain their shares
for an indefinite period of time, and may not be able to liquidate their shares
in the event of an emergency or for any other reasons.

THE REGULATION OF PENNY STOCKS BY SEC AND FINRA MAY DISCOURAGE THE TRADABILITY
OF OUR SECURITIES.

We are a "penny stock" company. None of our securities currently trade in any
market and, if ever available for trading, will be subject to a Securities and
Exchange Commission rule that imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. For purposes of the rule, the phrase
"accredited investors" means, in general terms, institutions with assets in
excess of $5,000,000, or individuals having a net worth in excess of $1,000,000
or having an annual income that exceeds $200,000 (or that, when combined with a
spouse's income, exceeds $300,000). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Effectively, this discourages broker-dealers from executing trades in
penny stocks. Consequently, the rule will affect the ability of purchasers in
this offering to sell their securities in any market that might develop
therefore because it imposes additional regulatory burdens on penny stock
transactions.

In addition, the Securities and Exchange Commission has adopted a number of
rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2,
15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange
Act of 1934, as amended. Because our securities constitute "penny stocks" within
the meaning of the rules, the rules would apply to us and to our securities. The
rules will further affect the ability of owners of shares to sell our securities
in any market that might develop for them because it imposes additional
regulatory burdens on penny stock transactions.

Shareholders should be aware that, according to Securities and Exchange
Commission, the market for penny stocks has suffered in recent years from
patterns of fraud and abuse. Such patterns include (i) control of the market for
the security by one or a few broker-dealers that are often related to the
promoter or issuer; (ii) manipulation of prices through prearranged matching of
purchases and sales and false and misleading press releases; (iii) "boiler room"
practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed
bid-ask differentials and markups by selling broker-dealers; and (v) the
wholesale dumping of the same securities by promoters and broker-dealers after
prices have been manipulated to a desired consequent investor losses. Our
management is aware of the abuses that have occurred historically in the penny
stock market. Although we do not expect to be in a position to dictate the
behavior of the market or of broker-dealers who participate in the market,
management will strive within the confines of practical limitations to prevent
the described patterns from being established with respect to our securities.

THE COMPANY WILL PAY NO FORESEEABLE DIVIDENDS IN THE FUTURE.

We have not paid dividends on our common stock and do not ever anticipate paying
such dividends in the foreseeable future.

RULE 144 SALES IN THE FUTURE MAY HAVE A DEPRESSIVE EFFECT ON OUR STOCK PRICE.

All of the outstanding shares of common stock held by our present officers,
directors, and affiliate stockholders are "restricted securities" within the
meaning of Rule 144 under the Securities Act of 1933, as amended. As restricted
Shares, these shares may be resold only pursuant to an effective registration
statement or under the requirements of Rule 144 or other applicable exemptions
from registration under the Act and as required under applicable state
securities laws. Rule 144 provides in essence that a person who has held
restricted securities for six months may, under certain conditions, sell every
three months, in brokerage transactions, a number of shares that does not exceed
the greater of 1.0% of a company's outstanding common stock or the average
weekly trading volume during the four calendar weeks prior to the sale. There is
no limit on the amount of restricted securities that may be sold by a
non-affiliate after the owner has held the restricted securities for a period of
two years. A sale under Rule 144 or under any other exemption from the Act, if
available, or pursuant to subsequent registration of shares of common stock of
present stockholders, may have a depressive effect upon the price of the common
stock in any market that may develop.

MOMENTUM STOCK WILL IN ALL LIKELIHOOD BE THINLY TRADED AND AS A RESULT YOU MAY
BE UNABLE TO SELL AT OR NEAR ASK PRICES OR AT ALL IF YOU NEED TO LIQUIDATE YOUR
SHARES.

The shares of our common stock may be thinly-traded on the OTC Bulletin Board,
meaning that the number of persons interested in purchasing our common shares at
or near ask prices at any given time may be relatively small or non-existent.
This situation is attributable to a number of factors, including the fact that
we are a small company which is relatively unknown to stock analysts, stock
brokers, institutional investors and others in the investment community that
generate or influence sales volume, and that even if we came to the attention of
such persons, they tend to be risk-adverse and would be reluctant to follow an
unproven, early stage company such as ours or purchase or recommend the purchase
of any of our Securities until such time as we became more seasoned and viable.
As a consequence, there may be periods of several days or more when trading
activity in our Securities is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will
generally support continuous sales without an adverse effect on Securities
price. We cannot give you any assurance that a broader or more active public
trading market for our common Securities will develop or be sustained, or that
any trading levels will be sustained. Due to these conditions, we can give
investors no assurance that they will be able to sell their shares at or near
ask prices or at all if you need money or otherwise desire to liquidate the
Securities of our Company.

MOMENTUM COMMON STOCK MAY BE VOLATILE, WHICH SUBSTANTIALLY INCREASES THE RISK
THAT YOU MAY NOT BE ABLE TO SELL YOUR SECURITIES AT OR ABOVE THE PRICE THAT YOU
MAY PAY FOR THE SECURITY.

Because of the limited trading market for Momentum's common stock and because of
the possible price volatility, you may not be able to sell your shares of common
stock when you desire to do so. The inability to sell your Securities in a
rapidly declining market may substantially increase your risk of loss because of
such illiquidity and because the price for our shares may suffer greater
declines because of our price volatility.

The price of our common stock that will prevail in the market after this
offering may be higher or lower than the price you may pay. Certain factors,
some of which are beyond our control, that may cause our share price to
fluctuate significantly include, but are not limited to the following:

o Variations in our quarterly operating results;

o Loss of a key relationship or failure to complete
significant transactions;

o Additions or departures of key personnel; and

o Fluctuations in stock market price and volume.

Additionally, in recent years the stock market in general, and the
over-the-counter markets in particular, have experienced extreme price and
volume fluctuations. In some cases, these fluctuations are unrelated or
disproportionate to the operating performance of the underlying company. These
market and industry factors may materially and adversely affect our stock price,
regardless of our operating performance. In the past, class action litigation
often has been brought against companies following periods of volatility in the
market price of those companies common stock. If we become involved in this type
of litigation in the future, it could result in substantial costs and diversion
of management attention and resources, which could have a further negative
effect on your investment in our stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS
- ----------------------------------

Not Applicable.

ITEM 2. PROPERTIES
- ------------------

Corporate Offices

Our headquarters are located in our production plant at 4700 New West Dr.
Pasadena, Texas 77507. The Company leases a 3,661 sq. foot space at 2600 South
Shore Blvd., Suite 100, League City Texas. The lease is for a period of five
years and has an annual rent of approximately $95,000. This space has been
sub-leased on a short term agreement to reduce expenses.

LaPorte Plant

The Company has completed construction of its biodiesel production facility
located in LaPorte, Texas. The production facility is housed in a 14,160 square
foot office/warehouse building. The production facility sits on 8.7 acres of
land. The facility is leased for a period of six years and has an annual rent
and estimated CAM of $217,143.

ITEM 3. LEGAL PROCEEDINGS
- -------------------------

In February 2008, subsequent to the close of the 2007 fiscal year end, Momentum
received notice of its inclusion in a legal complaint filed against Vertex
Energy by Purity Water Company of San Antonio in the Circuit Court of Mobile,
Alabama. The complaint alleges that Vertex, the defendant, contracted with
Purity Water, the plaintiff, to remove water from two million gallons of
Biodiesel stored in Alabama. The complaint further alleged that Vertex engaged
several other companies, including Momentum Biofuels, Inc., as subcontractors to
service the contract.

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

No matters were submitted during the period covered by this report to a vote of
security holders of the Company, through the solicitation of proxies or
otherwise.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
- --------------------------------------------------------------------------------
ISSUER PURCHASES OF EQUITY SECURITIES
- -------------------------------------

Market Information

PRICE RANGE OF COMMON STOCK

The Common Stock is presently traded on the over-the-counter market on the OTC
Bulletin Board maintained by the Financial Industry Regulatory Authority
("FINRA"). The Common Stock of the Company trades on the OTC Bulletin Board
under the trading symbol "MMBF."

The following table sets forth the range of high and low bid quotations for the
common stock of each full quarterly period during the fiscal year or equivalent
period for the fiscal periods indicated below. The quotations were obtained from
information published by the FINRA and reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.

High Low
---- ---
2008 Fiscal Year
----------------
March 31, 2008 $0.99 $0.35
June 30, 2008 $0.88 $0.28
September 30, 2008 $0.70 $0.08
December 31, 2008 $0.35 $0.07

2007 Fiscal Year
----------------
March 31, 2007 $1.65 $1.60
June 30, 2007 $1.62 $1.60
September 30, 2007 $0.80 $0.80
December 31, 2007 $0.65 $0.61
Holders

As of December 31, 2008, there were 393 shareholders of record. There are
beneficial shareholders. In many instances, a registered stockholder is a broker
or other entity holding shares in street name for one or more customers who
beneficially own the shares.

Our transfer agent is Mountain Share Transfer, Inc. 1625 Abilene Drive,
Broomfield, Colorado 80020. The telephone number is 303-460-1149.

Dividend Policy

Holders of Momentum's common stock are entitled to receive such dividends as may
be declared by Momentum's board of directors. The Company has not declared or
paid any dividends on its common shares and it does not plan on declaring any
dividends in the near future. The Company currently intends to use all available
funds to finance the operation and expansion of its business.

Shares Eligible for Future Sale

Momentum currently has 47,724,444 shares of common stock outstanding as of
December 31, 2008. A current shareholder who is an "affiliate" of Momentum,
defined in Rule 144 as a person who directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
Momentum will be required to comply with the resale limitations of Rule 144. Of
these shares a total of 28,800,000 shares have been held for 6 months or more
and are eligible for resale under Rule 144. Sales by affiliates will be subject
to the volume and other limitations of Rule 144, including certain restrictions
regarding the manner of sale, notice requirements, and the availability of
current public information about Momentum. The volume limitations generally
permit an affiliate to sell, within any three month period, a number of shares
that does not exceed the greater of one percent of the outstanding shares of
common stock or the average weekly trading volume during the four calendar weeks
preceding his sale. A person who ceases to be an affiliate at least three months
before the sale of restricted securities beneficially owned for at least two
years may sell the restricted securities under Rule 144 without regard to any of
the Rule 144 limitations.

Recent Sales of Unregistered Securities

During the year ended December 31, 2008, the Company made the following sales of
its unregistered securities.

DATE OF SALE TITLE OF SECURITIES NO. OF SHARES CONSIDERATION CLASS OF PURCHASER
- ---------------------- --------------------- ---------------- ----------------- ---------------------
Part of $600,00
06/25/08 Warrants 600,000 Promissory Note Business Associate

06/25/08 Warrants 300,000 Part of $600,00 Business Associate
Promissory Note

62/25/08 Promissory Note 1,500,000 Promissory Note Business Associate

Exemption From Registration Claimed

All of the sales by Momentum of its unregistered securities were made in
reliance upon Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). The entity listed above that purchased the unregistered securities was an
existing shareholder, known to the Company and its management, through
pre-existing business relationships, as a long standing business associate. The
entity was provided access to all material information, which it requested, and
all information necessary to verify such information and was afforded access to
Momentum's management in connection with the purchases. The purchaser of the
unregistered securities acquired such securities for investment and not with a
view toward distribution, acknowledging such intent to the Company. All
certificates or agreements representing such securities that were issued
contained restrictive legends, prohibiting further transfer of the certificates
or agreements representing such securities, without such securities either being
first registered or otherwise exempt from registration in any further resale or
disposition.

Issuer Purchases of Equity Securities

Momentum did not repurchase any shares of its common stock during the year ended
December 31, 2008.

ITEM 6. SELECTED FINANCIAL DATA
- -------------------------------

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------

FORWARD-LOOKING STATEMENTS CAUTIONARY

This Report on Form 10-K for the year ended December 31, 2008 may contain
"forward-looking statements" regarding Momentum Biofuels, Inc. (the "Company" or
"Momentum"). In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "expects," "plans,"
"intends," "anticipates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of such terms and other comparable terminology. These
forward-looking statements include, without limitation, statements about our
market opportunity, our strategies, competition, expected activities and
expenditures as we pursue our business plan, and the adequacy of our available
cash resources. Although we believe that the expectations reflected in any
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Actual results may differ
materially from the predictions discussed in these forward-looking statements.
Changes in the circumstances upon which we base our predictions and/or
forward-looking statements could materially affect our actual results.
Additional factors that could materially affect these forward-looking statements
and/or predictions include, among other things: (1) our limited operating
history; (2) our ability to pay down existing debt; (3) the Company's ability to
obtain contracts with suppliers of raw materials (for the Company's production
of biodiesel fuel) and distributors of the Company's biodiesel fuel product; (4)
the risks inherent in the mutual performance of such supplier and distributor
contracts (including the Company's production performance (5) the Company's
ability to secure and retain management capable of managing growth; (6) the
Company's ability to raise necessary financing to execute the Company's business
plan; (7) potential litigation with our shareholders, creditors and/or former or
current investors; (8) the Company's ability to comply with all applicable
federal, state and local government and international rules and regulations; and
(9) other factors over which we have little or no control.

The independent registered public accounting firm's report on the Company's
financial statements as of December 31, 2008, includes a "going concern"
explanatory paragraph that describes substantial doubt about the Company's
ability to continue as a going concern.

OPERATIONS

We intend to manufacture high quality biodiesel fuel for sale to local
distributors, jobbers, and state and local government fleets. Biodiesel is a
domestic, renewable fuel for use in diesel engines that is derived from
vegetable oils or animal fats, and can be blended with petroleum-based diesel
fuel for use in existing diesel engines. We derive the biodiesel that we produce
from soybean oil.

During the year ended December 31, 2008, petroleum diesel was as high as $5.10
per gallon and as low as $1.85 per gallon. Biodiesel prices tracked very closely
with this price fluctuation. The raw materials used to produce biodiesel
(feedstock and chemicals) also varied wildly with feedstock being as low as $.15
per pound ($1.15 per gallon) and $.65 per pound ($4.97 per gallon). Chemicals,
such as Methanol, varied similarly in price from $3.00 per gallon to as low as
$.80 per gallon. Federal, state and local mandates were put on hold, temporarily
ignored or postponed while the government and the market sort out the future for
alternative fuels, especially biodiesel.

During 2007, we completed construction of our plant in LaPorte, Texas, have had
limited production. The Company's initial focus has been on and continues to be
on efficiently operating the La Porte plant at its planned capacity and on sales
of our product. Our marketing strategy will focus on wholesale distribution to
fuel jobbers, corporate fleets and government users. We will also use
established alternative fuel brokers where appropriate.

In the continuance of Momentum's business operations it does not intend to
purchase or sell any significant assets and the Company does expect to have to
hire additional employees, if it is able to secure financing or sees an increase
in orders.

The Company is dependent on raising additional equity and/or, debt to fund any
negotiated settlements with its outstanding creditors and meet the Company's
ongoing operating expenses. There is no assurance that Momentum will be able to
raise the necessary equity and/or debt that it will need to be able to negotiate
acceptable settlements with its outstanding creditors or fund its ongoing
operating expenses. Momentum cannot make any assurances that it will be able to
raise funds through such activities.

In addition, the United States and the global business community is experiencing
severe instability in the commercial and investment banking systems which is
likely to continue to have far-reaching effects on the economic activity in the
country for an indeterminable period. The long-term impact on the United States
economy and the Company's operating activities and ability to raise capital
cannot be predicted at this time, but may be substantial.

RESULTS OF OPERATIONS
- ---------------------

For the Year Ended December 31, 2008 Compared to the Year Ended December 31,
2007

The Company recognized revenue of $418,263 for the year ended December 31, 2008,
compared to $702,295 of revenue during the year ended December 31, 2008. The
$283,672 decrease was a result of the rising costs of raw materials and the
decrease in demand for biodieseal.

During the year ended December 31, 2008, the Company incurred $256,265 in cost
of sales, resulting in a gross profit of $161,998 compared to $784,665 in cost
of goods sold; resulting in a gross loss of $82,370 for the year ended December
31, 2007.

During the year ended December 31, 2008, the Company incurred operating expenses
of $4,297,162 compared to $7,561,277 during the year ended December 31, 2007.
The decrease of $3,264,115 was a result of a decrease of $3,160,956 decrease in
share based compensation. Operating expenses during the year ended December 31,
2008 included, $1,463,792 in plant expenses and $2,833,370 in general and
administrative expenses, compared to $1,107,023 in plant expenses and $6,454,254
in administrative expenses for the year ended December 31, 2007.

During the year ended December 31, 2008, the Company incurred net interest
expense of $97,816, compared to $29,990 for the year ended December 31, 2007.

During the year ended December 31, 2008, the Company recognized a net loss of
$4,232,980 compared with a net loss of $7,673,637 for the year ended December
31, 2007. The decrease of $3,440,657 was due primarily to the $3,264,115
decrease in operating expenses offset by a $67,826 increase in net interest
expense combined with the $241,626 increase in gross profits.

The net loss per share for the year ended December 31, 2008, was $0.09 per share
compared to a net loss per share of $0.15 for the year ended December 31, 2007.

LIQUIDITY
- ---------

At December 31, 2008, the Company had $34,559 in cash and $142,364 in total
current assets with which to conduct its operations. Total current assets
consisted of $34,559 in cash, $2,190 in accounts receivable, $73,552 in
inventory and $32,063 in prepaid expenses. At December 31, 2008, total current
liabilities were $1,225,319. At December 31, 2008, the Company has a total
working capital deficit of $1,367,683.

There can be no assurance that the Company will be able to carry out its
business plan. Historically, our cash needs have been satisfied primarily
through proceeds from private placements of our equity securities and debt
instruments, but we cannot guarantee that such financing activities will be
sufficient to fund our current and future projects and our ability to meet our
cash and working capital needs. No commitments to provide additional funds have
been made by management or other stockholders. Irrespective of whether the
Company's cash assets prove to be inadequate to meet the Company's operational
needs, the Company might seek to compensate providers of services by issuances
of its common stock in lieu of cash.

Net cash used in operating activities during the year ended December 31, 2008
was $1,356,657, compared $2,874,569 used in operating activities in the year
ended December 31, 2007. During the year ended December 31, 2008, net losses of
$4,232,980 were adjusted for non-cash items that included $522,781 in
depreciation and amortization expense and $1,518,439 in share based
compensation, other non-cash adjustments totaled $203,448. During the year ended
December 31, 2007, net losses of $7,673,637 were adjusted for the non-cash items
of $277,896 in depreciation and amortization expense, $4,679,395 in share based
compensation, $29,866 in bad debt expense and $18,894 in penalty expenses.

During the year ended December 31, 2008, the Company used $112,726 in cash in
its investing activities. During the year ended December 31, 2008, the Company
sold fixed assets worth $135,000. During the year ended December 31, 2007, the
Company used $954,674 in its investing activities for the acquisition of
property and plant equipment.

Net cash received by financing activities during the year ended December 31,
2008 was $501,319. During the year ended December 31, 2007, the Company received
funds of $4,586,937 from its financing activities.

During the year ended December 31, 2008, the Company sold 200,000 shares of its
restricted common stock for cash of $80,000. The shares were sold for $0.40 per
share.

On January 11, 2008, the Company made final payment on the outstanding $400,000
promissory note held by Ultimate Investment Corp ("Ultimate"). The promissory
note had an issue date of June 30, 2006 and had been accruing interest at a rate
of 12% per annum, at the default rate. The final payment was $319,792, cash,
including accrued interest of $3,901.

On June 25, 2008, the Company closed $600,000 of Senior Secured Convertible
Debt. The notes are held by fourteen different lenders, four of which are
related parties. The note has an issue date of June 25, 2008 and accrues
interest at 10% per annum, payable quarterly. Note holders may at any time
convert the balance of the note into common shares at a conversion price of
$0.40. The notes mature on May 1, 2013.

In addition to the Convertible Notes, the Company has issued Investor Warrants
exercisable for a total of 300,000 shares of the Company's common stock. The
warrants have an exercise price of $0.40 per share and a term of 7 years. The
warrants provide for cashless exercise and have piggy back registration rights.

The Company issued 1 warrant for each $1.00 note sold, to the Placement Agent,
in total 600,000 were issued to the Agent. The warrants have an exercise price
of $0.40 per share and a term of 7 years. The warrants provide for cashless
exercise and have piggy back registration rights.

Management will need to seek and obtain additional funding, via loans or private
placements of stock, for future operations and to provide required working
capital. Management cannot make any assurances it will be able to complete such
a transaction.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES
- ------------------------------------------

The preparation of financial statements included in this Annual Report on Form
10-K requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and
judgments. Management bases its estimates and judgments on historical
experiences and on various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The more significant
accounting estimates inherent in the preparation of the Company's financial
statements include estimates as to the valuation of equity related instruments
issued, and valuation allowance for deferred income tax assets. Our accounting
policies are described in the notes to financial statements included in this
Annual Report on Form 10K. The more critical accounting policies are as
described below.

The Company believes that the following are some of the more significant
accounting policies and methods used by the Company:

o revenue recognition
o allowance for accounts receivable
o value of long-lived assets
o inventories
o share-based compensation

REVENUE RECOGNITION

The Company will recognize revenue when the product has been delivered to the
customer, the sales price is fixed or determinable, and collectability is
reasonably assured.

ALLOWANCE FOR ACCOUNTS RECEIVABLE

Accounts receivable are presented at face value, net of the allowance for
doubtful accounts. The allowance for doubtful accounts is established through
provisions charged against income and is maintained at a level believed adequate
by management to absorb estimated bad debts based on historical experience and
current economic conditions. Management believes all receivables will be
collected and therefore the allowance has been established to be zero at
December 31, 2008.

VALUATION OF LONG-LIVED ASSETS

The Company assesses the impairment of long-lived assets whenever events or
changes in circumstances indicate that the carrying value may not be
recoverable. Factors the Company considers important which could trigger an
impairment review include negative projected operating performance by the
Company and significant negative industry or economic trends. The Company does
not believe that there has been any impairment to long-lived assets as of
December 31, 2008.

INVENTORIES

Inventories are stated at the lower of average cost basis or market. Abnormal
amounts of idle facility expense, freight, handling costs, and wasted materials
(spoilage) are recognized as current-period charges. Fixed production overhead
is allocated to the costs of conversion into inventories based on the normal
capacity of the production facilities.

SHARE-BASED COMPENSATION

Momentum measures all share-based payments, including grants of employee stock
options, using a fair-value based method in accordance with Statement of
Financial Accounting Standards No. 123R, "Share-Based Payments." The cost of
services received in exchange for awards of equity instruments is recognized in
the statement of operations based on the grant date fair value of those awards
amortized over the requisite service period. Momentum utilizes a standard option
pricing model, the Black-Scholes model, to measure the fair value of stock
options granted.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company has reviewed recently issued accounting pronouncements and the
Company does not expect that the adoption of recently issued accounting
pronouncements will have a material impact on its financial position, results of
operations or cash flows

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- -------------------------------------------------------------------

Momentum's operations do not employ financial instruments or derivatives which
are market sensitive. Short term funds are held in non-interest bearing accounts
and funds held for longer periods are placed in interest bearing accounts. Large
amounts of funds, if available, will be distributed among multiple financial
institutions to reduce risk of loss. The Company's cash holdings do not generate
interest income.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------

The audited financial statements of Momentum BioFuels, Inc. for the years ended
December 31, 2008 and 2007, appear as pages F-1 through F-15.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
- --------------------------------------------------------------------------------
FINANCIAL DISCLOSURE
- --------------------

Malone-Bailey, P.C. formerly the independent registered public accountant for
Momentum, was dismissed as the Company's independent registered public
accountant on November 10, 2008.

On November 10, 2008, the Board of the Company approved the engagement of new
auditors, Larry O'Donnell, CPA, PC, of Aurora, Colorado to be the Company's
independent registered public accountant. No audit committee exists, other than
the members of the Board of Directors.

The action to engage new auditors was approved by the Board of Directors. No
audit committee exists, other than the members of the Board of Directors.

In connection with audit of fiscal years ended December 31, 2007 and 2006 and
the cumulative period of January 1, 2008 through June 30, 2008 and through the
date of termination of the accountants, no disagreements exist with the former
independent registered public accountant on any matter of accounting principles
or practices, financial statement disclosure, internal control assessment, or
auditing scope of procedure, which disagreements if not resolved to the
satisfaction of the former accountant would have caused them to make reference
in connection with their report to the subject of the disagreement(s).

The audit report by Malone-Bailey, PC for the fiscal years ended December 31,
2007 and 2006, contained an opinion which included a paragraph discussing
uncertainties related to continuation of the Company as a going concern.

ITEM 9A. CONTROLS AND PROCEDURES
- --------------------------------

Disclosures Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) that are designed to ensure that
information required to be disclosed in our reports under the Exchange Act, is
recorded, processed, summarized and reported within the time periods required
under the SEC's rules and forms and that the information is gathered and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) to allow for timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b), our Chief Executive Officer carried out an
evaluation under the supervision and with the participation of our management,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period
covered by this report. Based on the foregoing evaluation, Mr. Enders concluded
that our disclosure controls and procedures are not effective in timely alerting
them to material information required to be included in our periodic SEC
filings, as a result of material weaknesses in our internal control over
financial reporting discussed below.

ITEM 9A(T). CONTROLS AND PROCEDURES
- -----------------------------------

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with as defined
in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes
those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of our
assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation

(iii)provide reasonable assurance regarding prevention or timely detection of
unauthorized

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

Management's assessment of the effectiveness of the small business issuer's
internal control over financial reporting is as of the year ended December 31,
2008. Based on the evaluation, management concluded that there is a material
weakness in our internal control over financial reporting. The material weakness
relates to the monitoring and review of work performed by contracted accounting
personnel in the preparation of audit and financial statements, footnotes and
financial data provided to Momentum's registered public accounting firm in
connection with the annual audit. Until October 2007, all of our financial
reporting is carried out by our Chief Financial Officer, during the year ended
December 31, 2008, the Company continued to function without a Chief Financial
Officer. This lack of an accounting staff results in a lack of segregation of
duties and accounting technical expertise necessary for an effective system of
internal control.

This annual report does not include an attestation report of the company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by the Company's
registered public accounting firm pursuant to temporary rules of the SEC that
permit the Company to provide only management's report in this annual report.

There was no change in our internal control over financial reporting that
occurred during the fiscal quarter ended December 31, 2008, that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

ITEM 9B. OTHER INFORMATION
- --------------------------

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
- ---------------------------------------------------------------

The following table sets forth information as to persons who currently serve as
Momentum BioFuels, Inc. directors or executive officers, including their ages as
of December 31, 2008.

Name Age Position
- ---------------------------- ------------------------- -------------------------
Gregory A. Enders 54 Chief Executive Officer
and Director
Gary Johnson 52 Chief Operating Officer
Richard C. Cilento* 47 Director
David M. Fick 56 Director
Jeffrey P. Ploen 57 Director
Richard A. Robert** 43 Director

*Mr. Cilento resigned as a director of Momentum on February 2, 2009.
**Mr. Roberts resigned as a director of Momentum on March 25, 2009.

Momentum's directors serve an annual term.

The directors named above will serve until the next annual meeting of Momentum's
stockholders. Thereafter, directors will be elected for one-year terms at the
annual stockholders' meeting. Officers will hold their positions at the pleasure
of the board of directors absent any employment agreement. There is no
arrangement or understanding between the directors and officers of Momentum and
any other person pursuant to which any director or officer was or is to be
selected as a director or officer.

Biographical Information

GREGORY A. ENDERS (54). Mr. Enders has served as the Chief Executive Officer and
a Director of the Company since October 20, 2007. Mr. Enders has served as Chief
Executive Officer of several public and private companies including Stratasoft,
Inc., Commerciant Holdings, Inc., Intermat, Inc., Strategic Distribution, MRO
Software, Inc., Integration Systems, Inc. (d/b/a Bizmart Computer Super Centers)
and Computer Productivity, Inc. Most of these companies have been involved in
existing and emerging technologies and have included high volume hardware sales,
technology development, professional skills training, communications and
electronics. For 15 years, he has simultaneously served as Chairman and CEO of
Enders Racing, LLC, a motorsports marketing and competition company to operate
an NHRA Pro Stock Championship Drag Racing Team. This team was the subject of
the Disney Movie, "Right on Track". In addition, Mr. Enders has served as
President and CEO of GEAM, Inc., an acquisitions and management company
established for the purpose of consulting in the areas of business acquisitions,
financial restructuring, strategic planning and implementation of client
companies. Mr. Enders served in the United States Air Force (both active duty
and reserves) from 1972 - 1978. From 2002 until August of this 2007 Mr. Enders
served on the Development Board of Texas A&M's Mays Business School.

GARY A. JOHNSON (52). Mr. Johnson has served as the Chief Operating Officer of
the Company since October 16, 2007. Mr. Johnson has over 20 years of executive
level management experience delivering products, services and solutions to
Global 2000 clients. Prior to joining Momentum, Mr. Johnson served as Vice
President of Operations for Stratasoft, Inc., President of IHS-Intermat
Solutions, Vice President of Operations with MRO Software and Vice President and
General Manager of Integration Systems, Inc. Mr. Johnson gained extensive
experience in transition management through several mergers, acquisitions, joint
ventures and MBO/LBO's while associated with these firms. Prior to these
corporate positions, Mr. Johnson served in various capacities with several rapid
growth emerging technologies based companies. Mr. Johnson attended the
University of Houston.

DAVID M. FICK. Mr. Fick has served as a director of the Company since October 9,
2007. Mr. Fick has participated as an active investor and entrepreneur in
numerous projects involving wind, biodiesel, ethanol, and farm related
businesses. Mr. Fick is currently President of several investment funds working
with value added ventures for farming. He owns and operates a farm implement
business that sells over 50 manufacturer lines. He is a past board member of
Badger State Ethanol. Mr. Fick and his family have been a part of the farming
community in Minnesota and South Dakota for almost 40 years including interests
in dairy, corn, beets, soybeans and alfalfa. He has served in the National Guard
and has held multiple leadership roles with local farm organizations, civic
organizations and his church.

JEFFREY PLOEN. Mr. Ploen was re-elected to the Board of Directors in October
2006. Mr. Ploen has served as a director of the Company since July 2004. He
served as the acting Chief Executive Officer and acting Chief Financial Officer
of the Company until June 2006. He has been a member of the investment banking
industry for over 25 years specializing in small or micro cap firms. He is a
founding partner and is currently the CEO and Chairman of the Board of Iofina
Natural Gas PLC. He served as the former Chairman, President and CEO of Tonga
Capital Corp. He was the former Chairman and CEO of Paradigm Holdings, Inc. He
is the former hedge fund manager of the Olive Fund LLC. Mr. Ploen held positions
with several small cap brokerage houses from 1972 through 1994 including Engler
and Budd, Cohig and Associates, Neidiger, Tucker and Brunner and Institutional
Securities, Inc. For the past ten years Mr. Ploen has been President of J. Paul
Consulting Corp., a firm specializing in financing for small and micro cap
firms.

RICHARD C. CILENTO. Mr. Cilento has served as a director of the Company from
2006 till February 2, 2009. He is currently the President, Chief Executive
Officer and Founder of FuelQuest, Inc. FuelQuest provides on-demand supply chain
management and tax automation software and services for suppliers, distributors,
fuel buyers, and traders in Global Downstream Energy. Mr. Cilento brought a
broad scope of experience in technology, operations and business development
this role as President and Chief Executive Officer of FuelQuest. He is a
co-founder of The Bollard Group, which provides investment banking services to
petroleum distribution companies and other high-growth business ventures. Prior
to co-founding The Bollard Group, he held senior-management positions with
several technology firms, including Xerox Corp, where he served as Vice
President of Strategic Services. Prior to that, he was the Vice President of
Corporate Services for XLConnect Solutions, where he served as the lead
technologist for advanced systems and managed the organization through its
Initial Public Offering and its eventual merger with Xerox, forming Xerox
Connect Solutions. Mr. Cilento began his career at NASA, where he and his team
were responsible for redesigning NASA's Mission Control Center and implementing
NASA's Software Management Plan. He holds a BS degree in Aeronautical and
Astronomical Engineering from the University of Illinois, an MBA at the
University of Houston and serves on the advisory boards for several
internet-based companies.

RICHARD A. ROBERT. Mr. Robert resigned as a director of the Company on March 25,
2009. He is a financial executive with expertise in acquisitions, divestitures,
economic analysis, capital formation via debt and equity markets, and financial
risk management. Through the course of his career he has dealt extensively with
Wall Street analysts, investment bankers, and commercial bankers. He is
currently the Executive Vice-President and Chief Financial Officer of Vanguard
Natural Resources, LLC which is a publicly traded natural gas and oil production
company focused on the development and exploitation of mature long-lived natural
gas and oil reserves in the Appalachian and Permian basins. He served as the
Interim Chief Financial Officer of Massey Energy Company ("Massey") which is the
fourth largest coal company in the United States. Mr. Robert was the Vice
President of Finance of Enbridge US, Inc. ("Enbridge") after Enbridge's
acquisition of Midcoast Energy Resources, Inc. (`Midcoast"). Enbridge is a
multibillion-dollar energy company based in Calgary, Alberta. Mr. Robert served
as the Chief Financial Officer and Treasurer of Midcoast. Midcoast was a
growth-oriented energy company engaged in the transportation, gathering,
processing, and marketing of natural gas and other petroleum products. He was
hired as the first employee of the company and helped the company grow from
infancy to approximately $1 billion in sales and 330 employees in Canada and the
United States. Mr. Robert began his career with Arthur Andersen, LLP as an
energy auditor. He holds a BBA from Southwest Texas State University with a
Concentration in Accounting.

Committees of the Board of Directors

Momentum is managed under the direction of its board of directors.

Executive Committee

Momentum does not have an executive committee, at this time.

Audit Committee

Momentum does not have an audit committee at this time.

Conflicts of Interest - General.

The Company's directors and officers are, or may become, in their individual
capacities, officers, directors, controlling shareholder and/or partners of
other entities engaged in a variety of businesses. Thus, there exist potential
conflicts of interest including, among other things, time, efforts and
corporation opportunity, involved in participation with such other business
entities.

Conflicts of Interest - Corporate Opportunities

Presently no requirement contained in the Company's Articles of Incorporation,
Bylaws, or minutes which requires officers and directors of the Company's
business to disclose to Momentum business opportunities which come to their
attention. The Company's officers and directors do, however, have a fiduciary
duty of loyalty to Momentum to disclose to it any business opportunities which
come to their attention, in their capacity as an officer and/or director or
otherwise. Excluded from this duty would be opportunities which the person
learns about through his involvement as an officer and director of another
company. The Company has no intention of merging with or acquiring an affiliate,
associate person or business opportunity from any affiliate or any client of any
such person.

ITEM 11. EXECUTIVE COMPENSATION
- -------------------------------

The following table sets forth the compensation paid to officers and board
members during the fiscal years ended December 31, 2008, 2007 and 2006. The
table sets forth this information for Garner Investments, Inc., including
salary, bonus, and certain other compensation to the Board members and named
executive officers for the past three fiscal years and includes all Board
Members and Officers as of December 31, 2008.

SUMMARY EXECUTIVES COMPENSATION TABLE

Non-equity Non-qualified
incentive deferred
Stock Option plan compensation All other
Salary Bonus awards awards compensation earnings compen-sation Total
Name & Position Year ($) ($) ($) ($) ($) ($) ($) ($)
- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------

- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------
Gregory A. Enders, 2008 122.170 0 0 0 0 0 0 122.170
CEO (1) 2007 45,000 0 0 3,313,565 0 0 0 3,358,565
2006 0 0 0 0 0 0 0 0
- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------

- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------
Barent W. Carter 2008 0 0 0 0 0 0 0 0
2007 0 0 0 1,952,764 0 0 0 1,952,764
2006 0 0 0 0 0 0 0 0
- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------

- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------
Stuart Carter (3) 2008 0 0 0 0 0 0 7,500 7,500
2007 132,083 0 0 607,910 0 0 75,000 814,993
2006 0 0 0 0 0 0 0 0
- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------

- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------
Charles T.Phillips 2008 0 0 0 0 0 0 0 0
2007 0 0 0 0 0 0 0 0
2006 60,000 0 0 0 0 0 80,000 140,000
- -------------------- -------- --------- -------- -------- --------- ------------- -------------- ----------- ----------

(1) Mr. Enders was appointed the Chief Executive Officer on October 20, 2007.
Mr. Enders received $122,170 in salary in 2008, regular salary payments under
his employment agreement were discontinued by the Company in July 2007. Mr.
Ender's employment agreement states he receives an annual salary of $216,000. In
addition in 2007, he received an option exercisable for 5,000,000 shares which
vests over a three year period and was valued using the Black-Scholes model at
$3,313,565.

(2) Mr. Barent Cater served as our Chief Executive Officer from March 1, 2007
through October 9, 2007. During 2007, Mr. Cater worked without receiving a
salary. He was awarded 5,000,000 options as part of his employment contract.
Upon his separation he forfeited 3,500,000 options.

(3) Mr. Stuart Cater served as our Chief Financial Officer from March 1, 2007
through October 10, 2007. He was awarded 2,000,000 options as part of his
employment contract. Upon his separation he forfeited 1,625,000 options. As part
of a separation agreement Mr. Cater will receive $150,000, of which $60,000 was
paid upon execution of the agreement, the balance paid in twelve monthly
installments of $7,500, starting November 15, 2007. The Company was unable to
continue payments and entered into a settlement agreement to be funded as cash
allows.

(4) Mr. Phillips served as the President and Chief Executive Officer from June
2006 through February 2007. The $80,000 in other compensation includes $50,000
in consulting fees.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
--------------------------------------------

The following table sets forth certain information concerning outstanding equity
awards held by the President and the Company's most highly compensated executive
officers for the fiscal year ended December 31, 2008 (the "Named Executive
Officers"):

Option Awards Stock awards
- ------------- ------------------------------------------------------------- ---------------------------------------
Equity
incentive
Equity plan
incentive Equity awards:
plan incentive Market
awards: plan or
Number of Number of Number of Number Market awards: payout
securities securities securities of value Number value of
underlying underlying underlying shares of of unearned
unexercised unexercised unexercised Option Option or shares unearned shares,
options options (#) unearned exercise expiration units of shares, units or
Name (#) unexercisable options price date of units units or others
exercisable (#) ($) stock of other rights
that stock rights that
have that that have not
not have have not vested
vested not vested ($)
(#) vested (#)
($)

- ------------- ------------ ------------- ------------- -------- ----------- -------- -------- ---------- ----------
Gregory A. 0 5,000,000 0 1.00 10/16/12 0 0 0 0
- ------------- ------------ ------------- ------------- -------- ----------- -------- -------- ---------- ----------

(1) Mr. Enders was appointed the Chief Executive Officer on October 20, 2007.
Mr. Ender's employment agreement states he receives 5,000,000 options vested
over three years.

OPTION/SAR GRANTS IN THE LAST FISCAL YEAR

During the year ended December 31, 2008, Momentum created the Momentum 2008
Stock Option and Award Plan. There was no grant of stock options to the Chief
Executive Officer and other named executive officers during the fiscal year
ended December 31, 2008.

Employment Agreements and Termination of Employment and Change-In-Control
Arrangements

Ender's Employment Agreement

On October 16, 2007, Momentum entered into an Employment Agreement with Mr.
Gregory A. Enders, the Chef Executive Officer and President. The Employment
Agreement has a term of 3 years and provides for an automatic renewal for 1 year
terms. The Employment Agreement can be terminated by either party at an earlier
date. As part of the Employment Agreement, Mr. Enders receives an annual base
salary of $216,000 per year. If business objectives set by the Board of
Directors and Mr. Enders are met after a period of six months, Mr. Enders is to
receive an additional $2,000 per month. Mr. Ender's salary is subject to annual
review by the Board of Directors. In July 2008, the Company discontinued regular
salary payments under the Employment Agreement.

As part of his Employment Agreement, Mr. Enders was issued an option exercisable
for 5,000,000 shares of common stock. The option has an exercise price of $1.00
per share and a term of 3 years. The option vests at a rate of 1,250,000 shares
in six months from the date of issuance, 1,250,000 shares in twelve months from
the date of issuance, 1,250,000 shares on the second anniversary of issuance and
1,250,000 shares on the third anniversary of issuance.

Director Compensation

The Company does not pay any Directors fees for meeting attendance.

The following table sets forth certain information concerning compensation paid
to the Company's directors during the year ended December 31, 2008:

Non-qualified
Non-equity deferred
Fees incentive compensation All other
earned or Stock Option plan earnings compensation Total
Name paid in awards ($) awards ($) compensation ($) ($) ($)
cash ($)
($)
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------
Gregory A. $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------
Robert $ -0- $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------
Richard $ -0- $ -0- $-0- $ -0- $-0- $ -0- $ -0-
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------
Jeffrey A. $ -0- $ -0- $-0- $ -0- $-0- $ -0- $ -0-
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------
David Fick $ -0- $ -0- $-0- $ -0- $-0- $ -0- $ -0-
- -------------- ----------- ----------- ----------- --------------- ---------------- --------------- ---------

All of the Company's officers and/or directors will continue to be active in
other companies. All officers and directors have retained the right to conduct
their own independent business interests.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Momentum's officers and directors are indemnified as provided by the Colorado
Revised Statutes and the bylaws.

Under the Colorado Revised Statutes, director immunity from liability to a
company or its shareholders for monetary liabilities applies automatically
unless it is specifically limited by a company's Articles of Incorporation. The
Company's Articles of Incorporation do not specifically limit the directors'
immunity. Excepted from that immunity are: (a) a willful failure to deal fairly
with Momentum's or its shareholders in connection with a matter in which the
director has a material conflict of interest; (b) a violation of criminal law,
unless the director had reasonable cause to believe that his or her conduct was
lawful or no reasonable cause to believe that his or her conduct was unlawful;
(c) a transaction from which the director derived an improper personal profit;
and (d) willful misconduct.

The Company's bylaws provide that it will indemnify the directors to the fullest
extent not prohibited by Colorado law; provided, however, that it may modify the
extent of such indemnification by individual contracts with the directors and
officers; and, provided, further, that the Company shall not be required to
indemnify any director or officer in connection with any proceeding, or part
thereof, initiated by such person unless such indemnification: (a) is expressly
required to be made by law, (b) the proceeding was authorized by the board of
directors, (c) is provided by the Company, in sole discretion, pursuant to the
powers vested under Colorado law or (d) is required to be made pursuant to the
bylaws.

The Company's bylaws provide that it will advance to 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, by reason of the fact that he is or was a director or officer of
the Company, or is or was serving at the request of Garner Investments as a
director or executive officer of another company, partnership, joint venture,
trust or other enterprise, prior to the final disposition of the proceeding,
promptly following request therefore, all expenses incurred by any director or
officer in connection with such proceeding upon receipt of an undertaking by or
on behalf of such person to repay said amounts if it should be determined
ultimately that such person is not entitled to be indemnified under the bylaws
or otherwise.

EQUITY COMPENSATION PLAN INFORMATION

The Company has not established an equity compensation plan or Incentive Stock
Option Plan.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
- --------------------------------------------------------------------------------
RELATED STOCKHOLDER MATTERS.
- ---------------------------

The following table sets forth information with respect to the beneficial
ownership of Garner Investments, Inc. outstanding common stock by:

o each person who is known by Momentum to be the beneficial owner of five
percent (5%) or more of Momentum's common stock;

o Momentum's chief executive officer, its other executive officers, and each
director as identified in the "Management -- Executive Compensation"
section; and

o all of the Company's directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock and options, warrants
and convertible securities that are currently exercisable or convertible within
60 days of the date of this document into shares of the Company's common stock
are deemed to be outstanding and to be beneficially owned by the person holding
the options, warrants or convertible securities for the purpose of computing the
percentage ownership of the person, but are not treated as outstanding for the
purpose of computing the percentage ownership of any other person.

The information below is based on the number of shares of Momentum BioFuels,
Inc.'s common stock that Momentum believes was beneficially owned by each person
or entity as of December 31, 2008.

Title of Class Name and Address of Amount and Nature Percent of Class
Beneficial Owner of Beneficial (1)
Owner*
- -------------------- -------------------------- ------------------- --------------------
Common shares Gregory Enders (2) 1,000,000 1.65%
Common shares Charles T. Phillips 8,000,000 13.22%
Common shares Donald Gunghaim 4,800,000 7.93%
Common shares Coastal Safety and 7,000,000 11.57%
Common shares Richard Cilento (3) 2,700,000 4.46%
Common shares J. Paul Consulting Corp 3,000,000 4.96%
Common shares Richard A. Robert (5) 300,000 0.50%
Common shares TES Energy Partner (6) 3,000,000 4.96%

- -------------------- -------------------------- ------------------- --------------------
Common shares All Directors and
Executive Officers as a 7,000,000
Group ( persons) 11.57%
- -------------------- -------------------------- ------------------- --------------------

(1) Based upon 47,724,444 shares of common stock issued and outstanding, options
exercisable for 9,250,000 shares of common stock and warrants exercisable for
3,532,000 shares of common stock for 60,506,444 shares on a fully diluted basis
on December 31, 2008.

(2) Mr. Enders owns 1,000,000 shares of restricted common stock and an option to
purchase 5,000,000 shares from the Company over the next three years.

(3) Mr. Cilento owns 300,000 shares of restricted common stock. Mr. Cilento
resigned as a director of the Company on February 2, 2009.

(4) Jeff Ploen, Director, beneficially owns J. Paul Consulting Corp. which owns
2,000,000 shares of common stock. Mr. Ploen directly owns 1,000,000 common
shares. His direct ownership and beneficially ownership are shown combined in
this table.

(5) Mr. Robert owns 300,000 shares of restricted common stock. Mr. Roberts
resigned as a director of the Company on March 25, 2009.

(6) David Fick, a director of the Company, is President of TES Energy Partners
and substantially owns shares through the partnership. Mr. Fick votes the TES
Energy Partner shares.

Rule 13d-3 under the Securities Exchange Act of 1934 governs the determination
of beneficial ownership of securities. That rule provides that a beneficial
owner of a security includes any person who directly or indirectly has or shares
voting power and/or investment power with respect to such security. Rule 13d-3
also provides that a beneficial owner of a security includes any person who has
the right to acquire beneficial ownership of such security within sixty days,
including through the exercise of any option, warrant or conversion of a
security. Any securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the class owned by such
person. Those securities are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person. Included in
this table are only those derivative securities with exercise prices that Garner
Investments believes have a reasonable likelihood of being "in the money" within
the next sixty days.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------

Other than the stock transactions discussed below, the Company has not entered
into any transaction nor is there any proposed transactions in which any of the
founders, directors, executive officers, shareholders or any members of the
immediate family of any of the foregoing had or is to have a direct or indirect
material interest.

Year Ended December 31, 2008
- ----------------------------

During the year ended December 31, 2008, there were no related party
transactions.

Year Ended December 31, 2007
- ----------------------------

Ender's Employment Agreement

Separation Agreements

Mr. Barent Cater, served as a the Chief Executive Office and a director of
Momentum. In May 2007, he signed an Employment Agreement with the Momentum. On
October 9, 2007, he resigned his positions with the Momentum and on October 16,
2007 he entered into a Separation Agreement with Momentum. The Separation
Agreement provided that Mr. Barent Cater received cash of $72,095 as payment in
full of a promissory note held by him. In addition he received a reimbursement
of $15,000 for legal expenses that he incurred in connection with his employment
agreement.

Mr. Barent Cater was issued an option exercisable for 1,500,000 shares of the
Company.

Mr. Stuart Cater, served as Chief Financial Officer of Momentum. In May 2007, he
signed an Employment Agreement with Momentum and on October 19, 2007 he resigned
his position. He entered into a Separation Agreement with Momentum that provides
for him to receive a severance payment of $60,000 and a monthly payment of
$7,500 for 12 months. In addition, the 2,00,000 options granted for shares of
the Company, 1,625,000 were cancelled. The remaining 375,000 were fully vested
and exercisable immediately.

Mr. Gary Johnson, an officer of the Company, has an option to purchase 1,000,000
shares from the Company over the next three years, in connection with his
employment agreement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
- -----------------------------------------------

GENERAL. Larry O'Donnell, CPA, P.C. ("O'Donnell") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services is compatible with maintaining
O'Donnell's independence. Prior to November 10, 2008, Malone and Bailey served
as our principal auditing accountant firm.

The following table represents aggregate fees billed to the Company for the
years ended December 31, 2008 and December 31, 2007..

Year Ended December 31,
2008 2007
----------------------------- ----------------------------
Audit Fees $73,325 $61,594

Audit-related Fees $0 $0

Tax Fees $0 $0

All Other Fees $0 $0

----------------------------- ----------------------------
Total Fees $73,325 $61,594

All audit work was performed by the auditors' full time employees.

* During the year ended December 31, 2008, audit fees of $49,775 were paid to
Malone and Bailey and fees of $0_ were paid to Larry O'Donnell, CPA, PC.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following is a complete list of exhibits filed as part of this Form 10K.
Exhibit number corresponds to the numbers in the Exhibit table of Item 601 of
Regulation S-K.

(a) Audited financial statements for years ended December 31, 2008 and 2007

(b) Exhibit No. Description
----------- -----------
31.1 Certification of Chief Executive Officer pursuant
to Section 302 of the

32.1 Certification of Principal Executive Officer pursuant
to Section 906 of the

*Filed herewith.

Larry O'Donnell, CPA, P.C.
Telephone (303) 745-4545
Street
Fax (303)369-9384 2228 South Fraser
Unit I
Email larryodonnellcpa@msn.com Aurora, Colorado 80014
www.larryodonnellcpa.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Momentum Biofuels, Inc.

I have audited the accompanying balance sheet of Momentum Biofuels, Inc. as of
December 31, 2008, and the related statements of operations, changes in
stockholders' deficit and cash flows for each year then ended. These financial
statements are the responsibility of the Company's management. My responsibility
is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audits provide a reasonable
basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Momentum Biofuels, Inc. as of
December 31, 2008, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles in
the United States of America.

The accompanying financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has an
accumulated deficit of $13,185,236 at December 31, 2008. Additionally, for the
year ended December 31, 2008, the Company had a net loss of $4,232,980. These
matters raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regards to these matters are also described
in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/Larry O'Donnell, CPA, PC
- ---------------------------
Larry O'Donnell, CPA, PC
March 25, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors
Momentum Biofuels, Inc. (formerly Tonga Capital Corporation)
Houston, Texas

We have audited the accompanying consolidated balance sheets of Momentum
Biofuels, Inc. (the "Company") as of December 31, 2007 and 2006, and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for the year ended December 31, 2007 and period from inception (May 8,
2006) to December 31, 2006. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Momentum Biofuels, Inc. as of
December 31, 2007 and 2006, and the results of its operations and its cash flows
for the periods described in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has suffered recurring losses from operations,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans regarding these matters also are described in Note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Malone & Bailey, PC
- -----------------------
Malone & Bailey, PC
www.malone-bailey.com
Houston, Texas

April 11, 2008

MOMENTUM BIOFUELS, INC.
Consolidated Balance Sheets
December 31, 2008 & 2007

2008 2007
------------------------------------
ASSETS
Current Assets
Cash $ 34,559 $ 777,171
Accounts Receivable, net 2,190 3,859
Inventory 73,552 56,759
Prepaid insurance 32,063 33,766
----------------- ----------------
Total current assets 142,364 871,555

Property & equipment, net of accumulated
depreciation and amortization 2,617,902 3,253,410
Other Assets 327,469 26,278
----------------- ----------------
TOTAL ASSETS $ 3,087,735 $ 4,151,243
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 569,779 $ 194,226
Accrued expenses 491,330 191,942
Advances - related parties 14,210 -
Loan payable 150,000
Short term notes payable - related parties 315,891
----------------- ----------------
Total Current Liabilities 1,225,319 702,059
----------------- ----------------

Long Term Liabilities
Convertible notes payable - net of discount - related parties 53,318 -
Senior secured convertible note - net of discount 217,608 -
----------------- ----------------

Total Long Term Liabilities 270,926 -
------------------------------------
Total Liabilities 1,496,245 702,059
----------------- ----------------
Stockholders' Equity

Common stock, $0.01 par value;
500,000,000 shares authorized,
47,724,444 and 54,828,756 shares
issued and outstanding on December 31,
2008 and 2007, respectively

Additional paid-in capital 14,299,482 11,853,153
Accumulated Deficit (13,185,236) (8,952,256)
----------------- ----------------
Total Stockholders' Equity 1,591,490 3,449,184
----------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,087,735 $ 4,151,243
================= ================

See the accompanying notes to the consolidated financial statements.

F-2

MOMENTUM BIOFUELS, INC.
Consolidated Statements of Operations
For the Years Ended December 31, 2008 & 2007

2008 2007
---- ----
Revenue $ 418,263 $ 702,295
Cost of goods sold 256,265 784,665
---------------- ----------------
Gross profit 161,998 (82,370)

Operating Expenses
Plant expenses 1,463,792 1,107,023
General and administrative 2,833,370 6,454,254
---------------- ----------------
Total Operating Expenses 4,297,162 7,561,277
---------------- ----------------
Loss from operations (4,135,164) (7,643,647)
---------------- ----------------

Other Income (Expense)
Interest income 1,311 26,809
Interest expense (99,127) (56,799)
---------------- ----------------
Total Other Income (Expense) (97,816) (29,990)
---------------- ----------------
Net Loss (4,232,980) (7,673,637)
================ ================

Per Share Information:
Weighted average number of common shares outstanding Basic and
Diluted 48,559,181 52,058,245
================ ================
Net Loss per Share $ (0.09) $ (0.15)
================ ================

See the accompanying notes to the consolidated financial statements.

F-3

MOMENTUM BIOFUELS, INC.
Consolidated Statement of Stockholders' Equity For the Period from January 1,
2007 through December 31, 2008

Common Stock Additional Accumulated
Shares Amount Paid-In Deficit
Capital Totals
--------------- -------------- --------------- ----------------- ---------------

Balance - January 1, 2007 49,166,514 $ 491,665 $ 1,655,106 $ (1,278,619) $ 868,152
Shares issued in private
placement for cash 5,111,500 51,115 4,988,417 - 5,039,532

Note Conversion 500,000 5,000 500,000 - 505,000

Conversion of interest on note 35,742 357 30,385 - 30,742
Directors stock based on
compensation - - 450,000 - 450,000

Shares issued for services 15,000 150 14,850 - 15,000

Warrants issued for services - - 655,886 - 655,886

Employee stock option compensation - - 3,558,509 - 3,558,509

Net loss - - - (7,673,637) (7,673,637)
--------------- -------------- --------------- ----------------- ---------------
Balance - December 31, 2007 54,828,756 $ 548,287 $ 11,853,153 $ (8,952,256) $3,449,184
--------------- -------------- --------------- ----------------- ---------------
Cancelled shares (7,500,000) (75,000) 75,000 - -
Shares issued in private placement
for cash 200,000 2,000 78,000 - 80,000

Share based compensation 195,688 1,957 1,604,840 - 1,606,797

Debt Discount - - 389,518 - 389,518

Warrants issued for services - - 298,971 - 298,971

Net loss - - - (4,232,980) (4,232,980)
--------------- -------------- --------------- ----------------- ---------------
Balance - December 31, 2008 47,724,444 $ 477,244 $ 14,299,482 $ (13,185,236) $1,591,490
=============== ============== =============== ================= ===============

See the accompanying notes to the consolidated financial statements.

F-4

MOMENTUM BIOFUELS, INC.
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2008 & 2007

2008 2007
----------------- ------------------
Cash Flows from Operating Activities
Net loss $ (4,232,980) $ (7,673,637)
Adjustments to reconcile net loss to cash used in
operating activities
Depreciation 522,781 277,896
Bad debt expense 29,866 29,866
Penalty for failure to register shares - 18,894
Deferred loan cost expense 39,780 -
Interest expense - amortization of debt discount 45,444 -
Share based compensation 1,518,439 4,679,395
Shares issued for service 88,358 -

Changes in Assets and Liabilities
Accounts receivable (28,197) (33,725)
Inventory (16,793) (56,759)
Prepaid expenses and other current assets 1,703 5,531
Accounts payable 375,553 (293,073)
Accrued expenses 299,389 171,043
----------------- ------------------
Net Cash Used in Operating Activities (1,356,657) (2,874,569)

Cash Flows used in Investing Activities
Acquisition of fixed assets (22,274) (954,674)
Sale of fixed assets 135,000 -
----------------- ------------------
Net Cash Used in Investing Activities 112,726 (954,674)

Cash Flows from Financing Activities
Payment of note payable (315,891) (501,435)
Loans from shareholders 14,210 67,736
Stock issued for cash 80,000 5,111,500
Offering costs (42,000) (90,864)
Proceeds from loan payable 150,000 -
Proceeds from convertible notes 615,000 -
----------------- ------------------
Net Cash Provided (Used) by Financing Activities 501,319 4,586,937
----------------- ------------------

Net (Decrease) increase in Cash (742,612) 757,694

Cash and cash equivalents - Beginning of period 777,171 19,477
----------------- ------------------
Cash and cash equivalents - End of period $ 34,559 $ 777,171
================= ==================

Supplemental Disclosure of Cash Flow Information:
Cash Paid During the period for:
Interest $ 28,513 $ 53,580
================= ==================
Income Taxes $ - $ -
================= ==================
Non-Cash Transactions - Investing activities:
Stock issued for services $ 88,358 $ -
================= ==================
Warrants issued for services $ 298,971 $ -
================= ==================
Capitalized interest during construction period $ - $ -
================= ==================
Financing activities
Cancellation of common shares $ 75,000 $ -
================= ==================
Note payable converted to stock $ - $ 500,000
================= ==================

See the accompanying notes to the consolidated financial statements.

F-5

Momentum Biofuels, Inc.
Notes to Consolidated Financial Statements
December 31, 2008

Note 1 - Organization and Nature of Operations

Tonga Capital Corporation was incorporated on January 29, 1987, in Colorado, and
was been a non-operating entity classified as a shell company under Rule 12b-2
of the Securities Exchange Act of 1934. Momentum Biofuels, Inc. was incorporated
in Texas on May 8, 2006, and was to engage in the business of the production of
biodiesel fuel. On May 31, 2006, Tonga Capital Corporation (Tonga), a Colorado
Corporation, signed an Agreement and Plan of Reorganization with Momentum
Biofuels, Inc. The shareholders of Momentum Biofuels, Inc. received 39,275,000
shares of common stock of Tonga in exchange for 39,275,000 shares of Momentum
Biofuels, Inc. This transaction was accounted for as a reverse merger with
Momentum Biofuels, Inc. being treated as the accounting acquirer.

On October 10, 2007, at the Annual Shareholders' Meeting, the majority of the
shareholders approved a resolution to change Tonga's name to Momentum Biofuels,
Inc. (Momentum).

Our business purpose is to manufacture high quality biodiesel fuel for sale to
local distributors, jobbers, and state and local government fleets.

Note 2 - Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Momentum and its wholly- owned subsidiary. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities and the reported amounts of
revenues and expenses during the reporting period. Our significant estimates
primarily relate to the assessment of warrants and debt and equity transactions
and the estimated lives and methods used in determining depreciation of fixed
assets. Actual results could differ from those estimates.

Cash Equivalents

Cash equivalents include highly liquid investments purchased with original
maturities of three months or less.

Accounts Receivable

F-6

Inventories

Property and Equipment

Property and equipment are recorded at cost. Depreciation and amortization are
computed using the straight-line method for financial reporting purposes at
rates based on the following estimated useful lives:

Description Life
- ---------------------------------------------------------------- ----------

Office equipment, furniture and fixtures 5 years
Computer equipment and software 3 years
Plant equipment 7 years
Leasehold improvements 5-6 years

The cost of asset additions and improvements that extend the useful lives of
property and equipment are capitalized. Routine maintenance and repair items are
charged to current operations. The original cost and accumulated depreciation of
asset dispositions are removed from the accounts and any gain or loss is
reflected in the statement of operations in the period of disposition.

In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," management reviews long-lived asset groups for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset group may not be recoverable. Recoverability of asset groups to be held
and used is measured by a comparison of the carrying amount of an asset group to
future net cash flows expected to be generated by the asset group. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the asset group exceeds
the fair value of the assets in the group. Assets to be disposed of are reported
at the lower of the carrying amount or fair value less costs to sell.

Assets Being Developed for Our Own Use

Assets being developed for our own use are stated at cost, which includes the
cost of construction and other direct costs attributable to the construction. No
provision for depreciation is made on assets developed for our own use until
such time as the relevant assets are completed and put into service.

Revenue Recognition

Momentum recognizes revenue from product sales when the products are shipped or
delivered and the title and risk pass to the customer. Provisions for any
product returns or discounts given to customers are accounted for as reductions
in revenues in the same period revenues are recorded.

Share-Based Compensation

F-7

Income Taxes

Momentum and its subsidiary file a consolidated federal tax return. Momentum
uses the asset and liability method in accounting for income taxes. Deferred tax
assets and liabilities are recognized for temporary differences between the
financial statement carrying amounts and the tax bases of assets and
liabilities, and are measured using the tax rates expected to be in effect when
the differences reverse. Deferred tax assets are also recognized for operating
loss and tax credit carryforwards. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the results of operations
in the period that includes the enactment date. A valuation allowance is used to
reduce deferred tax assets when uncertainty exists regarding their realization.

Net Loss per Common Share

Basic net loss per common share is calculated by dividing the net loss
applicable to common shares by the weighted average number of common and common
equivalent shares outstanding during the period. For the years ended December
31, 2008 and 2007, there were no potential common equivalent shares used in the
calculation of weighted average common shares outstanding as the effect would be
anti-dilutive because of the net loss.

Description 2008 2007
- ---------------------------------------------------------------------------------------------- -------------------
Weighted average shares used to compute basic and
diluted net loss per common share: 48,559,181 52,058,245

Securities convertible into shares of common stock, not used
Stock warrants related to notes payable 120,000
Stock warrants for common stock 2,062,000 1,162,000
Options awarded to executives and consultants 9,250,000 10,300,000
------------------- -------------------

Total securities convertible into shares of common stock 11,582,000 11,582,000
=================== ===================

Recent Accounting Pronouncements

Momentum does not expect that adoption of recently issued accounting
pronouncements will have a material impact on its financial position, results of
operations or cash flows.

Note 3 - Going Concern

Momentum has incurred significant losses from operations since inception and has
limited financial resources. These factors raise substantial doubt about
Momentum's ability to continue as a going concern. Momentum's financial
statements for the year ended December 31, 2008 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. The company currently has an
accumulated deficit of $13,185,236 through December 31, 2008. Momentum's ability
to continue as a going concern is dependent upon its ability to develop
additional sources of capital and, ultimately, achieve profitable operations.
The accompanying financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

F-8

Note 4 - Concentration of Credit Risk

At various times during the year, Momentum may have bank deposits in excess of
the FDIC insurance limits. Momentum has not experienced any losses from
maintaining cash accounts in excess of the federally insured limit. Management
believes that it is not exposed to any significant credit risk on cash accounts.

During 2008, three customers accounted for 100% of Momentum's revenue. Momentum
performs ongoing credit evaluations of its customers' financial condition.
Momentum's accounts receivable are unsecured. At December 31, 2008, two
customers account for 100% of accounts receivable.

Note 5 - Inventories

As of December 31, 2008 and 2007, inventory consisted of the following:

Description 2008 2007
- ----------- ---- ----
Finished Goods $ 1,980 $ 20,662
Raw Materials 71,572 36,097
------------- -----------
Total $ 73,552 $ 56,759
===============================

Note 6 - Property and Equipment

Property, plant and equipment as of December 31, 2008 and 2007 consisted of the
following:

Description 2008 2007
- ----------- ---- ----

Plant $ 3,279,592 $ 3,414,592
Plant machinery and equipment 44,455 29,810
Office furniture and equipment 52,239 52,238
Computer software 3,220 3,220
Leasehold Improvements 41,251 33,624
--------------------- ------------------
Total Assets 3,420,757 3,533,484
--------------------- ------------------
Accumulated Depreciation & Amortization (802,855)
--------------------- ------------------
$ 2,617,902 $ 3,253,410
================ ================

Note 7 - Assets Being Developed For Our Own Use

The asset developed for our own use consists of a biodiesel refinery plant for
which construction was completed in early 2007. On June 25, 2007, these assets
were placed into service pursuant to applicable accounting principles. For the
years ended December 31, 2008 and 2007, depreciation and amortization expense
was $121,161 and $277,896, respectively.

F-9

Note 8 - Loans Payable

Notes payable as of December 31, 2008 and 2007, consisted of the following:

Description 2008 2007
- ------------------------------------------------------------------------ -------------------- --------------------
Account purchasing agreement, payable to Crown Financial, to sell certain $ 150,000 -
accounts to Crown Financial. The agreement bears interest at 12% per annum and ==================== =====================
was entered into on December 1, 2008 and was paid in full with accrued interest
($15,000) on January 31, 2009.

Note 9 - Notes Payable to Related Parties

Notes payable to related parties as of December 31, 2008 & 2007 consist of the
following:

Description 2008 2007
- ------------------------------------------------------------------------ -------------------- ---------------------
Non-interest bearing note payable to Ultimate Investments Corporation, a company
wholly-owned by a shareholder originally scheduled to mature on September 30,
2006.
On April, 3, Ultimate and Momentum executed a forbearance agreement which allows
Momentum to scheduled payments of principal and interest at 12% through December
31, 2007. Secured by Momentum's assets.
$ - 315,891

Notes payable originally issued to Richard Robert,
Richard Cilento, David Fick and J. Paul Consulting.
The interest rate is 10% per annum, payable quarterly. These notes are secured
by all of the assets and property of Momentum. The notes may be converted into
shares of MMBI's common stock at any time at a conversion price of $0.40 per
share. If the notes are prepaid before May 1, 2010, Momentum will issue the
lenders a warrant to Purchase one share of Momentum common stock for each $1.00
principal amount of the note. Momentum does not consider prepayment likely. The
notes mature on May 1, 2013.
125,000
-------------------- ---------------------

The loan discount was calculated using the Beneficial conversion feature. The
warrants were valued per the Black Scholes method. The assumptions used to value
the Warrants included an expected term of 7 years, a risk-free interest rate of
3.78%, expected volatility using comparable company volatility of 215%, an
exercise price of $0.40 and a stock price on the date of grant of $0.50. The
discount will be amortized over the life of the notes.
(71,682)
==================== =====================
$ 53,318 $ 315,891
==================== =====================

F-10

The note payable to Ultimate Investments Corporation was issued as consideration
for the purchase and cancellation of stock as a condition of the acquisition of
Momentum by Momentum and the associated cost is being treated as an expense of
the acquisition in these financial statements. The note matured on September 28,
2006. Since the note was not paid at maturity, interest began to accrue at 12%
on that date. Interest has been imputed on this note from the date of issuance,
June 30, 2006, until it matured on September 30, 2006, when it began to accrue
interest according to its terms. During the year ended December 31, 2008, this
note was paid in full.

Note 10 - Convertible Notes Payable

Convertible notes payable as of December 31, 2008 and 2007 consisted of the
following:

Description 2008 2007
- ---------------------------------------------------------------------------------- ------------------ -----------------

Notes payable originally issued to ten lenders. The interest rate is 10% per
annum, payable quarterly. These notes are secured by all of the assets and
property of Momentum. The notes may be converted into shares of MMBI's common
stock at any time at a conversion price of $0.40 per share. If the notes are
prepaid before May 1, 2010, Momentum will issue the lenders a warrant to
Purchase one share of Momentum common stock for each $1.00 principal amount of
the note. Momentum does not consider prepayment likely. The notes mature on
May 1, 2013. 475,000 -

(272,392) -

Note payable originally issued to Thomas Prasil in the amount of $15,000. The
interest rate is 10% per annum, payable quarterly. This note is unsecured. The
notes may be converted into shares of MMBI's common stock at any time at a
conversion price of $0.40 per share. If the notes are prepaid before May 1,
2010, Momentum will issue the lenders a warrant to Purchase one share of
Momentum common stock for each $1.00 principal amount of the note. Momentum
does not consider prepayment likely. The notes mature on May 1, 2013. 15,000 -
------------------ -----------------
Total $ 217,608 $ -
================== =================

In conjunction with the notes payable referred to above, a lending agent was
paid a placement fee of $42,000. In addition the agent was issued 600,000
warrants with an exercise price of $0.40. Further explanation of the valuation
of the warrants is found in Note 15.

F-11

Note 11 - Obligations and Commitments

Momentum has leased office and plant space and also office and plant equipment.
Pursuant to these agreements, Momentum is obligated to make the following
payments:

Year Ending
December 31, Amount
- ------------------------------------ --------------------
2009 $ 365,416
2010 $ 317,074
2011 $ 303,343
2012 $ 117,619

Rental expense for the year ended December 31, 2008 was 287,592. Rental expense
for the year ended December 31, 2007 was $258,592.

Note 12 - Income Taxes

Momentum did not incur any income tax expense due to operating losses and the
related increase in the valuation allowance. The tax effects of the temporary
differences that give rise to deferred tax assets and liabilities as of December
31, 2008 and 2007 are as follows:

2008 2007
------------------ -------------------
Deferred tax assets:
Loss carry forwards $ 1, 439,000 $ 1,528,000
Less valuation allowance (1,439,000) (1,528,000)
------------------ -------------------

Net deferred tax assets $ - $ -
================== ===================

As of December 31, 2008 Momentum had a net operating loss carryforward for
federal income tax purposes of approximately $4,824,518 that may be offset
against future taxable income. As more fully disclosed in Note 1, Momentum
experienced a change in control during 2006. Internal Revenue Code Section 382
imposes restrictions upon a company's ability to utilize net operating loss
carryforwards subsequent to a change in control. Any limitations upon Momentum's
ability to utilize its net operating loss carryforwards against future taxable
income have not yet been determined.

Momentum has established a valuation allowance for the full amount of the
deferred tax assets as management does not currently believe that it is more
likely than not that these assets will be recovered in the foreseeable future.
To the extent not utilized, the net operating loss carryforwards will expire
starting in 2026.

Note 13 - Equity Transactions

During the year ended December 31, 2008, Momentum issued 200,000 shares of its
restricted common stock for cash of $80,000. The shares were sold at a price of
$0.40 per share.

F-12

On February 12, 2008, the Board of Directors of Momentum voted to cancel the
shares of the common stock held by the Momentum Employees & Consultant Trust.
The Momentum Employees & Consultant Trust held 7,500,000 shares of restricted
common stock. The shares were previously controlled by Charles Phillips, a
shareholder and former director of Momentum, and the shares were cancelled with
his consent.

During the year ended December 31, 2007, as a result of a private placement,
Momentum raised $5,020, 636, net of offering costs of $90,864, in exchange for
the issuance of 5,111,500 shares of restricted common stock. The shares were
sold at a price of $1.00 per share.

Note 14 - Options

Options were originally issued in conjunction with employment agreements for key
employees and consultants.

Option activity for the period from January 1, 2008 through December 31, 2008 is
as follows:

Expiration Exercise
Grant Date Date Price Beginning Granted Forfeited Ending
- ------------------- ----------------- -------------- --------------- ------------ ---------------- -----------------

04/20/07 04/20/12 $1.00 9,000,000 (6,750,000) 2,250,000
10/15/07 10/15/10 $1.00 50,000 (50,000) -
10/16/07 10/16/12 $1.00 7,000,000 (1,000,000) 6,000,000
11/01/07 11/01/12 $1.00 1,000,000 1,000,000
--------------- ------------ ---------------- -----------------
17,050,000 7,800,000 9,250,000
=============== ============ ================ =================

The weighted average exercise price for all options outstanding as of December
31, 2008 was $1.

F-13

Note 15 - Warrant Activity

Warrants activity for the period from January 1, 2008 through December 31, 2008
is as follows:

Expiration Exercise
Grant Date Date Price Beginning Granted Exercised Ending
- ------------------- ----------------- -------------- ------------------ ------------------ ------------- ---------------

6/27/2006 6/27/2016 $1.00 100,000 100,000
11/30/2006 11/30/2016 $1.00 10,000 10,000
12/31/2006 12/31/2016 $1.00 10,000 10,000
1/31/2007 1/31/2017 $1.00 10,000(1) 10,000
2/1/2007 2/1/2012 $1.00 2,000(1) 2,000
8/31/2007 8/31/2009 $1.00 1,000,000(2)
10/4/2007 10/4/2009 $1.00 150,000(3)
6/25/2008 6/25/2015 $1.00 300,000(4)
6/25/2008 6/25/2015 $1.00 600,000(5) 600,000
------------------ ------------------ ------------- ---------------
$ 1,282,000 $ 900,000 $ 2,182,000
================== ================== ============= ===============

The weighted average exercise price for all warrants outstanding as of December
31, 2008 was $1.

(1) Momentum calculated the fair value of these warrants at $18,895 using the
Black-Scholes option pricing model and this amount has been charged to general
and administrative expenses and credited to additional paid-in capital for the
year ending December 31, 2007. The assumptions used to value the warrants
include an expected term of 10 years, a risk free interest rate of 4.98%,
expected volatility using comparable company volatility of 145%, an exercise
price of $1 and a stock price on the date of grant of $1.60.

(2) Momentum calculated the fair value of these warrants at $547,579 using the
Black-Scholes option pricing model and this amount has been charged to general
and administrative expenses and credited to additional paid-in capital for the
year ending December 31, 2007. The assumptions used to value the warrants
include an expected term of 2 years, a risk free interest rate of 6.50%,
expected volatility using comparable company volatility of 154%, an exercise
price of $1 and a stock price on the date of grant of $0.95.

(3) Momentum calculated the fair value of these warrants at $95,746 using the
Black-Scholes option pricing model and this amount has been charged to general
and administrative expenses and credited to additional paid-in capital for the
year ending December 31, 2007. The assumptions used to value the warrants
include an expected term of 2 years, a risk free interest rate of 4.17%,
expected volatility using comparable company volatility of 186%, an exercise
price of $1 and a stock price on the date of grant of $0.80.

F-14

(4) Momentum calculated the fair value of these warrants at $149,624 using the
Black-Scholes option pricing model and allocated a portion of the original
proceeds to these warrants as a discount to the note through additional paid-in
capital. The assumptions used to value the warrants included an expected term of
7 years, a risk-free interest rate of 3.78%, expected volatility using
comparable company volatility of 215%, an exercise price of $0.40 and a stock
price on the date of grant of $0.50. The relative fair value of these warrants
was combined with the value of the beneficial conversion feature of the
convertible notes described in Note 9, and recorded as a discount on the notes.

(5) Momentum calculated the fair value of these warrants at $298,971 using the
Black-Scholes option pricing model and allocated a portion of the original
proceeds to these warrants as a discount to the note through additional paid-in
capital. The assumptions used to value the warrants included an expected term of
7 years, a risk-free interest rate of 3.78%, expected volatility using
comparable company volatility of 215%, an exercise price of $0.40 and a stock
price on the date of grant of $0.50.

Note 16 - Subsequent Events

Director Resignations

Richard Cilento has resigned as Director of the Company effective February 2,
2009.

Richard A. Robert resigned as Director of the Company on March 25, 2009.

F-15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Momentum BioFuels, Inc.

Dated: April 14, 2009
By: /s/Gregory A. Enders
---------------------------------
Gregory A. Enders,
Chief Executive Officer,
Chief Accounting Officer
and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

Dated: April 14, 2009
Momentum BioFuels, Inc.

/s/Gregory A. Enders
--------------------------------------
Gregory A. Enders, Director

/s/Jeffrey A. Ploen
--------------------------------------
Jeffrey A. Ploen, Director

/s/David Fick
--------------------------------------
David Fick, Director