U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

|X| QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

|_| TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-51564

NORTHERN ETHANOL, INC.
(Exact name of small business issuer as specified in its charter)

Delaware 34-2033194
-------- ----------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)

497 Delaware Avenue
Buffalo, NY 14202
------------------------------------ -------------
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: (716) 882-2157

BEACONSFIELD I, INC.
(Former name, former address and former
fiscal year, if changed since last report)

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

Check whether the issuer is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes |_| No |X|.

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 10,150,000 shares of Common
Stock, par value $ .0001 per share, outstanding as of May 19, 2006.

Transitional Small Business Disclosure Format (Check one): Yes |_| No |X|

NORETHERN ETHANOL, INC.

- INDEX -

Page
PART I - FINANCIAL INFORMATION:

Balance Sheet as of March 31, 2006
(unaudited) F-1

Statements of Operations (unaudited) for the cumulative periods November 29,
2004 (inception) to March 31, 2006 and the three months ended March 31,
2006 and March 31, 2005 F-2

Statements of Changes in Stockholders' Equity (unaudited) for the cumulative
period during the development stage (November 29, 2004 to March 31, 2006) F-3

Statements of Cash Flows (unaudited) for the cumulative periods November 29,
2004 (incpetion) to March 31, 2006 and the three months ended March 31,
2006 and March 31, 2005 F-4

Notes to unaudited interim Financial Statements F-5

Item 2. Management's Discussion and Analysis or Plan of Operation 1

Item 3. Controls and Procedures 35

PART II - OTHER INFORMATION:

Item 1. Legal Proceedings 36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36

Item 3. Defaults Upon Senior Securities 36

Item 4. Submission of Matters to a Vote of Security Holders 36

Item 5. Other Information 36

Item 6. Exhibits 37

Signatures 38

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

PAGE

UNAUDITED INTERIM FINANCIAL STATEMENTS:

Balance Sheet F-1
Statements of Operations F-2
Statement of Changes in Stockholders' Equity F-3
Statements of Cash Flows F-4
Notes to Unaudited Interim Financial Statements F-5 to F-12

See notes to unaudited interim financial statements

- --------------------------------------------------------------------------------
NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

BALANCE SHEET
(UNAUDITED)

AS AT: MAR 31, 2006
- -------------------------------------------------------------------------------------------------------------------

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 8,667
Other current assets 7,125
-------------------
Total current assets $ 15,792
===================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accrued expenses $ 6,698
-------------------
Total current liabilities 6,698

STOCKHOLDERS' EQUITY:
Preferred stock, $.0001 par value; 5,000,000 shares authorized;
none issued and outstanding -
Common stock, $.0001 par value; 75,000,000 shares authorized;
10,150,000 shares issued and outstanding
1,015
Additional paid-in capital 49,000
Deficit accumulated during the development stage (40,921)
-------------------
9,094
-------------------
$ 15,792
===================

See notes to unaudited interim financial statements

F-1

- --------------------------------------------------------------------------------
NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

STATEMENTS OF OPERATIONS
(UNAUDITED)

- --------------------------------------------------------------------------------

THREE MONTHS ENDED MARCH 31 NOV 29, 2004
----------------------------------- (INCEPTION)
2006 2005 TO MAR 31, 2006
---------------- -------------- ---------------

REVENUES $ -- $ -- $ --

GENERAL AND ADMINISTRATIVE EXPENSES 9,448 2,779 40,921

--------------------------------------------------------
NET LOSS $ (9,448) $ (2,779) $ (40,921)
========================================================

BASIC AND DILUTED LOSS PER SHARE $ (0.00) $ (0.00)
==================================

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 10,150,000 10,150,000
==================================

See notes to unaudited interim financial statements

F-2

- --------------------------------------------------------------------------------
NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

STATEMENT OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------

COMMON STOCK ADDITIONAL ACCUMULATED
-------------------------- PAID-IN ACCUMULATED COMPREHENSIVE
SHARES AMOUNT CAPITAL DEFICIT GAIN (LOSS) TOTAL
---------- --------- ---------- -------- ---------- --------

Inception, November 29, 2004 -- $ -- $ -- $ -- $ -- $ --

Stock issued for cash 10,150,000 1,015 49,000 -- -- 50,015
Net loss for the period
Novemeber 29, 2004
(Inception) to December
31, 2004 -- -- -- (3,708) -- (3,708)
---------- --------- ---------- -------- ---------- --------

Balances, December 31, 2004 10,150,000 1,015 49,000 (3,708) -- 46,307

---------- --------- ---------- -------- ---------- --------
Net loss for the year ended
December 31, 2005 -- -- -- (27,765) -- (27,765)
---------- --------- ---------- -------- ---------- --------

Balances, December 31, 2005 10,150,000 1,015 49,000 (31,473) -- 18,542

Net loss for the three
months ended March 31, 2006
(unaudited) -- -- -- (9,448) -- (9,448)
---------- --------- ---------- -------- ---------- --------

Balances, March 31, 2006
(unaudited) 10,150,000 $ 1,015 $ 49,000 $(40,921) $ -- $ 9,094
========== ========= ========== ======== ========== ========

See notes to unaudited interim financial statements

F-3

- --------------------------------------------------------------------------------
NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------

NOV 29, 2004
THREE MONTHS (INCEPTION)
ENDED MAR 31
------------------------
TO MAR 31,
2006 2005 2006
----------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,448) $ (2,779) $(40,921)
Adjustments to reconcile net loss to net cash used in operating
activities
Changes in operating assets and liabilities:
Other current assets 3,125 2,500 (7,125)
Accrued expenses 3,600 259 6,698
Accounts payable - related party (2,000) -- --
----------------------------------------

Net cash used in operating activities (4,723) (20) (41,348)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock -- -- 50,015

NET (DECREASE) INCREASE IN CASH ----------------------------------------
AND CASH EQUIVALENTS (4,723) (20) 8,667

CASH AND CASH EQUIVALENTS:
Beginning of period 13,390 37,515 --

----------------------------------------
End of period $ 8,667 $ 37,495 $ 8,667
========================================

See notes to unaudited interim financial statements

F-4

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. ORGANIZATION AND OPERATIONS

Beaconsfield I, Inc. (the "Company"), located in Buffalo, New York, was
incorporated in Delaware on November 29, 2004 for the purpose of engaging in the
potential future merger or acquisition of an unidentified target business. Since
its inception, the Company's operations have primarily included raising capital
and the performance of certain administrative functions.

On December 15, 2004, the Company issued 150,000 shares of its common stock for
a total of $15 in cash in accordance with a Stock Purchase Agreement.
Additionally on that date, the Company issued 10,000,000 shares of its common
stock, for a total of $50,000 in cash.

On April 6, 2006, the Company incorporated Northern Ethanol, Inc., a 100% owned
subsidiary under the laws of the State of Delaware. Effective May 3, 2006, the
Company merged with this subsidiary, and was the surviving entity. As permitted
by Delaware law, the Company has adopted Northern Ethanol, Inc. as its corporate
name on May 3, 2006. On April 11, 2006, the Company incorporated two 100% owned
Canadian subsidiaries, Northern Ethanol (Canada) Inc. and Northern Ethanol
(Barrie) Inc.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM FINANCIAL STATEMENTS
The accompanying interim financials statements of the Company as of March 31,
2006, for the three months ended March 31, 2006 and 2005 and for the period from
November 29, 2004 (Inception) to March31, 2006 have been prepared in accordance
with accounting principles generally accepted for interim financial statement
presentation and in accordance with the instructions to Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statement presentation. In the opinion of management, all
adjustments necessary for a fair statement of the results of operations and
financial position for the interim period presented have been included. All such
adjustments are of a normal recurring nature. This financial information should
be read in conjunction with the financial statements and notes thereto included
in the Company's Form 10-KSB for the year ended December 31, 2005. .

CASH AND CASH EQUIVALENTS - The Company considers all highly-liquid investments
with an original maturity of three months or less to be cash equivalents.

LEASES - The Company follows the guidance in SFAS No 13 "Accounting for Leases",
which requires the Company to evaluate the leases it signs to determine whether
they represent operating or capital leases at the inception of the lease.

STOCK BASED COMPENSATION - Effective January 1, 2006, the Company adopted
Financial Accounting Standards Board (FASB) Statement of Financial Accounting
Standard (SFAS) No. 123R, "Share Based Payment". SFAS 123R requires a public
entity to measure the cost of employee services received in exchange for an
award of equity instruments based on the grant-date fair value of the award.
That cost is recognized over the period during which an employee is required to
provide service in exchange for the award - the requisite service period
(usually the vesting period). SFAS 123R requires that the compensation cost
relating to share-based payment transactions be recognized in financial
statements. That cost is measured based on the fair value of the equity or
liability instruments issued. The adoption of this accounting policy did not
have any effect on prior periods.

F-5

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FOREIGN CURRENCY TRANSLATION - The Company has determined that the functional
currency of its Canadian subsidiaries is the Canadian dollar. All transactions
initiated in Canadian dollars are translated into U.S. dollars in accordance
with SFAS No. 52 "Foreign Currency Translation" as follows:
(i) Assets and liabilities at the rate of exchange in effect at the
balance sheet date; and
(ii) Revenue and expense items at the average rate of exchange
prevailing during the period
Adjustments arising from such translations are deferred until realization and
are included as a separate component of stockholders' equity (deficiency) as a
component of comprehensive income or loss. Therefore, translation adjustments
are not included in determining net income (loss) but are reported as a
component of other comprehensive income (loss).

The Company translates foreign currency transactions into the Company's
functional currency at the exchange rate effective on the invoice date. If the
exchange rate changes between the time of purchase and the time actual payment
is made, a foreign exchange transaction gain or loss results which is included
in determining net income for the period.

INCOME TAXES - Deferred income tax assets and liabilities are recognized for the
estimated future tax consequences attributable to temporary differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases, and are measured using enacted tax rates expected to
apply in the years in which those temporary differences are expected to be
recovered or settled. A valuation allowance is provided when it is more likely
than not that the full benefit of the deferred tax assets will not be realized.

The Company has approximately $6,000 in gross deferred tax assets at March 31,
2006 resulting from deferred start-up costs. A valuation allowance has been
recorded to fully offset these deferred assets because the future realization of
the related income tax benefits is uncertain. The change in the valuation
allowance from December 31, 2005 to March 31, 2006 amounted to approximately
$300.

USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the reported amounts of revenues and expenses
and the disclosure of contingent liabilities. Actual results may differ from
these estimates

LOSS PER COMMON SHARE - The Company computes net loss per common share using
SFAS No. 128 "Earnings Per Share." Basic loss per common share is computed based
on the weighted average number of shares outstanding for the period. Diluted
loss per share is computed by dividing net loss by the weighted average common
shares outstanding assuming all dilutive potential common shares were issued.
There were no options outstanding at March 31, 2006 and 2005. Accordingly, basic
and diluted loss per share are the same.

FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying value of cash and cash
equivalents, other current assets, accrued expenses and accounts payable -
related party approximates fair value due to the short period of time to
maturity.

PROPERTY AND EQUIPMENT - Computer equipment is recorded at cost and is
depreciated on a straight-line basis over its estimated useful life.

Leasehold improvements are capitalized at cost and amortized on a straight line
basis over the term of the lease.

Depreciation and amortization commences at the time when the assets are
substantially being used in operations.

F-6

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

3. EQUITY SECURITIES

Holders of shares of common stock are entitled to cast one vote for each share
held at all stockholders' meetings for all purposes, including the election of
directors. The common stock does not have cumulative voting rights.

The preferred stock of the Company shall be issued by the Board of Directors of
the Company in one or more classes or one or more series within any class, and
such classes or series shall have such voting powers, full or limited or no
voting powers, and such designations, preferences, limitations or restrictions
as the Board of Directors of the Company may determine, from time-to-time.

Holders of shares of stock of any class shall not be entitled as a matter of
right to subscribe for or purchase or receive any part of any new or additional
issue of shares of stock of any class, or of securities convertible into shares
of stock of any class, whether now hereafter authorized or whether issued for
money, for consideration other than money, or by way of dividend.

- --------------------------------------------------------------------------------

4. RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2006, the Company repaid Corsair
Advisors, Inc., an entity owned by a stockholder for advances it had made on
behalf of the Company prior to December 31, 2005. Additionally, the Company
utilized the office space and equipment of a stockholder at no cost, until April
2006, when the Company entered into a lease for office space, as further
discussed in Note 5(c).

Also during April 2006, the Company entered into a lease for property to be used
as an ethanol processing facility, as further discussed in Note 5(c). These
leases were entered into with an entity affiliated with a stockholder of the
Company.

- --------------------------------------------------------------------------------

F-7

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5. SUBSEQUENT EVENTS

On April 12, 2006, pursuant to an employment agreement, the Company granted
options to purchase an aggregate of 200,000 shares of the Company's common stock
at an exercise price equal to $10.00, to its Chief Executive Officer. The
options will vest in equal amounts each quarter over the next 2 years. The
options expire 5 years following the date of grant.

On April 21, 2006, pursuant to an employment agreement, the Company granted
options to purchase an aggregate of 50,000 shares of the Company's common stock
at an exercise price equal to $10.00, to its Chief Financial Officer. The
options will vest in equal amounts each quarter over the next 2 years. The
options expire 5 years following the date of grant.

The fair value of each option granted was estimated on the date of the grant
using the Black-Scholes fair value option pricing model with the following
assumptions:

-------------------------------------------------------------------
2006
-------------------------------------------------------------------
Risk Free Rate interest rate 4.02%

Volatility factor of the future expected market price
of the Company's common shares 86.56%

Weighted average expected life in years 5.0

Expected dividends NONE
-------------------------------------------------------------------
-------------------------------------------------------------------

The fair value of the options granted as determined above was $1,748,764, of
which $1,235,485 will be expensed in fiscal 2006.

Subsequent to the quarter end, as at May 19, 2006, the Company has received
$1,475,000 under the terms of a unit subscription agreement which provides for
the purchase of one share of common stock for $10.00. As at May 19, 2006,
147,500 shares of the Company's common stock are issuable under the terms of
this agreement. The Company is authorized to issue to accredited investors only
up to 500,000 shares of common stock under the terms of the Unit Subscription
agreement. Sales of units of the Company's stock under these agreements will
continue during the second quarter.

F-8

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5. SUBSEQUENT EVENTS (CONTINUED)

(c) At April 20, 2006, the Company entered into a lease agreement through its
wholly owned subsidiary, Northern Ethanol (Barrie) Inc, for a 25 year lease,
with optional renewal periods, on an industrial property located in Barrie,
Ontario, Canada, (the "Barrie Lease"), on which it intends to construct an
ethanol processing facility. The Company also entered into a 5 year lease on
April 11, 2006 through its wholly owned subsidiary, Northern Ethanol (Canada)
Inc., for office premises located in 193 King Street East, Suite 300, Toronto,
Ontario, CANADA to be used for its head office (the "Head Office Lease"). The
Company has analyzed these leases and determined that the terms of the property
lease at the Barrie industrial location qualify it as a capital lease. The terms
of the office lease at the Toronto location qualify it as an operating lease.

As the Barrie location was acquired for the purposes of constructing an ethanol
processing facility, and the plant is not yet operational, no amortization or
interest expense related to this lease is reflected in the pro forma condensed
income statement presented below. The interest during the construction period
will be capitalized.

The terms of the leases require the following minimum payments:

FISCAL YEAR BARRIE LEASE HEAD OFFICE LEASE TOTAL

2006 $ 323,916 $ 89,897 $ 413,813
2007 1,943,493 154,110 2,097,603
2008 1,943,493 154,110 2,097,603
2009 1,943,493 154,110 2,097,603
2010 1,943,493 154,110 2,097,603
Thereafter 46,515,177 64,212 46,579,389
---------------- ------------------- -----------------
$ 54,613,065 $ 770,549 $ 55,383,614

(d) The following unaudited pro forma condensed financial information gives
effect to the Company of entering into the leases as discussed in (c) above. The
Company is providing this pro forma financial information to aid in analysis of
the financial condition and results of operations of the Company following the
signing of the leases. This pro forma financial information is derived from the
unaudited financial statements of the Company for the three months ended March
31, 2006. The unaudited pro forma condensed consolidated financial information
should be read in conjunction with the historical financial statements. The
unaudited pro forma condensed consolidated balance sheet gives effect to the
leases as if they had each occurred on January 1, 2006 and combines the effect
of these transactions with the unaudited condensed historical balance sheet of
the Company as of March 31, 2006. The unaudited pro forma condensed consolidated
statement of operations for the three months ended March 31, 2006, assumes that
the merger was effected on January 1, 2006. The consolidated proforma financial
statements include the accounts of the Company and its wholly owned
subsidiaries. Inter-company balances and transactions are eliminated on
consolidation. The unaudited pro forma condensed consolidated financial
information is presented for illustrative purposes only and does not purport to
be indicative of the operating results or financial position that would have
actually occurred if the merger and other equity transactions had each been
effected on the dates indicated, nor is it indicative of our future operating
results or financial position. The pro forma adjustments are based on the
information and assumptions available as of May 16, 2006.

F-9

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5. SUBSEQUENT EVENTS (CONTINUED)

PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET

PRO FORMA PROFORMA
31-MAR-06 ADJUSTMENTS
ASSETS (unaudited) (unaudited) (unaudited)

CURRENT ASSETS:
Cash and cash equivalents $ 8,667 $ 8,667
Other current assets 7,125 7,125

-------------------------------------------------------------------
Total current assets 15,792 - 15,792

Property and equipment under capital
lease - (#1) 16,018,201 16,338,548
(#2) 320,347

-------------------------------------------------------------------
$ 15,792 $16,338,548 $ 16,354,340

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued $ 6,698 $ 6,698
expenses
($3) $ 1,943,493
Accounts payable - related party (#4) 269,692 2,213,185
-------------------------------------------------------------------
6,698 2,213,185 2,219,883

Obligation under capital lease - related party - (#1) 16,018,201 14,395,055
(#2) 320,347
(#3) (1,943,493)

-------------------------------------------------------------------
6,698 16,608,240 16,614,938
STOCKHOLDERS' EQUITY (DEFICIENCY)
Preferred stock, $.0001 par value; 5,000,000 shares authorized;
none issued and outstanding - - -
Common stock, $.0001 par value; 75,000,000 shares authorized;
10,150,000 shares issued and outstanding 1,015 - 1,015
Additional paid-in capital 49,000 - 49,000
Deficit accumulated during the development stage (40,921) (#4) (269,692) (310,613)
-------------------------------------------------------------------
9,094 (269,692) (260,598)

-------------------------------------------------------------------
$ 15,792 $16,338,548 $ 16,354,340
===================================================================

F-10

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5. SUBSEQUENT EVENTS (CONTINUED)

PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

- ------------------------------------------------------------------------------------------------------------------------------
3 MONTHS ENDED: Lease PROFORMA
31-MAR-06 adjustments
(unaudited) (unaudited) (unaudited)

REVENUES $ - $ - $ -

GENERAL AND ADMINISTATIVE EXPENSE
9,448 9,448
OCCUPANCY EXPENSE (#4) 269,692 269,692
-------------------------------------------------------------------
9,448 269,692 279,140

-------------------------------------------------------------------
NET LOSS $ (9,448) $ (269,692) $ (279,140)
===================================================================

BASIC AND DILUTED EARNINGS PER SHARE $ (0.00) $ (0.03)
======================= =====================

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
10,150,000 10,150,000
======================= =====================

F-11

NORTHERN ETHANOL, INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY BEACONSFIELD I, INC.)

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

5. SUBSEQUENT EVENTS (CONTINUED)

NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS

# 1
Property and equipment 16,018,201
Obligation under capital lease - related party (16,018,201)
Record present value of lease payments using a 12% discount rate
over 25 years, the initial term of the lease.

# 2
Property and equipment 320,347
Obligation under capital lease - related party (320,347)
Record interest expense on capital lease during construction period

# 3
Obligation under capital lease - related party
Accounts payable - related party 1,943,493
Record lease payments on capital lease (1,943,493)

# 4
Operating lease expense - related party 269,692
Accounts payable - related party (269,692)
Record lease payments on operating lease - quarter

For purposes of these pro forma condensed financial statements, a rate of 1.1680
has been used to convert Canadian dollar amounts into US dollars.

* * * * * * * * * * *

F-12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS DISCLAIMER

Except for the historical information contained herein, the matters discussed
below or elsewhere in this report on Form 10-QSB may contain forward-looking
statements that involve risks and uncertainties that could cause actual results
to differ materially from those contemplated by the forward-looking statements.
The Company makes such forward-looking statements under the provisions of the
"safe harbor" section of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements reflect the Company's views and assumptions, based on
information currently available to management. Such views and assumptions are
based on, among other things, the Company's operating and financial performance
over recent years and its expectations about its business for the current and
future fiscal years. When used in this Quarterly Report on Form 10-QSB, the
words "believes," "estimates," "plans," "expects," and "anticipates" and similar
expressions as they relate to the Company or its management are intended to
identify forward-looking statements.

Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it can give no assurance that its
expectations will prove to be correct. These statements are subject to certain
risks, uncertainties and assumptions, including, but not limited to, (a) its
ability to successfully construct an ethanol productionfacility and to secure
customers for its products, (b) the market price for gasoline and ethanol and
continued government suppoert for ethanol as a gasoline additive, (c) prevailing
economic conditions which may significantly deteriorate, thereby reducing the
demand for the Company's products and services, (d) availability of technical
support personnel or increases in the rate of turnover of such personnel,
resulting from increased demand for such qualified personnel, (e) changes in the
terms or availability of insurance coverage for the Company's plans, (f)
regulatory or legal changes affecting the Company's business, (g) loss of
business from, or significant change in relationships with, any major customer,
(h) the ability to successfully identify and contract new business
opportunities, both domestically and internationally, and (i) the ability to
secure necessary capital for general operating or expansion purpose. Should one
or more of these or any other risks or uncertainties materialize or develop in a
manner adverse to the Company, or should the Company's underlying assumptions
prove incorrect, actual results of operations, cash flows or the Company's
financial condition may vary materially from those anticipated, estimated or
expected and there could be a materially adverse effect on the Company's
business.

MANAGEMENT DISCUSSION AND ANALYSIS

CORPORATE BACKGROUND

Northern Ethanol Inc. ("we," the "Company", "Northern", or the "Registrant") was
incorporated as "Beaconsfield I, Inc." in the State of Delaware on November 29,
2004, and was formed as a vehicle to pursue a business combination. In May 2006,
the Company changed its name to Northern Ethanol Inc., by effecting a merger of
a subsidiary company into Beaconsfield I, Inc., in recognition of its target
business activity as discussed below. Since inception, the Company has been
engaged in organizational efforts and obtaining initial financing.

RESULTS OF OPERATIONS

For the period from its formation through March 31, 2006, the Company has not
conducted any active operations, except for its efforts to locate suitable
acquisition or merger transactions. No revenue has been generated by the Company
during the development stage, and the Company is unlikely to have any revenues
until it is able to consummate or effect the business plan which is outlined
below, of which there can be no assurance.

PLAN OF OPERATIONS

The Company has begun active negotiations with various parties to facilitate its
entry into the business of manufacturing fuel ethanol for sale to oil refiners
and other users.

The Company has secured or is in advanced stages of securing sites to build
ethanol processing facilities at two locations in Ontario, Canada (Barrie and
Sarnia), and one location in upper New York State for total planned production
capacity of 300 million US gallons per annum.

Each of these locations will be the site for a corn based ethanol processing
facility.

The Company is implementing a strategy to grow by:

- - Building state of the art processing plants on brown field and green field
sites;
- - Negotiating stable long term contracts with key suppliers;
- - Securing long term sales agreements;
- - Pursuing acquisitions of existing ethanol producers
- - Pursuing acquisitions and/or strategic alliances with ethanol technology
companies

Ethanol Production Facilities

The Company is committed to investing in the latest technology to ensure that
the processing costs are as low as possible, and the outputs are of the highest
quality. The initial locations have been chosen due to proximity to supply of
corn, natural gas, and water, and are well located for the transportation of
inputs and products.

Corn supply

The Company has a letter of intent with a privately held grain merchant's
corporation (the "Grain Merchant"), which owns and operates grain elevators, and
has extensive domestic and international experience in international grain
origination and co-product merchandizing. We expect to engage them to source all
of the corn required for the operation of the Barrie and Sarnia ethanol
facilities at competitive prices. We expect they will assist us in negotiations
with major corn suppliers to guarantee supply and price by committing to
long-term purchase agreements or opportunistic purchases on the spot market when
this can be done at favorable rates.

Sales

The Company has been in discussion with a privately held corporation which
provides ethanol marketing capability across North America. The ethanol
marketing company is a fully integrated marketing company supported by an
experienced sales force, a knowledgeable logistics and scheduling department,
customer service, and an online computer system that we will be able to access
to streamline all necessary correspondence for daily shipments and
transportation transactions. The Company expects to engage this marketing
company to handle the sales of our ethanol production.

We expect that the Grain Merchant would assist us with the sale of our dried
distillers grain by-product through spot sales or long-term contracts to major
purchasers.

We expect to seek a CO2 sales agreement for a purchase commitment on all of our
production.

Environmental Benefits

The benefits of reducing green house emissions are well understood and the
Company is proud to provide green energy to the markets that it will be serving.

The two facilities currently envisaged for Ontario are expected to be built over
the next two years. The Upper New York State facility is expected to be built
one year later.

- --------------------------------------------------------------------------------
THE COMPANY
- --------------------------------------------------------------------------------

Our goal is to produce, market and sell ethanol and other renewable fuels in the
Eastern United States and Canada.

We will be engaged in the business of producing and selling ethanol in Ontario,
and the North-Eastern and Mid-Western United States and Europe. We anticipate
that the long-term growth in demand for ethanol will ensure a strong market for
all of the output of our facilities.

We believe that we will have a competitive advantage due to the market niches
that we have targeted as well as our intention to build a cost effective
facility to provide supply of ethanol to regions where there is limited supply
currently available.

The Company has secured, or is in the advanced stages of securing, sites to
build ethanol processing facilities at the following locations:

- - Barrie, Ontario, Canada; 100 million gallons - The site has been obtained
under a 45 year lease including renewal options. The site is owned by an
affiliate of one of the shareholders of the Company.
- - Sarnia, Ontario, Canada; 100 million gallons - The site is under
negotiation.

In addition, the Company is actively negotiating for the acquisition and
development of a site at the following location:

- - New York State, United States of America; 100 million gallons

Each of these locations will be the site for a state-of-the-art ethanol
processing facility using corn as the feedstock. The Barrie location represents
a conversion of an existing site from a former brewery. The Sarnia and Upstate
New York locations represent new construction.

The Barrie, Ontario site is under long-term lease by the Company. The lease
allows the Company to utilize all existing site infrastructure and demolish or
modify existing structures to optimize plant operations.

The Sarnia site comprises 109 acres and the acquisition terms are currently
under negotiation. This site is adjacent to a major rail line, has good highway
access and is fully zoned and serviced.

The New York site is undergoing a comprehensive evaluation for a 100 million
gallon facility and business terms of the site acquisition are currently under
discussion.

We will begin construction at each location as soon as we are able to secure all
the necessary financing and permits to complete construction of this facility.
We expect this financing to take the form of both debt and equity, however, it
is the Company's intention to use leverage to the greatest extent feasible as is
typical with larger energy infrastructure projects. To date, we have not
obtained all of this required financing. See "Risk Factors" for a more detailed
discussion.

The manner in which Northern will develop future sites beyond the initial
aforementioned locations will depend upon the nature of the opportunity, the
respective needs of the parties involved, and desires of the Company. The
Company expects to set up a separate subsidiary to own each ethanol plant. The
Company may purchase assets outright, acquire an ownership interest in companies
controlling key assets, or issue shares in the subsidiary company that controls
the site to outside parties who control key assets.

It is likely that Northern will finance its participation in a business
opportunity through the issuance of common stock or other securities of Northern
and through the issuance of senior debt secured against the assets of each
operating location.

In the case of cash acquisition, the transaction may be accomplished upon the
sole determination of management without any vote or approval by stockholders.
In the case of a statutory merger or consolidation directly involving the
Company, it will likely be necessary to call a stockholders' meeting and obtain
the approval of the holders of a majority of the outstanding shares. The
necessity to obtain such stockholder approval may result in delay and additional
expense in the consummation of any proposed transaction and will also give rise
to certain appraisal rights to dissenting stockholders. Most likely, management
will seek to structure any such transaction so that is will not require
stockholder approval.

- --------------------------------------------------------------------------------
EXPECTED CAPITALIZATION
- --------------------------------------------------------------------------------

The following table sets forth our target capitalization as of the Company as of
the expected start of operations of the Barrie and Sarnia facilities.

As at March 31 , 2008

Long-term Debt (including capitalized interest)
Senior Debt $197,000,000
Subordinate Debt $140,500,000
------------
Total Long-Term Debt $337,500,000
Stockholders' Equity:
Common Equity $35,000,000
Accumulated Deficit $(4,200,000)
------------
Total Stockholders' Equity $30,800,000

Total Capitalization $368,300,000
============

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EXPECTED CUSTOMERS
- --------------------------------------------------------------------------------

Ethanol

The Company has entered into discussions with major oil refiners and selected
Ethanol marketers for the sale of its expected Ethanol production. The Company
is confident that it will execute non-binding agreements in the near term with
these parties for up to 80% of expected production volume for at least three (3)
years from the Barrie and Sarnia facilities. The selling price under these
agreements is expected to be relative to the local fuel wholesale (rack)
unleaded gasoline daily spot market.

Dried Distillers Grains and Solubles (DDGS)

The Company has entered into discussions with major marketers and users of DDGS
for the sale of its DDGS by products. The Company is confident that it will
execute non-binding agreements in the near term with these parties for all of
its expected production volume for at least three (3) years. The selling price
under these agreements is expected to be at the local and international spot
market.

Carbon Dioxide (CO2)

The Company has entered into discussions and or agreements with major local
users of CO2 for the sale of its CO2 by-product. The Company is confident that
it will execute non-binding agreements in the near term with these parties for
100% of expected production volume for at least five (5) years. The selling
price under these agreements is expected to be at the local spot market.

- --------------------------------------------------------------------------------
BUSINESS STRATEGY
- --------------------------------------------------------------------------------

Our primary goal is to become a leader in the production, marketing and sale of
ethanol in Canada and the Eastern United States. Our business strategy to
achieve this goal includes the following elements:

Complete construction of our first ethanol production facilities and begin
producing ethanol and co-products

Our initial goal is to construct two facilities to produce ethanol and its
co-products, specifically, DDGS and CO2, for sale in Ontario and the
Northeastern and Midwestern United States and Europe. Our proximity to the
geographic market in which we plan to sell our ethanol provides us significant
competitive advantages over other ethanol producers.

Upon our successful construction of multiple manufacturing facilities in Canada
and US, we believe there are significant opportunities for cost savings in raw
materials purchasing, transportation, engineering and operations which will
provide a profitability advantage vis-a-vis other smaller and single-site
ethanol producers.

We plan to explore opportunities to make strategic acquisitions of existing or
pending ethanol production facilities. In circumstances where we determine that
the acquisition of existing or pending ethanol production facilities represents
an opportunity to more quickly or successfully meet our business goals, we
intend to undertake to consummate these acquisitions.

We plan to identify and exploit new technologies for reduced costs and greater
manufacturing yields. For example, we are examining new technologies enabling
the conversion of cellulose, which is generated predominantly from wood waste,
paper waste and agricultural waste, into ethanol which would reduce or eliminate
our dependency on corn as a primary feedstock, while also helping local
municipalities deal with ever increasing demands on their garbage disposal
sites.

- --------------------------------------------------------------------------------
Management Team
- --------------------------------------------------------------------------------

Gordon Laschinger,
President and CEO

Mr. Laschinger's career included over twenty years in senior management of one
of Canada's largest energy firms. For the past eight years he has been Vice
President - Investment with J.J. Barnicke, a commercial brokerage firm
headquartered in Toronto, Canada. Gord is Chairman, William Osler Health Centre,
and is currently overseeing the $CDN 750 million construction of Canada's
largest hospital infrastructure project.

Ciaran Griffin,
Chief Financial Officer

Mr. Griffin is a Chartered Accountant and a Chartered Financial Analyst. He
spent ten years overseas on assignment with ADIA, a multi-billion dollar
international investment fund where he was responsible for all aspects of
financial and management reporting and fund performance analytics. He also led a
best practice initiative mandated to implement innovate new software
applications and to redesign business processes to improve their efficiency and
effectiveness. Since returning to Canada, he has worked as an accounting
consultant for an insurance company and as Director of Finance for Envoy
Communications Group Inc., a NASDAQ and TSX listed marketing company, where he
was responsible for the quarterly and annual financial statements and other
regulatory filings. Mr. Griffin was awarded a Bachelor of Commerce degree from
the University of Toronto. Mr. Griffin also serves as Chief Financial Officer of
Neutron Enterprises, Inc., a publicly traded digital signage business. Mr.
Griffin expects to devote 50% of his working time to the Company.

The Company is currently seeking to hire several additional executives to
complete its management team including a President & Chief Operating Officer and
Vice-President of Technology.

- --------------------------------------------------------------------------------
Canadian and United States Ethanol Markets
- --------------------------------------------------------------------------------

Ethanol cuts the emissions of unburned hydrocarbons and carbon monoxide. There
is a net reduction in harmful ozone forming emissions, and greenhouse gases are
with the use of ethanol blended gasoline since growing corn removes carbon
dioxide from the air. Ethanol use is approved by all vehicle manufacturers and
is used across Canada and the United States.

Producing ethanol increases the supply of high protein animal feed ingredients
through the distillation process; this creates new agricultural business
opportunities centered on the plant, and helps offset imports of soybean meal
and other animal feeds.

Fuel ethanol benefits the economy as well as the environment. Production of fuel
ethanol in Canada (and around the world) has produced a new market for
agricultural products, improving financial stability and security for farmers,
in addition to direct and indirect employment opportunities from farming to
transportation and manufacturing.

Brazil is a world leader in the use of fuel ethanol with nearly half of its cars
operating on pure ethanol. In response to the oil crisis of the mid 1970's the
Brazilian government in cooperation with private industry, created a national
program to produce alcohol from sugar cane and to build ethanol compatible
engines.

According to the Canadian Renewable Fuels Association, the United States ethanol
industry continues to set ethanol production records and this past February set
another production record surpassing 126,000 barrels per day - an increase of
16% over last year - and trends indicate a record year of production totaling
over 1.8 billion gallons. The current demand for Ethanol globally is estimated
at 10 billion US gallons per year.

Today, many countries around the world are testing oxygenated and (near 100%)
alcohol fuels. In the U.S. ethanol blends make up about 12% of the total
gasoline market. In some parts of the U.S., projects are underway to test the
viability of replacing diesel fuel with ethanol.

North American governments have been engaged in creating programs to encourage
the use of ethanol to reduce dependence on oil, to achieve higher environmental
standards and to stimulate rural economies and as a result, ethanol production
has been growing steadily in recent years. The health of the ethanol industry
remains closely tied to government programs that provide tax incentives, tariff
exemptions and regulatory mandates that favour ethanol's use as a fuel additive.

Effective January 1, 2007, the Ontario Government has mandated a minimum average
of 5 percent ethanol in gasoline as a way to support agriculture, improve air
quality, and reduce dependence on petroleum. It is widely believed that ethanol
blenders will blend ethanol at greater than 5% for optimal gasoline-ethanol
stability.

The demand for fuel ethanol in Canada has grown substantially in the last
decade, and currently stands at approximately 300 million litres per annum.

Historically, production capacity has closely tracked demand, however, with the
recently introduced Ontario government legislation, demand is forecast to
outstrip supply. Based on the current 14 billion litres annual gasoline
consumption, ethanol demand will be 700 million litres in 2007 and could reach
1.4 billion litres by 2010 based on a 10% ethanol blend.

The US ethanol industry are the fastest growing energy industries in the world.
Ethanol is blended in 30% of our nation's gasoline. An annual record of 3.4
billion gallons of ethanol was produced in 2004 from the 81 plants in operation
across the United States. Production will be increased by another 800 millions
gallons from the 16 additional plants currently under construction.

According to the U.S. Department of Energy, ethanol is typically blended at 5.7%
to 10% by volume in the United States, but is also blended at up to 85% by
volume for vehicles designed to operate on 85% ethanol. Compared to gasoline,
ethanol is cleaner burning and contains higher octane. We anticipate that the
increasing demand for transportation fuels coupled with limited opportunities
for gasoline refinery expansions and the growing importance of reducing CO2
emissions through the use of renewable fuels will generate additional growth in
the ethanol market.

In August, 2005, President George W. Bush signed into the law the Renewable
Fuels Standard which mandates the use of 4.0 billion gallons of renewable fuels
by oil refiners in 2006, increasing to 7.5 billion gallons in 2012. The vast
majority of this renewable fuel will be ethanol.

Typically ethanol is blended with gasoline to produce an oxygenated motor fuel.
The most common blend consists of 10 percent ethanol and 90 percent gasoline
although E85 (a blend of 85 percent ethanol and 15 percent gasoline) also is
used. Ethanol-blended fuels currently account for more that 12 percent of U.S.
motor fuel sales. Ethanol is widely marketed across the United States as a high
quality octane enhancer and oxygenate capable of reducing air pollution and
improving automobile performance. In spark ignition engines, ethanol emits
significantly less carbon monoxide and air toxic pollution than gasoline
therefore reducing the amount of harmful emissions released into the atmosphere.

Gasoline is oxygenated because the oxygen makes gasoline burn cleaner thereby
reducing ozone forming compounds and carbon monoxide.

The U.S. Clean Air Act Amendments of 1990 established special standards
effective January 1, 1995 for the most polluted ozone non-attainment areas: Los
Angeles Basin, Baltimore, Chicago Area, Houston Area, Milwaukee Area, New
York-New Jersey, Hartford Region, Philadelphia Area and San Diego, with
provisions to add other areas in the future if conditions warrant. California's
Central Valley was added in 2002. At the outset of the program there were a
total of 96 MSAs not in compliance with clean air standards for ozone, which
currently represents approximately 60% of the national market.

The legislation requires a minimum of 2.0% oxygen by weight in reformulated
gasoline as a means of reducing carbon monoxide pollution and replacing octane
lost by reducing aromatics which are high octane portions of refined oil. The
Reformulated Gasoline Program also includes a provision that allows individual
states to "opt into" the federal program by request of the governor, to adopt
standards promulgated by California that are stricter than federal standards, or
to offer alternative programs designed to reduce ozone levels. Nearly the entire
Northeast and middle Atlantic areas from Washington, D.C., to Boston not under
the federal mandate have "opted into" the federal standards.

The two available oxygenates to meet both oxy-fuel and RFG requirements have
been MTBE (methyl tertiary butyl ether) and ethanol. MTBE is an ether made from
methanol produced from natural gas and, until recently, has been the most widely
used oxygenate to meet CAAA90 requirements.

Because of its favorable handling qualities and the fact that it is a petroleum
product, MTBE has been the preferred oxygenate for the petroleum industry.
However, MTBE has shown significant adverse environmental and health safety
characteristics that have led to the decision by several key States to ban its
use. Specifically, MTBE is highly persistent (i.e. it has a very long half-life)
and has been identified as a potential carcinogen. MTBE has been detected in
drinking water supplies in almost all areas where it is used. Reflecting these
issues, California, New York, Connecticut, New Jersey and more than twenty other
states have banned the use of MTBE.

In Ontario, use of ethanol will be driven primarily from legislation put in
place by the Dalton McGuinty government which mandates a 5% ethanol blend in
gasoline by January 1, 2007. It is widely believed that ethanol blenders will
blend ethanol at greater than 5% for optimal gasoline-ethanol stability.

Management of Northern Ethanol believes that the core markets for the company's
products will those located within approximately 500 miles of its production
sites with the additional requirements that significant competition with closer
geography not be present and use of ethanol is mandated via blending
requirements or MTBE bans. Based on these requirements, management believes that
its core markets will be as follows:

- - Michigan
- - New Hampshire
- - New Jersey
- - New York
- - Ohio
- - Ontario
- - Rhode Island

The Government of Canada is also considering legislation which would mandate the
use of 5% ethanol nationally by 2010. If this comes into effect, then Quebec
would also become a target market.

It is estimated that markets that are within 500 miles of our proposed
locations, will require approximately 2 Billion gallons of ethanol by 2007 based
on a 7.5% blend. This analysis is believed to be conservative as it projects
ethanol demand only from regions with current MTBE bans or mandated ethanol
blending and does not take into account areas where MTBE bans may be enacted in
the future.

Due to the fact that significant competition or closer geographic proximity from
the US mid-West is forecast to service Illinois and Indiana, these markets have
not been included as target markets for our business.

It is estimated that current ethanol production capacity in the US, Ontario and
Quebec is approximately 4.3 billion gallons, with an additional 2.1 billion
gallons to come online by the end of 2007 from expansion of existing facilities
and new construction. In addition, management estimates that a potential
additional 254 million gallons could come online by 2008, although this planned
capacity is believed to be at an early state of development. In total, assuming
this potential capacity comes online, total production would be 6.7 Billion
gallons, the majority of which would be situated in the prime corn producing
regions of the US mid-West.

Northern believes it will have a key competitive advantage in supplying its
target markets due to the relative lack of planned competitive production
capacity. In total of the six states and one province identified as target
markets, local demand is forecast to outstrip supply by over 2 billion gallons
annually.

Key metros to which Northern believes it will supply most of its ethanol
production include Toronto, Detroit, Cleveland, Cincinnati, Buffalo and New York
City.

We believe that the conclusion that can be drawn from the above analysis is that
there is forecast to be excess demand in both Ontario and the Eastern United
States key ethanol markets (assuming only current MTBE bans are in effect) to
which Northern plans to supply, which will help to ensure that its ethanol
production is sold into a strong market.

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Ethanol Production Process
- --------------------------------------------------------------------------------

The production of ethanol from starch or sugar-based feedstocks has been
practiced for thousands of years. While the basic production steps remain the
same, the process has been refined considerably in recent years, leading to a
highly-efficient process. The modern production of ethanol requires large
amounts of corn, or other high-starch grains, and water as well as chemicals,
enzymes and yeast, and denaturants such as unleaded gasoline or liquid natural
gas, in addition to natural gas and electricity.

In the dry milling process, corn or other high-starch grains are first ground
into meal and then slurried with water to form a mash. Enzymes are then added to
the mash to convert the starch into the simple sugar, dextrose. Ammonia is also
added for acidic (pH) control and as a nutrient for the yeast. The mash is
processed through a high temperature cooking procedure, which reduces bacteria
levels prior to fermentation. The mash is then cooled and transferred to
fermenters, where yeast is added and the conversion of sugar to ethanol and CO2
begins.

After fermentation, the resulting "beer" is transferred to distillation, where
the ethanol is separated from the residual "stillage." The ethanol is
concentrated to 190 proof using conventional distillation methods and then is
dehydrated to approximately 200 proof, representing 100% alcohol levels, in a
molecular sieve system. The resulting anhydrous ethanol is then blended with
about 5% denaturant, which is usually gasoline, and is then ready for shipment
to market.

The residual stillage is separated into a coarse grain portion and a liquid
portion through a centrifugation process. The soluble liquid portion is
concentrated to about 40% dissolved solids by an evaporation process. This
intermediate state is called condensed distillers solubles, or syrup. The coarse
grain and syrup portions are then mixed to produce wet distillers grains, or
WDG, or can be mixed and dried to produce dried distillers grains with solubles,
or DDGS. Both WDG and DDGS are high-protein animal feed products.

- --------------------------------------------------------------------------------
Corn Market and Supply
- --------------------------------------------------------------------------------

The cost of corn is the largest variable cost associated with the production of
ethanol. A 100 million gallon per year ethanol facility requires approximately
38 million bushels of corn each year, the cost of which is expected to equate to
approximately 50% of net sales. We expect that our grain receiving facilities at
our Barrie and Sarnia sites will be among the most efficient grain receiving
facilities in Canada. Each plant will have the capacity to store at least 10
days supply of corn, or approximately 1.2 million bushels to ensure that there
is no interruption to the ethanol production process in the event of any
disruptions in the supply of corn.

A timely and economically viable supply of corn will be critical to the success
of the Company. We expect that all corn required for the Barrie and Sarnia
facilities can be sourced from Ontario, however, opportunistic purchases from
the United States, Brazil and other jurisdictions will also form part of our
corn supply strategy.

Ontario farmers produced 210.3 million bushels of corn in the 2005 crop year, up
from 176.6 million bushels in 2001. According to the Ontario Corn Producers
Association, 2006 production is forecast at 228.8 million bushels. Despite a
decline in total acreage, improved production technologies have led to a steady
increase in yields and total production. As a result, although Ontario is a net
importer of corn, prices have remained relatively stable, with a slight downward
trend.

Based on our estimated 2007 province wide ethanol production of 700 million
litres, and assuming all required corn were sourced from Ontario to the extent
available, approximately 70 million bushels of corn would need to be imported to
meet the total demand, up from 52 million bushels estimated for the 2006 crop
year. This increase in demand is expected to result in a moderate increase in
corn prices, which we believe will be partially offset by livestock producers
switching from corn based feed to other feed substitutes. As a net result, a
small increase in the price of Ontario corn is forecast and the Company has
included the anticipated Ontario price increase in its financial projections.

According to the USDA, total United States corn production was 11.8 Billion
bushels in 2004, up from 10.1 Billion in 2003. Of this total, 57% was produced
in the top four Mid-West producing states of Iowa, Illinois, Nebraska and
Minnesota. The Mid-Western US corn belt region is within convenient rail access
to Company's initial production sites in Barrie and Sarnia, In addition, the
closest states of Michigan, Ohio and New York have substantial production and
are within economical truck and or lake vessel distance.

Current production methods require approximately 0.36 bushels of corn per gallon
of denatured fuel ethanol (2.8 gallons / bushel). Most corn grown in North
America centres in the US Mid-West. Approximately 57% of US corn is produced in
Iowa, Illinois, Nebraska and Minnesota.

Using the preceding corn yield assumption and potential production capacity
above, ethanol production will consume approximately 20% of current corn
production. It is important to note that this corn production is not a forecast
number and does not include likely increases in harvests in the next two years.
This analysis is supported by the Douglas Tiffany (University of Minnesota)
study described in Northern's business plan in which it also projected that US
ethanol production will consume 20% of US corn supply by 2007.

Northern believes it can economically source adequate supplies of corn from the
following regions which are of close proximity to its planned production sites:

- - Ontario
- - Michigan
- - Ohio

Including Northern, total local ethanol demand for corn in 2008 is forecast at
236 million bushels, up from 40 million bushels at present. Northern would
constitute 46% of total local demand or 108 million bushels. Total corn
production in these regions is currently 959 million bushels.

US corn prices have historically been relatively stable. Over the past 20 years,
the average closing price of corn on the Chicago Board of Trade (CBOT) was $2.30
/ bushel. Excluding the brief `corn shock' of 1996 due to a severe Mid-West
drought, the price of corn has averaged lower. The current price of corn on CBOT
is approximately $2.30.

Northern has assumed a blended U.S. and Ontario price for our corn supply of US
$2.55 per bushel (excluding freight). This forecast reflects an anticipated
firming of the market with increased US and Ontario ethanol production.

The Grain Merchant company has reviewed the corn requirements for both the
Barrie and Sarnia ethanol projects and compared them to the supply and
distribution of corn in North America.

Northern believes it will ultimately source approximately 25% of its corn
requirement for Barrie and Sarnia facilities in Ontario and 75% from either
Michigan or Quebec which will utilize truck, rail and lake vessel transportation
methods. The corn supply for the New York state location is in the initial
planning stages, however, given limited local supply, we expect that the
majority of corn will be sourced from Ohio by rail and truck.

As of February 2006, the USDA's baseline price forecast for corn through from
2008 through 2015 is an average of $2.53/ bushel, which further supports
Northern base price assumption.

Furthermore, according to recent study by Douglas Tiffany of the University of
Minnesota, US ethanol production will consume 20% of US corn supply by 2007, up
from 10% presently as follows as a result of the implementation of the US
Renewable Fuels Standard (RFS):

Projected US Ethanol Corn Consumption Vs. Corn Production

Corn Use for
Ethanol Production Ethanol Corn Crop
(billions of (millions of (millions of % of Corn
Year gallons) bushels) bushels) Crop
- ----------- -------------------- ----------------- ---------------- ------------

2004 3.0 1,259 10,089 12.5%
2005 3.7 1,370 11,741 11.7%
2006 4.0 1,482 10,985 13.5%
2007 6.0 2,222 10,850 20.5%

Source: Douglas Tiffany, Growth in Renewable Fuels and Effects on Feed Mark ets,
September, 2005

The study further concluded the following as a result of the RFS through 2012:

- - Ethanol will be produced primarily from corn at dry grind facilities
- - Corn prices will increase on average by $0.30 per bushel (approximately
8%) in the US by 2012.
- - Corn acres will rise 3.5%
- - Large supplies of distillers grain by-product will reduce soy-bean meal
(SBM) prices by 7%, leading to some switching to SBM from corn as a
feed ingredient

The price increase in corn forecast above has been incorporated into our
financial projection.

In summary, management believes there will be an adequate supply of corn from
both local and or Mid-West markets in 2008 and beyond after taking into account
the projected demand from new ethanol facilities coming online.

WE PLAN TO SOURCE CORN PRIMARILY FROM ONTARIO, MICHIGAN AND THE US MID-WEST
USING A COMBINATION OF STANDARD CONTRACTS, SUCH AS SPOT PURCHASES, FORWARD
PURCHASES AND BASIS CONTRACTS. WE PLAN TO ESTABLISH A RELATIONSHIP WITH A
FORWARDING BROKER AND EXPECT TO SET ALLOWABLE LIMITS OF OPEN AND UN-HEDGED GRAIN
TRANSACTIONS THAT ITS MERCHANTS WILL BE REQUIRED TO FOLLOW PURSUANT TO A RISK
MANAGEMENT PROGRAM. THESE LIMITS ARE EXPECTED TO BE REVIEWED AND ADJUSTED ON A
REGULAR BASIS.

The Company intends to source its corn from a number of corn marketers and has
received a Letter of Intent with a Grain Merchant which provides for both corn
provisioning services and distillers grains marketing.

- --------------------------------------------------------------------------------
Distillers Grains and Solubles Market
- --------------------------------------------------------------------------------

When ethanol plants make ethanol, remaining nutrients - protein, fiber and oil -
are the by-products used to create livestock feed called dried distillers grains
with solubles (DDGS). DDGS is rich in cereal and residual yeast proteins,
energy, minerals and vitamins and are an excellent digestible protein and energy
source for beef cattle. DDGS Is a valuable feed for both feedlot and dairy
cattle. In North America, over 80% of DDGS is used in ruminant diets. DDGS is
also fed to poultry, and recent studies show excellent nutritional value of DDGS
in swine diets, and its use is increasing in the pork industry.

We estimate that approximately 5.8 to 6.8 million tons of dried distillers
grains are produced and sold every year in North America. Dairy cows and beef
cattle are the primary consumers of distillers grains.

Historically, the market price for distillers grains has been stable in
comparison to the market price for ethanol. We believe that the market price of
DDGS is determined by a number of factors, including the market value of corn,
soybean meal and other competitive protein ingredients, the performance or value
of DDGS in a particular feed formulation and general market forces of supply and
demand. We also believe that nationwide, the market price of distillers grains
historically has been influenced by producers of distilled spirits and more
recently by the large corn dry-millers that operate fuel ethanol plants.

The core usage for DDGS is in livestock feed. The feed industry is price
sensitive industry, and manufacturers use a system called "least cost
formulation" to develop their rations. DDG's are a little more than half of the
protein content of soybean meal, therefore it is reasonable to assume they
should maintain a value around half the price of soybean meal. Currently, 47.5%
soy meal is priced at $222 per tonne in Hamilton, Ontario and 28% DDG's are
priced at $113 per tonne in Chatham, Ontario. Just as it is likely to assume
that the value of corn will rise as ethanol production in North America
increases, it is also reasonable to assume that the value of feed quality
proteins will decline as the supply of DDG's increases. Currently the average
price of DDG's in the mid western US (Chicago) is approximately $93 per tonne.

- --------------------------------------------------------------------------------
Government Regulations
- --------------------------------------------------------------------------------

Our existing and proposed business operations are subject to extensive and
frequently changing federal, state and local laws and regulations relating to
the protection of the environment. These laws, their underlying regulatory
requirements and the enforcement thereof, some of which are described below,
impact, or may impact, our existing and proposed business operations by
imposing:

- - Restrictions on our existing and proposed business operations and/or the
need to install enhanced or additional controls;

- - The need to obtain and comply with permits and authorizations;

- - Liability for exceeding applicable permit limits or legal requirements, in
certain cases for the remediation of contaminated soil and groundwater at
our facilities, contiguous and adjacent properties and other properties
owned and/or operated by third parties; and

- - Specifications for the ethanol we market and plan to produce.

In addition, some of the governmental regulations to which we are subject, are
helpful to our ethanol marketing business and proposed ethanol production
business. The ethanol fuel industry is greatly dependent upon tax policies and
environmental regulations that favor the use of ethanol in motor fuel blends in
North America. Some of the governmental regulations applicable to our ethanol
marketing business and proposed ethanol production business are briefly
described below.

Ontario Renewable Fuels Standard

In November, 2005, the Ontario Government enacted legislation known as the
Renewable Fuel Standard (RFS) which mandates a 5% ethanol blend in all gasoline
sold in the province after January 1, 2007. The RFS is a flexible, market
orientated means of achieving increased ethanol content in the Ontario gasoline
pool. The RFS will increase the demand for fuel ethanol in Ontario to
approximately 700 million liters per year.

U.S. Federal Excise Tax Exemption

In the US, Ethanol blends have been either wholly or partially exempt from the
federal excise tax, or FET, on gasoline since 1978. The exemption has ranged
from $0.04 to $0.06 per gallon of gasoline during that 25-year period. Current
law provides a $0.051 per gallon exemption from the $0.183 per gallon FET on
gasoline if the taxable product is blended in a mixture containing at least 10%
ethanol. The FET exemption was revised and its expiration date was extended for
the sixth time since its inception as part of the Jumpstart Our Business
Strength, or JOBS, Act enacted in October 2004. The new expiration date of the
FET exemption is December 31, 2010. We believe that it is highly likely that
this tax incentive will be extended beyond 2010 if Congress deems it necessary
for the continued growth and prosperity of the ethanol industry.

Clean Air Act Amendments of 1990

In November 1990, a comprehensive amendment to the Clean Air Act of 1977
established a series of requirements and restrictions for gasoline content
designed to reduce air pollution in identified problem areas of the United
States. The two principal components affecting motor fuel content are the
Oxygenated Fuels Program, which is administered by states under federal
guidelines, and a federally supervised Reformulated Gasoline Program.

Oxygenated Fuels Program

Federal law requires the sale of oxygenated fuels in certain carbon monoxide
non-attainment Metropolitan Statistical Areas, or MSA, during at least four
winter months, typically November through February. Any additional MSA not in
compliance for a period of two consecutive years in subsequent years may also be
included in the program. The EPA Administrator is afforded flexibility in
requiring a shorter or longer period of use depending upon available supplies of
oxygenated fuels or the level of non-attainment.

Reformulated Gasoline Program

The Clean Air Act Amendments of 1990 established special standards effective
January 1, 1995 for the most polluted ozone non-attainment areas: Los Angeles
Basin, Baltimore, Chicago Area, Houston Area, Milwaukee Area, New York-New
Jersey, Hartford Region, Philadelphia Area and San Diego, with provisions to add
other areas in the future if conditions warrant. California's Central Valley was
added in 2002. At the outset of the program there were a total of 96 MSAs not in
compliance with clean air standards for ozone, which currently represents
approximately 60% of the national market.

National Energy Bill Legislation

A national Energy Bill was signed into law in August 2005 by President Bush. The
Energy Bill substitutes the existing oxygenation program in the Reformulated
Gasoline Program with a national "renewable fuels standard." The standard sets a
minimum amount of renewable fuels that must be used by fuel refiners. Beginning
in 2006, the minimum amount of renewable fuels that must be used by fuel
refiners is 4.0 billion gallons, which increases progressively to 7.5 billion
gallons by 2012.

Additional Environmental Regulations

In addition to the governmental regulations applicable to the ethanol marketing
and production industries described above, our business is subject to additional
federal, state and local environmental regulations, including regulations
established by the EPA, the California Air Quality Management District, the San
Joaquin Valley Air Pollution Control District and the California Air Resources
Board, or CARB. We cannot predict the manner or extent to which these
regulations will harm or help our business or the ethanol production and
marketing industry in general.

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Construction of Ethanol Plant
- --------------------------------------------------------------------------------

NORTHERN WILL ENTER INTO CONSTRUCTION AGREEMENTS WITH A LEADING CONSTRUCTION
COMPANY FOR THE CONSTRUCTION OF AN ETHANOL PLANT AT OUR BARRIE AND SARNIA SITES.
WE EXPECT TO INCUR TOTAL CONSTRUCTION COSTS FOR THESE TWO PLANTS OF
APPROXIMATELY $317 MILLION.

The Company is currently in discussions with leading general contractors and
site engineering firms which will oversee final design and process engineering
drawings.

The Company is pursuing the integration of a proven state of the art technology
into the final design of the project. Technology providers currently under
consideration include:

- - ICM, Inc.
- - Delta-T Corp.
- - Vogelbusch USA, Inc.

A final decision with respect to this selection is expected to be made by
June 2006

Northern intends to engage its construction and technology partners on a fixed
price, performance guaranteed basis in order to minimize financial risk. The
technology providers will be required to provide guarantees covering the
guaranteed yield, as well as the quantity of fuel and water used in the process.

- --------------------------------------------------------------------------------
Competition
- --------------------------------------------------------------------------------

The Ethanol production industry is becoming increasingly competitive. We believe
that our ability to successfully compete depends on many factors including but
not limited to the economics of feedstock supply, proximity to major customers
and extent of transportation infrastructure.

The Company's most significant competitor is Commercial Alcohols Inc.
headquartered in Brantford, Ontario with 49% of the total existing and estimated
planned competitive ethanol production in Ontario/Quebec of 148 million gallons.
We believe that Commercial Alcohols is actively pursuing other production sites
in Canada and the United States.

We believe that upon the completion of construction of our Barrie and Sarnia
ethanol production plants, we will have a competitive advantage in the Ontario
market when selling to oil refiners due to the following:

- - Our facilities are strategically located near refiners' gasoline
blending terminals
- - We will have full rail transport infrastructure in place
- - Our facilities are near to major highway provides efficient road
transport
- - We will benefit from strong economies in purchasing and distribution
through large production volume

- --------------------------------------------------------------------------------
Employees
- --------------------------------------------------------------------------------

As of April, 2006, we employed five persons. We expect to recruit additional
employees of high skill, and our success will depend in part upon our ability to
retain such employees and attract new qualified employees who are in great
demand.

- --------------------------------------------------------------------------------
Facilities
- --------------------------------------------------------------------------------

Our corporate headquarters, located in Toronto, Canada, consists of a 7,200
square foot office rented under a five year gross lease.

We have acquired a 45 year lease, including renewal options, on real property
located in Barrie, Ontario consisting of a building of approximately 350,000
square feet and a land area of 30 acres, on which we expect to construct our
first ethanol production facility. The site is owned by an affiliate of one of
the shareholders of the Company. We are under negotiations to purchase real
property located in Sarnia, consisting of approximately 109 acres on which we
intend to construct another ethanol production facility. In addition, we are in
negotiations to acquire a parcel of real property located in New York State on
which we expect to construct an additional ethanol production facility.

- --------------------------------------------------------------------------------
DETAILED DESCRIPTION OF PROJECT DESIGN AND PRODUCTION TECHNOLOGY
- --------------------------------------------------------------------------------

Grinding

The corn is ground to a fine powder, called meal, by hammer mills.

Liquefaction

The meal is mixed with water and the enzyme alpha-amylase. It is then heated in
cookers in order to liquefy the starch in the mash. The cookers have a high
temperature stage which operates at 110 degrees Celsius and a lower temperature
holding period which operates at 85 degrees Celsius. The temperatures attained
and the duration of heating prevent bacteria from growing in the mash and allow
for efficient enzyme activity in converting starch to less complex
carbohydrates. Recycled process condensate and energy recovery heat exchangers
are used to minimize the energy input.

Saccharification

The mash from the liquefaction is cooled and the secondary enzyme gluco-amylase
is added to convert liquefied carbohydrates to fermentable sugars in a process
called saccharification.

Fermentation

Yeast is added to the mash to ferment the sugars, producing alcohol and carbon
dioxide. In batch fermenters the mash stays in the tank for about 50 hours. Heat
is produced by the activity of the yeast, making it necessary to cool the
fermenting mash with recirculation coolers. Carbon dioxide is collected,
scrubbed to remove any remaining ethanol, and then transferred to the liquefying
plant. At completion of fermentation the contents of the fermentation tank is
transferred to a beerwell making it available for pumping forward to
distillation.

Distillation

The fermented mash, called "beer," contains between 12 and 16 percent alcohol as
well as all the non-fermentable solids from the grain and the yeast cells. The
mash is pumped to a continuous flow, multi-column distillation system where the
alcohol is removed from the solids and water. The alcohol leaves the top of the
final column 95% pure. The residual mash, called stillage is transferred from
the bottom of the distillation column to the centrifuge for further processing.

Dehydration

The alcohol solution from the top of the distillation column is passed through a
system to remove the remaining water (approximately 5%). Molecular sieves,
consisting of ceramic beads, capture the remaining water as vaporized ethanol
solution is passed by. After the molecular sieves the ethanol is called
anhydrous (without water) and is 200 proof and the quality of the ethanol is
sufficient to meet customer specifications.

Denaturing

Ethanol that is intended for use as fuel is denatured by adding a poison (2-5%)
to make it unfit for human consumption. Natural gasoline, derived from natural
gas, or raffinate is often used because these are low octane and can be cheaply
obtained and blended with high-octane ethanol.

Distillers Dried Grains and Solubles (DDGS)

The residual mash is centrifuged to separate liquid from grain residues or
distillers grains. The liquid is heated to remove the water and to concentrate
the soluble materials. The distillers grains can be sold after centrifuge or
pressing and fed wet (65% moisture) within a short period of time to cattle.
Typically distiller's grains are dried in rotary drum driers and concentrated
syrup, containing solubles, is mixed in for further drying. In some cases the
syrup is sold as livestock feed alone. This section of the plant is energy
intensive, and has been designed with a high degree of energy integration to
reduce overall plant energy requirements. DDGS are typically sold at 11%
moisture and test 26% in crude protein, 10% crude fat, and 12% crude fiber.
Amino acid content and the balance of DDGS constituents depend on processing
methods.

Cellulose Conversion

The project team has undertaken a review of alternate ethanol processing
technology, including the use of cellulose instead of corn as the input. If we
were to implement this technology. we would plan on using a counter-current
hydrolysis process. This process introduces the feedstock into a horizontal
counter-current reactor. Steam is then added to increase the temperature to
180(degree)C. The feedstock remains in the reactor for some eight minutes. This
hydrolyzes 60% of the hemicellulose in this first phase. The feedstock is then
augured from the horizontal reactor to a vertical reactor operating at
225(degree)C. A very dilute sulphuric acid is added to the feed, which
hydrolyzes almost all of the hemicellulose and about 60% of the cellulose.
Results from pilot plants show that this process can increase glucose yields by
over 60%. This results in an increase in the fermentation temperature to
55(degree)C, and an increase in ethanol yield by over 90%.

At this point, we feel that the cellulose conversion technology is immature, but
we will continue to monitor its appropriateness for its usefulness in subsequent
plant developments.

RISK FACTORS

THE FOLLOWING SUMMARIZES MATERIAL RISKS THAT YOU SHOULD CAREFULLY CONSIDER RISKS
RELATED TO OUR OPERATIONS

WE HAVE INCURRED LOSSES IN THE PAST AND EXPECT TO INCUR GREATER LOSSES UNTIL OUR
ETHANOL PRODUCTON BEGINS

We have incurred losses in the past. As of March 31, 2006 and December 31, 2005,
we had an accumulated deficit of $40,921 and $31,473, respectively. For the
three months ended March 31, 2006 and for the year ended December 31, 2005, we
incurred net losses of $9,448 and $27,765, respectively. We expect to incur
significantly greater losses at least until the completion of our initial
ethanol production facility in Barrie, Ontario. We estimate that the earliest
completion date of this facility and, as a result, our earliest date of ethanol
production will not occur until the first quarter of 2008. We expect to rely on
cash from operations and debt and equity financing to fund all of the cash
requirements of our business. If our net losses continue, we will experience
negative cash flow, which may hamper current operations and may prevent us from
expanding our business. We may be unable to attain, sustain or increase
profitability on a quarterly or annual basis in the future. If we do not
achieve, sustain or increase profitability, our stock price may decline.

SALES CONCENTRATION

Our revenue will be derived primarily from sales of ethanol. Ethanol competes
with other existing products and other alternative products could also be
developed for use as fuel additives. We expect to be completely focused on the
production and marketing of ethanol and its co-products for the foreseeable
future. We may be unable to shift our business focus away from the production
and marketing of ethanol to other renewable fuels or competing products.
Accordingly, an industry shift away from ethanol or the emergence of new
competing products may reduce the demand for ethanol. A downturn in the demand
for ethanol would significantly and adversely affect our sales and
profitability.

CAPITAL AND DEBT SERVICING REQUIREMENTS

In order to complete the construction of our planned ethanol production
facilities, we will require significant additional funding. We anticipate that
we will need to raise approximately $372.5 million in equity and/or debt
financing to complete construction of our first ethanol production facilities in
Barrie and Sarnia, Ontario. As of May 19, 2006, we have secured $1,475,000 in
equity financing, for which there are 1,475,000 shares issuable. We have no
contracts with, or binding commitments from, any bank, lender or financial
institution for the balance of the capital required. We may not be able to
obtain any funding from one or more investors or lenders, or if funding is
obtained, that it will be on terms that we have anticipated or that are
otherwise acceptable to us. If we are unable to secure adequate financing, or
financing on acceptable terms is unavailable for any reason, we may be forced to
abandon our construction of one or more, or even all, of our planned ethanol
production facilities.

We plan to fund a substantial majority of the construction costs of our planned
ethanol production facilities through the issuance of a significant amount of
debt. As a result, our capital structure will be highly leveraged. Our debt
levels and debt service requirements could have important consequences which
could reduce the value of your investment, including:

- - limiting our ability to borrow additional amounts for operating capital
or other purposes and causing us to be able to borrow additional funds
only on unfavorable terms;

- - reducing funds available for operations and distributions because a
substantial portion of our cash flow will be used to pay interest and
principal on our debt;

- - making us vulnerable to increases in prevailing interest rates;

- - placing us at a competitive disadvantage because we may be
substantially more leveraged than some of our competitors;

- - subjecting all or substantially all of our assets to liens, which means
that there may be no assets left for our stockholders in the event of a
liquidation; and

- - limiting our ability to adjust to changing market conditions, which
could increase our vulnerability to a downturn in our business or
general economic conditions.

If cash flow from the operations was insufficient to pay our debt service
obligations, in the event that we were paying regular dividends, we could be
forced to reduce or eliminate dividends to our stockholders, and/or reduce or
eliminate needed capital expenditures. It is possible that we could be forced to
sell assets, seek to obtain additional equity capital or refinance or
restructure all or a portion of our debt on substantially less favorable terms.
In the event that we are unable to refinance all or a portion of our debt or
raise funds through asset sales, sales of equity or otherwise, we may be forced
to liquidate and you could lose your entire investment.

KEY PERSONNEL

Our success depends, to a significant extent, upon the continued services of
Gord Laschinger, who is our President and Chief Executive Officer. Mr.
Laschinger has developed key personal relationships with our expected suppliers
and customers. We greatly rely on these relationships in the conduct of our
operations and the execution of our business strategies. The loss of Mr.
Laschinger could, therefore, result in the loss of our favorable relationships
with one or more of our suppliers and customers. Although we have entered into
an employment agreement with Mr. Laschinger, that agreement is of limited
duration and is subject to early termination by Mr. Laschinger under certain
circumstances. In addition, we do not maintain "key person" life insurance
covering Mr. Laschinger or any other executive officer. The loss of Mr.
Laschinger could also significantly delay or prevent the achievement of our
business objectives.

COMPETITIVE PRESSURES

The ethanol production and marketing industry is extremely competitive. Many of
our significant competitors in the ethanol production and marketing industry,
such as Archer-Daniels-Midland Company, or ADM, have substantially greater
production, financial, research and development, personnel and marketing
resources than we do. In addition, we are not currently producing any ethanol.
As a result, our competitors, who are presently producing ethanol, may have
greater relative present and future advantages resulting from greater capital
resources and operating history. As a result, our competitors may be able to
compete more aggressively and sustain that competition over a longer period of
time than we could. Our lack of resources relative to many of our significant
competitors may cause us to fail to anticipate or respond adequately to new
developments and other competitive pressures. This failure could reduce our
competitiveness and cause a decline in our market share, sales and
profitability.

MANAGING GROWTH

Our strategy envisions a period of rapid growth that may impose a significant
burden on our administrative and operational resources. The growth of our
business, and in particular, the completion of construction of our planned
ethanol production facilities, will require significant investments of capital
and management's close attention. Our ability to effectively manage our growth
will require us to substantially expand the capabilities of our administrative
and operational resources and to attract, train, manage and retain qualified
management, technicians and other personnel. We may be unable to do so. In
addition, our failure to successfully manage our growth could result in our
sales not increasing commensurately with our capital investments. If we are
unable to successfully manage our growth, we may be unable to achieve our goals.

PRICE FLUCTUATIONS

Should we become involved in reselling Ethanol, we anticipate that our purchases
and sales of ethanol may not always match with sales and purchases of ethanol at
prevailing market prices. We may commit from time to time to the sale of ethanol
to our customers without corresponding and commensurate commitments for the
supply of ethanol from our suppliers, which subjects us to the risk of an
increase in the price of ethanol. We may also commit from time to time to the
purchase of ethanol from our suppliers without corresponding and commensurate
commitments for the purchase of ethanol by our customers, which subjects us to
the risk of a decline in the price of ethanol.

In addition, we may increase inventory levels in anticipation of rising ethanol
prices and decreases inventory levels in anticipation of declining ethanol
prices. As a result, we are subject to the risk of ethanol prices moving in
unanticipated directions, which could result in declining or even negative gross
profit margins for this segment of our business. Accordingly, this segment of
our business would be subject to fluctuations in the price of ethanol and these
fluctuations may result in lower or even negative gross margins and which could
materially and adversely affect our profitability.

LACK OF LONG-TERM ETHANOL ORDERS

We cannot rely on long-term ethanol orders or commitments by our customers for
protection from the negative financial effects of a decline in the demand for
ethanol. The limited certainty of ethanol orders can make it difficult for us to
forecast our sales and allocate our resources in a manner consistent with our
actual sales. Moreover, our expense levels are based in part on our expectations
of future sales and, if our expectations regarding future sales are inaccurate,
we may be unable to reduce costs in a timely manner to adjust for sales
shortfalls. Furthermore, because we expect to depend on a small number of
customers for the vast majority of our sales, the magnitude of the ramifications
of these risks is greater than if our sales were less concentrated within a
larger number of customers. As a result of our lack of long-term ethanol orders
and commitments, we may experience a rapid decline in our sales and
profitability.

LACK OF SUCCESSFUL OPERATING HISTORY

We have not conducted any significant business operations as yet and have been
unprofitable to date. Accordingly, there is no prior operating history by which
to evaluate the likelihood of our success or our contribution to our overall
profitability. We may never complete construction of an ethanol production
facility and commence significant operations or, if we do complete the
construction of an ethanol production facility, it may not be successful in
contributing positively to our profitability.

MARKET PRICE OF ETHANOL IS VOLATILE

The market price of ethanol is dependent on many factors, including the price of
gasoline, which is in turn dependent on the price of petroleum. Petroleum prices
are highly volatile and difficult to forecast due to frequent changes in global
politics and the world economy. The distribution of petroleum throughout the
world is affected by incidents in unstable political environments, such as Iraq,
Iran, Kuwait, Saudi Arabia, the former U.S.S.R. and other countries and regions.
The industrialized world depends critically on oil from these areas, and any
disruption or other reduction in oil supply can cause significant fluctuations
in the prices of oil and gasoline. We cannot predict the future price of oil or
gasoline and may establish unprofitable prices for the sale of ethanol due to
significant fluctuations in market prices. For example, the price of ethanol
declined by approximately 25% from its 2004 average price per gallon in only
five months from January 2005 through May 2005. In recent years, the prices of
gasoline, petroleum and ethanol have all reached historically unprecedented high
levels. If the prices of gasoline and petroleum decline, we believe that the
demand for and price of ethanol may be adversely affected. Fluctuations in the
market price of ethanol may cause our profitability to fluctuate significantly.

We believe that the production of ethanol is expanding rapidly. There are a
number of new plants under construction and planned for construction, both
inside and outside Ontario. We expect existing ethanol plants to expand by
increasing production capacity and actual production. Increases in the demand
for ethanol may not be commensurate with increasing supplies of ethanol. Thus,
increased production of ethanol may lead to lower ethanol prices. The increased
production of ethanol could also have other adverse effects. For example,
increased ethanol production will lead to increased supplies of co-products from
the production of ethanol, such as DDGS and CO2. Those increased supplies could
lead to lower prices for those co-products. Also, the increased production of
ethanol could result in increased demand for corn. This could result in higher
prices for corn and cause higher ethanol production costs and, in the event that
we are unable to pass increases in the price of corn to our customers, will
result in lower profits. We cannot predict the future price of ethanol or DDGS.
Any material decline in the price of ethanol, DDGS or CO2 will adversely affect
our sales and profitability.

GOVERNMENTAL REGULATIONS

Our business is subject to extensive regulation by federal, state and local
governmental agencies. We cannot predict in what manner or to what extent
governmental regulations will harm our business or the ethanol production and
marketing industry in general. For example the recent energy bill signed into
law by President Bush includes a national renewable fuels standard that requires
refiners to blend a percentage of renewable fuels into gasoline. Similar
regulations were recently introduced in Ontario. If changes in government
regulations reduce the demand for ethanol, our sales and profitability may
decline.

The fuel ethanol business benefits significantly from tax incentive policies and
environmental regulations that favor the use of ethanol in motor fuel blends in
the United States. Currently, a gasoline marketer that sells gasoline without
ethanol must pay a federal tax of $0.18 per gallon compared to $0.13 per gallon
for gasoline that is blended with 10% ethanol. Smaller credits are available for
gasoline blended with lesser percentages of ethanol. The repeal or substantial
modification of the federal excise tax exemption for ethanol-blended gasoline
or, to a lesser extent, other federal or state policies and regulations that
encourage the use of ethanol could have a detrimental effect on the ethanol
production and marketing industry and materially and adversely affect our sales
and profitability.

ENVIRONMENTAL REGULATIONS AND PERMIT REQUIREMENTS.

The production of ethanol involves the emission of various airborne pollutants,
including particulates, carbon monoxide, oxides of nitrogen and volatile organic
compounds. We will be subject to extensive air, water and other environmental
regulations in connection with the construction and operation of our planned
ethanol production facilities. We also may be required to obtain various other
water-related permits, such as a water discharge permit and a storm-water
discharge permit, a water withdrawal permit and a public water supply permit. If
for any reason we are unable to obtain any of the required permits, construction
costs for our planned ethanol production facilities are likely to increase. In
addition, the facilities may not be fully constructed at all. It is also likely
that operations at the facilities will be governed by other regulations.
Compliance with regulations may be time-consuming and expensive and may delay or
even prevent sales of ethanol in Ontario or in other jurisdictions.

The production and sale of ethanol is subject to regulation by agencies of the
Federal Government, including, but not limited to, the Environmental Protection
Agency, or the EPA, in the US as well as other agencies in each jurisdiction in
which ethanol is produced, sold, stored or transported. Environmental laws and
regulations that affect our operations, and that are expected to affect our
planned operations, are extensive and have become progressively more stringent.
Applicable laws and regulations are subject to change, which could be made
retroactively. Violations of environmental laws and regulations or permit
conditions can result in substantial penalties, injunctive orders compelling
installation of additional controls, civil and criminal sanctions, permit
revocations and/or facility shutdowns. If significant unforeseen liabilities
arise for corrective action or other compliance, our sales and profitability
could be materially and adversely affected.

CONSTRUCTION RISKS

Delays in the construction of our planned ethanol production facilities or
defects in materials and/or workmanship may occur. Any defects could delay the
commencement of operations of the facilities, or, if such defects are discovered
after operations have commenced, could halt or discontinue operation of a
particular facility indefinitely. In addition, construction projects often
involve delays in obtaining permits and encounter delays due to weather
conditions, fire, the provision of materials or labor or other events. In
addition, changes in interest rates or the credit environment or changes in
political administrations at the federal, provincial, state or local levels that
result in policy change towards ethanol or our project in particular, could
cause construction and operation delays. Any of these events may adversely
affect our sales and profitability.

We may encounter hazardous conditions at or near each of our planned facility
sites, including the Barrie site that may delay or prevent construction of a
particular facility. If we encounter a hazardous condition at or near a site,
work may be suspended and we may be required to correct the condition prior to
continuing construction. The presence of a hazardous condition would likely
delay construction of a particular facility and may require significant
expenditure of resources to correct the condition. If we encounter any hazardous
condition during construction, our sales and profitability may be adversely
affected.

We have based our estimated capital resource needs on a preliminary design for
an ethanol production facility in Sarnia Ontario. Based on this preliminary
budget, we estimated that the construction cost of our Barrie and Sarnia
facilities will be approximately $317 million. The estimated cost of these
facilities is based on preliminary discussions and estimates, but the final
construction cost of the facility may be significantly higher. Any significant
increase in the final construction cost of the facility will adversely affect
our profitability, liquidity and available capital resources.

SUPPLY OF RAW MATERIALS

The production of ethanol requires a significant amount of raw materials and
energy, primarily corn, water, electricity and natural gas. In particular, we
estimate that our Barrie and Sarnia ethanol production facilities will require
approximately 78 million bushels of corn each year and significant and
uninterrupted supplies of water, electricity and natural gas. The prices of
corn, electricity and natural gas have fluctuated significantly in the past and
may fluctuate significantly in the future. In addition, droughts, severe winter
weather and other problems may cause delays or interruptions of various
durations in the delivery of corn to our facilities, reduce corn supplies and
increase corn prices. Local water, electricity and gas utilities may not be able
to reliably supply the water, electricity and natural gas that our Barrie and
Sarnia facilities will need or may not be able to supply such resources on
acceptable terms. In addition, if there is an interruption in the supply of
water or energy for any reason, we may be required to halt ethanol production.
We may not be able to successfully anticipate or mitigate fluctuations in the
prices of raw materials and energy through the implementation of hedging and
contracting techniques. Our hedging and contracting activities may not lower our
prices of raw materials and energy, and in a period of declining raw materials
or energy prices, these hedging and contracting strategies may result in our
paying higher prices than our competitors. In addition, we may be unable to pass
increases in the prices of raw materials and energy to our customers. Higher raw
materials and energy prices will generally cause lower profit margins and may
even result in losses. Accordingly, our sales and profitability may be
significantly and adversely affected by the prices and supplies of raw materials
and energy.

RISKS RELATED TO OUR COMMON STOCK

Riched20 5.50.30.2002;As of May 19, 2006, we had 10,150,000 shares of our common
stock issued and outstanding. In addition, as at May 19, 2006, we have raised
$1,475,000 under the terms of a unit subscription agreement for which 147,500
common shares are issuable. All of these shares were restricted under the
Securities Act of 1933, including 100,000 of those shares beneficially owned, in
the aggregate, by our executive officers, directors and 10% stockholders.

If and when a registration statement covering these shares of common stock is
applied for, and declared effective, holders of these shares will be permitted,
subject to few limitations, to freely sell these shares of common stock. At that
time, sales of substantial amounts of common stock, including shares issued upon
the exercise of stock options or warrants, or in anticipation that such sales
could occur, may materially and adversely affect prevailing market prices for
our common stock. Any adverse effect on the market price of our common stock
could make it difficult for us to raise additional capital through sales of
equity securities at a time and at a price that we deem appropriate.

VOLATILE STOCK PRICE

The market price of our common may fluctuate significantly in the future. The
market price of our common stock may fluctuate in response to one or more of the
following factors, many of which are beyond our control:

- - the volume and timing of the receipt of orders for ethanol from major
customers;
- - competitive pricing pressures;
- - our ability to produce, sell and deliver ethanol on a cost-effective
and timely basis;
- - our inability to obtain construction, acquisition, capital equipment
and/or working capital financing;
- - the introduction and announcement of one or more new alternatives to
ethanol by our competitors;
- - changing conditions in the ethanol and fuel markets;
- - changes in market valuations of similar companies;
- - stock market price and volume fluctuations generally;
- - regulatory developments;
- - fluctuations in our quarterly or annual operating results;
- - additions or departures of key personnel; and
- - future sales of our common stock or other securities.

Furthermore, adverse economic conditions in Ontario and other jurisdictions
could have a negative impact on our results of operations. Demand for ethanol
could also be adversely affected by a slow-down in overall demand for oxygenate
and gasoline additive products. The levels of our ethanol production and
purchases for resale will be based upon forecasted demand. Accordingly, any
inaccuracy in forecasting anticipated revenues and expenses could adversely
affect our business. Furthermore, we recognize revenues from ethanol sales at
the time of delivery. The failure to receive anticipated orders or to complete
delivery in any quarterly period could adversely affect our results of
operations for that period. Quarterly results are not necessarily indicative of
future performance for any particular period, and we may not experience revenue
growth or profitability on a quarterly or an annual basis.

The price at which you purchase shares of our common stock may not be indicative
of the price that will prevail in the trading market. You may be unable to sell
your shares of common stock at or above your purchase price, which may result in
substantial losses to you and which may include the complete loss of your
investment. In the past, securities class action litigation has often been
brought against a company following periods of stock price volatility. We may be
the target of similar litigation in the future. Securities litigation could
result in substantial costs and divert management's attention and our resources
away from our business. Any of the risks described above could adversely affect
our sales and profitability and also the price of our common stock.

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation of disclosure controls and procedures.
- -------------------------------------------------
We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules, regulations and related forms, and
that such information is accumulated and communicated to the our principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.

As of March 31, 2006, we carried out an evaluation, under the supervision and
with the participation of our management, including our principal executive
officer and principal financial officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on this evaluation,
our principal executive officer and principal financial officer concluded that
our disclosure controls and procedures were effective.

Changes in internal controls.
- -----------------------------
There have been no changes in our internal controls or in other factors that
could significantly affect these controls and procedures during the quarter
ended March 31, 2006.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS. To the best knowledge of the officers and directors,
the Company is not a party to any legal proceeding or litigation.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.

ITEM 5. OTHER INFORMATION.

In March, 2006 the Company explored its options to best utilize the
corporation, either through an acquisition of an operating business or to pursue
a startup business of its own. As a result of that review the Company made a
decision to abandon its prior plans to seek to acquire an operating business and
commenced plans to enter into a new business. The new business involves
acquiring land and improvements on which to construct ethanol plants and
marketing ethanol and its byproducts, principally in Ontario and Western New
York.

In that connection, on April 6, 2006, the Company incorporated a wholly
owned subsidiary Northern Ethanol, Inc. in the State of Delaware. On May 3,
2006, the Company merged with Northern Ethanol, Inc. (the "Merger"). The Company
survived the Merger, however adopted the name Northern Ethanol, Inc. The purpose
of this transaction was to effect a name change.

On April 20, 2006, the Company entered into a 45-year lease,including
renewal periods, of an industrial facility located at 1 Big Bay Point Road,
Barrie, Ontario, CANADA. The Company intends to construct its first ethanol
plant at this facility."

On April 12, 2006 and April 21, 2006, respectively, the Company entered
into employment agreements with Gordon Laschinger and Ciaran Griffin to serve as
the Company's Chief Executive Officer and Chief Financial Officer. Under Mr.
Laschinger's agreement, which is for a term of three years, Mr. Laschinger is to
receive a monthly salary of $15,000, subject to applicable statutory deductions.
Mr. Laschinger's monthly salary shall increase to $25,000 coincident with
completion of construction financing allowing for construction of the first
plant. In addition, his monthly salary shall further increase to $40,000
coincident with of the commencement of production of the first plant. Mr.
Laschinger shall also be entitled to an annual bonus up to fifty percent (50%)
of his annual compensation. The amount of such bonus shall be determined by the
Board of Directors having regard to its financial performance and his individual
performance. Mr. Laschinger also received a stock grant of 2,000,000 shares
exercisable at $1.00 per share (after giving effect to a 10 for 1 stock split
which is under consideration), vesting equally over eight quarters.

Under Mr. Griffin's agreement, which is for a term of three years, Mr.
Griffin is to receive a monthly salary of $5,000, subject to applicable
statutory deductions. Mr. Griffin shall also be entitled to an annual bonus up
to fifty percent (50%) of his annual compensation. The amount of such bonus
shall be determined by the Board of Directors having regard to its financial
performance and his individual performance. Mr. Griffin also received a stock
grant of 500,000 shares exercisable at $1.00 per share (also on a post-split
basis), vesting equally over twenty-four months. Mr. Griffin is not obligated to
devote full time to the Company's business. Mr. Griffin expects to devote 50% of
his time to the business of the Company.

The Company entered into an operating lease for its executive offices
located at 193 King Street East, Suite 300, Toronto, Ontario.

As a result of these actions, the Company is no longer a "shell
company" as defined by Rule 12b-2 of the Securities Exchange Act of 1933, as
amended (the "Securities Act"). The information required by Form 10-SB is
provided in Part 1, Item 2, Management's Discussion and Analysis or Plan of
Operations, and in this Item 5.

ITEM 6. EXHIBITS.

Index to Exhibits

Exhibit Description
------- -----------

*3.1 Certificate of Incorporation

3.2 Corrected Certificate of Ownership and Merger

*3.3 By-laws

10.1 Description Lease dated April 01, 2006 for proposed
Barrie facility a land are of approximately 30 acres

10.2 Description Lease dated April 11, 2006 for Toronto
offices

10.3 Employment Agreement of Gordon Laschinger dated April
12, 2006

10.4 Employment Agreement of Ciaran Griffin dated April 21,
2006

31.1 Certification of the Company's Principal Executive
Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, with respect to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended March 31,
2006

31.2 Certification of the Company's Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, with respect to the registrant's Quarterly
Report on Form 10-QSB for the quarter ended March 31,
2006

32.1 Certification of the Company's Principal Executive
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes Oxley Act of
2002

32.2 Certification of the Company's Principal Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes Oxley Act of
2002

* Filed as an exhibit to the Company's registration statement on Form
10-SB/A, as filed with the Securities and Exchange Commission on
November 10, 2005, and incorporated herein by this reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused the Report to be signed on its behalf by
the undersigned thereunto duly authorized.

Dated: May 23, 2006 NORTHERN ETHANOL, INC.

By: /s/ Ciaran Griffin
---------------------------------
Ciaran Griffin
Chief Financial Officer