Table of Contents
 
 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 10-Q
 
 x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended:  September 30, 2008
 
 o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from  ______________   to  _______________                              
 
Commission file number 000-29219
 
SINOCUBATE, INC.
(Exact name of registrant as specified in its charter)

Nevada
   
98-0199508
(State or other jurisdiction of incorporation or organization)
   
(IRS Employer Identification No.)

65 Broadway, Suite 501
New York, New York
 
10006
(Address of principal executive offices)
 
(Zip Code)

Issuer’s telephone number
 
(212) 359 4300

SYNTHENOL INC
Suite 206 – 388 Drake Street
Vancouver, British Columbia, Canada V6B 6A8
(Former name, former address and former fiscal year, if changed since last report)

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

 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer
  o
Accelerated Filer
  o
Non Accelerated Filer
  o
Smaller Reporting Company
  x

 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes
  o
No   x
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 
 


-1-
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 
Yes
  o
No           o    Not Applicable

 
APPLICABLE ONLY TO CORPORATE ISSUERS
 
The number of shares of common stock outstanding as of October 16, 2008 was 995,655.
 
-2-

 
SINOCUBATE, INC.
 
FORM 10-Q
 
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-3-

 
PART I – FINANCIAL INFORMATION
 
FINANCIAL STATEMENTS
 
 
 
 
 
SINOCUBATE, INC.
 
(A Development Stage Company)
 
CONSOLIDATED FINANCIAL STATEMENTS
 
September 30, 2008
 
Unaudited
 
 
-4-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
 
   
September 30,
 
December 31,
 
   
2008
 
2007
 
ASSETS
 
Unaudited
     
Current
 
  
 
 
 
Cash
 
$
 
$
66,273
 
 
         
LIABILITIES AND STOCKHOLDERS’ DEFICIT
         
 
         
Current
         
Accounts payable and accrued liabilities
 
$
 
$
133,508
 
Notes payable (Notes 3)
   
   
309,079
 
 
         
   
--
   
442,587
 
 
         
Capital stock
         
Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding
         
Common stock, $0.01 par value, 100,000,000 shares authorized 995,655 shares issued and outstanding
   
9,956
   
7,315
 
Treasury stock
   
   
(270
)
Additional paid-in capital
   
2,241,681
   
1,974,187
 
Accumulated other comprehensive income
   
6,018
   
5,213
 
Deficit
   
(1,305,454
)
 
(1,305,454
)
Deficit accumulated during the development stage
   
(952,201
)
 
(1,057,305
)
 
         
   
   
(376,314
)
 
         
 
$
 
$
66,273
 
 
 
SEE ACCOMPANYING NOTES
 
-5-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
 
 
 
Three months ended
 
Nine months ended
 
January 1, 2004 (Date of Inception of the
Development Stage) to
 
 
 
September 30,
 
September 30
 
September 30,
 
 
 
2008
 
2007
 
2008
 
2007
 
2008
 
General and administrative expenses
 
 
 
 
 
 
 
 
 
 
 
Amortization
 
$
 
$
 
$
 
$
 
$
27,077
 
Bad debt
   
   
   
   
   
525
 
Corporate promotion
   
   
   
   
   
13,920
 
Finance charges
   
10
   
   
16,112
   
7,034
   
27,397
 
Insurance
   
   
   
   
   
15,901
 
Interest on notes payable
   
3,234
   
   
11,220
   
   
34,648
 
Management and consultant fees
   
14,774
   
26,850
   
65,755
   
78,764
   
290,354
 
Office supplies and services
   
91
   
4,739
   
3,428
   
319
   
49,845
 
Professional fees
         
2,602
   
18,810
   
22,659
   
254,017
 
Rent
   
   
   
   
   
16,311
 
Wages
   
   
   
   
   
84,258
 
 
                       
Loss before other items
   
(18,109
)
 
(34,191
)
 
(130,325
)
 
(108,776
)
 
(814,253
)
 
                       
Other items
                       
Loss on disposition of equipment
   
   
   
   
   
(15,028
)
Write-down of intangible assets
   
   
   
   
   
(50,001
)
Write-off of payables
   
37,040
   
   
73,607
   
   
73,607
 
Write-off of notes payable
   
   
   
   
   
14,823
 
Gain on settlement of lawsuit
   
   
   
   
   
44,445
 
Gain on sale of investment
   
31,874
   
   
31,874
   
   
31,874
 
Other income
   
36,512
   
   
36,512
   
   
36,512
 
 
                       
Income (loss) from continuing operations
   
87,317
   
(34,191
)
 
26,668
   
(108,776
)
 
(678,021
)
 
                       
Gain (Loss) discontinued operations
         
   
78,436
   
(1,300
)
 
(274,180
)
 
                       
Net income (loss)
 
$
87,317
 
$
(34,191
)
$
105,104
 
$
(110,076
)
$
(952,201
)
 
                       
Basic and diluted loss per common share
 
$
0.12
 
$
(0.05
)
$
0.15
 
$
(0.15
)
 
 
 
                       
Weighted average number of common share outstanding - basic and diluted
   
752,039
   
731,521
   
709,866
   
731,521
   
 
 
                       
Comprehensive loss
                       
Net income (loss)
 
$
87,317
 
$
(34,191
)
$
105,104
 
$
(110,076
)
$
(952,201
)
Foreign currency translation adjustment
   
(15
)
 
(10,177
)
 
805
   
(16,837
)
 
6,018
 
Total comprehensive loss
 
$
87,302
 
$
(44,368
)
$
105,909
 
$
(126,913
)
$
(946,183
)
 
 
SEE ACCOMPANYING NOTES
 
-6-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
 
                 
January 1, 2004
 
                 
(Date of Inception
 
                 
of the Development
 
     
Nine months ended
   
Stage) to
 
     
September 30,
   
September 30,
 
     
2008
   
2007
   
2008
 
Cash flows from operating activities                    
Net income (loss)
 
$
105,104
 
$
(110,076
)
$
(952,201
)
Adjustments to reconcile net loss to net cash used in operating activities:
                 
Finance charges
   
16,102
   
   
27,387
 
Accrued interest on notes payable
   
7,986
   
83,619
   
31,414
 
Amortization
   
   
   
27,077
 
Accrued Expense
   
17,306
   
   
17,306
 
Foreign exchange effect on notes payable
   
(2,798
)
 
   
5,303
 
Issuance of common stock for services
         
   
1,000
 
Stock-based compensation
         
   
4,460
 
Loss on disposition of equipment
         
   
225,184
 
Write-down of intangible assets
         
   
360,001
 
Write-off of payables
   
(73,607
)
 
   
(73,607
)
Write-off of notes payable
         
   
(18,729
)
Gain on settlement of lawsuit
         
   
(44,445
)
Gain on sale of subsidiaries
   
(78,436
)
     
(108,121
)
Gain on Sale of investment (Note 5)
   
(31,874
)
       
(31,874
)
Other Income
   
(36,512
)
       
(36,512
)
Changes in non-cash working capital items:
               
Prepaid expenses and deposits
         
       
Accounts payable and accrued liabilities
   
10,013
 
 
4,578
   
143,521
 
 
                 
Cash used in continuing operations
   
(66,716
)
 
(21,879
)
 
(422,837
)
Discontinued operations (Note 5)
   
(362
)
 
   
(171,213
)
 
               
Net cash used in operating activities
   
(67,078
)
 
(21,879
)
 
(594,050
)
 
                 
Cash flows from investing activities
                 
Proceeds from sale of subsidiary
         
   
1
 
Proceeds from assets disposition
   
   
   
5,458
 
Purchase of equipment
         
   
(5,808
)
Net cash used in investing activities
   
   
   
(349
)
 
                 
Cash flows from financing activities
                 
Settlement of notes payable
   
   
30,000
   
398,614
 
Proceeds from issuance of common stock
   
   
   
1000
 
 
               
Net cash provided by financing activities
   
   
30,000
   
399,614
 
 
                 
Effect of exchange rate changes on cash
   
805
   
(6,673
)
 
(14,734
)
 
               
Change in cash and cash equivalents
   
(67,078
)
 
(8,716
)
 
(209,518
)
 
               
Cash, beginning
   
66,273
   
13,462
   
209,518
 
 
               
Cash, ending
 
$
 
$
4,746
 
$
 
Supplemental cash flow information
 
 
SEE ACCOMPANYING NOTES
 
-7-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
Unaudited
 
                                               
Deficit
       
                                   
Accumulated
         
Accumulated
       
                       
Additional
         
Other
         
During the
       
     
Common Shares
   
Treasury
   
Paid-in
   
Subscriptions
   
Comprehensive
         
Development
       
     
Number
   
Amount
   
Stock
   
Capital
   
Received
   
Income
   
Deficit
   
Stage
   
Total
 
                                                         
May 3, 1989 ( Inception) through December 31, 1997
   
60,022
 
$
600
 
$
 
$
9,400
 
$
 
$
 
$
(10,000
)
$
 
$
 
Net loss
   
   
   
   
   
   
   
(148,931
)
 
   
(148,931
)
Shares issued for cash
   
180,000
   
1,800
   
   
148,200
   
2,000
   
   
   
   
152,000
 
Balance at December 31, 1998
   
240,022
   
2,400
   
   
157,600
   
2,000
   
   
(158,931
)
 
   
3,069
 
Net loss
   
   
   
   
   
   
   
(511,587
)
 
   
(511,587
)
Foreign currency translation adjustment
   
   
   
   
   
   
(14,130
)
 
   
   
(14,130
)
Share issued for services
   
15,000
   
150
   
   
124,850
   
   
   
   
   
125,000
 
Subscription receivable
   
12,000
   
120
   
   
99,880
   
8,000
   
   
   
   
108,000
 
Share issued for intangible assets
   
15,000
   
150
   
   
124,850
   
   
   
   
   
125,000
 
Balance at December 31, 1999
   
282,022
   
2,820
   
   
507,180
   
10,000
   
(14,130
)
 
(670,518
)
 
   
(164,648
)
Net loss
   
   
   
   
   
   
   
(339,063
)
 
   
(339,063
)
Foreign currency translation adjustment
   
   
   
   
   
   
18,885
   
   
   
18,885
 
Shares issued for cash
   
21,600
   
216
   
   
259,784
   
   
   
   
   
260,000
 
Shares issued for settlement of debt
   
4,500
   
45
   
   
174,955
   
   
   
   
   
175,000
 
Subscription receivable
   
600
   
6
   
   
9,994
   
(200
)
 
   
   
   
9,800
 
Subscription received
   
30,000
   
300
   
   
499,700
   
(9,350
)
 
   
   
   
490,650
 
Stock option benefit
   
   
   
   
14,235
   
   
   
   
   
14,235
 
Balance at December 31, 2000
   
338,722
   
3,387
   
   
1,465,848
   
450
   
4,755
   
(1,009,581
)
 
   
464,859
 
Net loss
   
   
   
   
   
   
   
375,621
   
   
375,621
 
Foreign currency translation adjustment
   
   
   
   
   
   
13,629
   
   
   
13,629
 
Shares issued for cash
   
300
   
3
   
   
2,247
   
   
   
   
   
2,250
 
Subscription received
   
   
   
   
   
200
   
   
   
   
200
 
Stock option benefit
   
   
   
   
118,920
   
   
   
   
   
118,920
 
Repurchase of common stock for treasury
   
   
   
(270
)
 
(6,611
)
 
   
   
   
   
(6,881
)
Balance at December 31, 2001
   
339,022
   
3,390
   
(270
)
 
1,580,404
   
650
   
18,384
   
(633,960
)
 
   
968,598
 
Net loss
   
   
   
   
   
   
   
(63,864
)
 
   
(63,864
)
Foreign currency translation adjustment
   
   
   
   
   
   
(1,155
)
 
   
   
(1,155
)
Shares issued for cash
   
4,500
   
45
   
   
33,705
   
   
   
   
   
33,750
 
Balance at December 31, 2002
   
343,522
 
$
3,435
 
$
(270
)
$
1,614,109
 
$
650
 
$
17,229
 
$
(697,824
)
$
 
$
937,329
 
 
 
SEE ACCOMPANYING NOTES
 
-8-




SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
Unaudited
 
                                               
Deficit
       
                                   
Accumulated
         
Accumulated
       
                       
Additional
         
Other
         
During the
       
     
Common Shares
   
Treasury
   
Paid-in
   
Subscriptions
   
Comprehensive
         
Development
       
     
Number
   
Amount
   
Stock
   
Capital
   
Received
   
Income
   
Deficit
   
Stage
   
Total
 
                                                         
Balance at December 31, 2002
   
343,521
   
3,435
   
(270
)
 
1,614,109
   
650
   
17,229
   
(697,824
)
 
   
937,329
 
Net loss
   
   
   
   
   
   
   
(607,630
)
 
   
(607,630
)
Foreign currency translation adjustment
   
   
   
   
   
   
1,752
   
   
   
1,752
 
Stock option benefit
   
   
   
   
11,800
   
   
   
   
   
11,800
 
Cancellation of agreement
   
   
   
   
   
(650
)
 
   
   
   
(650
)
Share issues for cash on exercise of options
   
12,000
   
120
   
   
11,880
   
   
   
   
   
12,000
 
Share issues for consulting services
   
45,000
   
450
   
   
49,675
   
   
   
   
   
50,125
 
Share issues for intangible assets
   
60,000
   
600
   
   
104,400
   
   
   
   
   
105,000
 
Share issued for software
   
60,000
   
600
   
   
53,400
   
   
   
   
   
54,000
 
Balance at December 31, 2003
   
520,521
   
5,205
   
(270
)
 
1,845,264
   
   
18,981
   
(1,305,454
)
 
   
563,726
 
Net loss
   
   
   
   
   
   
   
   
(795,364
)
 
(795,364
)
Foreign currency translation adjustment
   
   
   
   
   
   
(238
)
 
   
   
(238
)
Stock-based compensation
   
   
   
   
4,460
   
   
   
   
   
4,460
 
Shares issued for cash on exercise of options
   
1,000
   
10
   
   
990
   
   
   
   
   
1,000
 
Share issued for debt
   
140,000
   
1,400
   
   
68,600
   
   
   
   
   
70,000
 
Share issued for consulting services
   
2,000
   
20
   
   
980
   
   
   
   
   
1,000
 
Balance at December 31, 2004
   
663,522
   
6,635
   
(270
)
 
1,920,294
   
   
18,743
   
(1,305,454
)
 
(795,364
)
 
(155,416
)
Net loss
   
   
   
   
   
   
   
   
(54,416
)
 
(54,416
)
Foreign currency translation adjustment
   
   
   
   
   
   
(702
)
 
   
   
(702
)
Share issues for consulting services
   
18,000
   
180
   
   
8,820
   
   
   
   
   
9,000
 
Balance at December 31, 2005
   
681,522
   
6,815
   
(270
)
 
1,929,114
   
   
18,041
   
(1,305,454
)
 
(849,780
)
 
(201,534
)
Net loss
   
   
   
   
   
   
   
   
(36,575
)
 
(36,575
)
Foreign currency translation adjustment
   
   
   
   
   
   
563
   
   
   
563
 
Share issues for debt
   
50,000
   
500
   
   
24,500
   
   
   
   
   
25,000
 
Balance at December 31, 2006
   
731,522
 
$
7,315
 
$
(270
)
$
1,953,614
 
$
 
$
18,604
 
$
(1,305,454
)
$
(886,355
)
$
(212,546
)
 
 
SEE ACCOMPANYING NOTES
 
-9-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY
Unaudited
 
                                               
Deficit
       
                                   
Accumulated
         
Accumulated
       
                       
Additional
         
Other
         
During the
       
     
Common Shares
   
Treasury
   
Paid-in
   
Subscriptions
   
Comprehensive
         
Development
       
     
Number
   
Amount
   
Stock
   
Capital
   
Received
   
Income
   
Deficit
   
Stage
   
Total
 
                                                         
Balance at December 31, 2006
   
731,522
 
$
7,315
 
$
(270
)
$
1,953,614
 
$
 
$
18,604
 
$
(1,305,454
)
$
(886,355
)
$
(212,546
)
Net loss
   
   
   
   
   
   
   
   
(170,950
)
 
(170,950
)
Discount on notes payable
   
   
   
   
20,573
   
   
   
   
   
20,573
 
Foreign currency translation adjustment
   
   
   
   
   
   
(13,391
)
 
   
   
(13,391
)
Balance at December 31, 2007
   
731,522
   
7,315
   
(270
)
 
1,974,187
   
   
5,213
   
(1,305,454
)
 
(1,057,305
)
 
(376,314
)
Issuance of new shares
   
284,637
   
2,846
   
   
267,559
   
   
   
   
   
270,405
 
Cancellation of shares
   
(20,504
)
 
(205
)
 
270
   
   
   
   
   
   
65
 
Shares cancelled
   
   
   
   
-65
   
   
   
   
   
-65
 
Net income
   
   
   
   
   
   
   
   
105,104
   
105,103
 
Foreign currency translation adjustment
   
   
   
   
   
   
805
   
   
   
806
 
Balance at September 30, 2008 (Unaudited)
   
995,655
 
$
9,956
 
$
 
$
2,241,681
 
$
 
$
6,018
 
$
(1,305,454
)
$
(952,201
)
$
 
 
 
SEE ACCOMPANYING NOTES
 
-10-

 
 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS FROM DISCONTINUED OPERATIONS
(Unaudited)
 
                 
January 1, 2004
 
                 
(Date of
 
                 
Inception of the
 
                 
Development
 
     
Nine months ended
   
Stage) to
 
     
September 30,
   
September 30,
 
     
2008
   
2007
   
2008
 
                     
Amortization
 
$
 
$
 
$
57,051
 
Bad debts
   
   
   
20,388
 
Management and consulting fees
   
   
   
57,557
 
Professional fees
   
   
   
5,606
 
Office supplies and services
   
362
   
1,300
   
16,193
 
Rent
   
   
   
17,269
 
Royalty, software and advertising
   
   
   
69,251
 
Wage
   
   
   
105,659
 
 
             
Write-down of intangible assets
   
   
   
(155,000
)
Forgiveness of debts
   
   
   
359,008
 
Loss on disposition of equipment
   
   
   
(105,078
)
Incidental revenue
   
   
   
33,043
 
 
             
Operating income (loss) from discontinued operations
   
(362
)
 
(1,300
)
 
131,973
 
 
             
Gain on disposition of subsidiary
   
78,436
   
   
108,121
 
 
             
Net income (loss)
 
$
78,074
 
$
(1,300
)
$
(108,880
)
 
             
 
SEE ACCOMPANYING NOTES
 
-11-

 
SINOCUBATE, INC.
(formerly known as Synthenol Inc.)
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2008
Unaudited
 
Note 1
Interim Financial Statements
 
The foregoing unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q as promulgated by the Securities and Exchange Commission or the SEC.  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements. The accompanying unaudited financial statements and related notes should be read in conjunction with the audited consolidated financial statements and the Form 10-KSB of the Company for the year ended December 31, 2007.  In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.
 
The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
 
Note 2
Nature and Continuance of Operations
 
The Company was incorporated under the laws of the State of Florida on May 3, 1989 as Sparta Ventures Corp. and remained inactive until June 27, 1998.  The name of the Company was changed to Thermal Ablation Technologies Corporation on October 8, 1998 and then to Poker.com, Inc. on August 10, 1999.  On September 15, 2003, the Company changed its name to LegalPlay Entertainment Inc. and on November 8, 2006, the name of the Company was changed to Synthenol Inc.  The Company’s business through December 31, 2003 was primarily related to the operations of online gaming.  In 2004, the Company discontinued the online gaming operations and redirected its business strategy to acquisition and marketing of new poker software to on-line gaming websites worldwide.  The Company is a development stage company as defined by Statement of Financial Accounting Standards or SFAS No. 7, “Development Stage Enterprises.”
 
On August 15, 2008, pursuant to a stock purchase agreement, Viking Investments Group LLC or Viking acquired 366,520 shares of the Company’s common stock from certain of the Company’s stockholders for $350,000 in cash of which amount $66,599.96 was used pay off certain outstanding accounts payable of the Company.  In addition, certain promissory notes and debt in the aggregate principal amount of $243,500 owed to the selling stockholders by the Company were assigned by the stockholders to Viking as reported on a Current Report on Form 8-K filed with the SEC on August 21, 2008.  The shares acquired by Viking represented approximately 50.1% of the Company’s then issued and outstanding capital stock calculated on a fully-diluted basis and the sale of the shares represented a change of control of the Company.
 
On September 29, 2008, the Board of Directors of the Company ratified the cancellation shares previously held by the Company in its treasury under certificate numbers 2057 (5,000 shares) and 2075 (15,504 shares) under the names of LegalPlay Entertainment and Poker.Com Corp., respectively, former predecessor entities of the Company.  The cancellation of the shares, which were effective on September 23, 2008, has reduced the number of issued and outstanding shares by 20,504 shares.
 
Effective November 3, 2008, the Company merged with and into its wholly-owned subsidiary, SinoCubate, Inc., a newly formed Nevada corporation, which remains the surviving entity of the merger.  SinoCubate was formed in the State of Nevada on September 11, 2008.  The merger has resulted in a change of name of the Company from Synthenol, Inc. to SinoCubate, Inc. and a change in the state of incorporation of the Company from Florida to Nevada.  Pursuant to the terms of an agreement and plan of merger dated September 29, 2008 (attached as exhibit to a Definitive Information Statement on Schedule 14C filed with the SEC on October 14, 2008) and effective as of November 3, 2008, SinoCubate possesses all the rights, privileges, powers of the Company, and the Company’s assets, debts and liabilities are now assets, debts and liabilities of SinoCubate.  In addition, all the issued and outstanding shares of common stock of the Company will be automatically converted into shares of SinoCubate common stock at the rate of one share of SinoCubate common stock, par value $0.001 per share, for one share of
 
-12-

 
common stock, par value $0.01 per share, of the Company.  The articles of incorporation and bylaws of SinoCubate now govern the Company.
 
The new management of the Company has decided to abandon the previous operations of the Company and to, instead, focus on a new business strategy pursuant to which the Company  will seek to enter into contractual arrangements with PRC entities that enables the Company to either purchase outright the assets and/or business operations of the PRC entities or to enter into business arrangements, such as joint ventures or similar combinations with the PRC entities to manage and operate such entities.
 
As of the date of this Report, the Company has not entered into an agreement with any PRC entity and there can be no assurance that the Company will ever be able to identify and enter into an agreement with a PRC entity or whether, if the Company successful enters into an agreement with a suitable PRC entity, such combination may become successful and/or profitable.
 
These interim financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.  Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At September 30, 2008, the Company had not yet achieved profitable operations, has accumulated losses of $2,257,655 during its development stage and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.  The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances; however there is no assurance of additional funding being available.
 
Note 3
Debt Conversion
 
On September 22, 2008, the Company entered into an agreement with Viking, its majority shareholder, relating to the issuance of 284,637 new shares of the Company’s common stock to Viking in exchange for the release of Synthenol by Viking from an obligation to repay certain outstanding promissory notes and debt of Synthenol owing to Viking in the aggregate amount of $270,405 (inclusive of principal and interest) as reported on a Current Report on Form 8-K filed with the SEC on September 24, 2008.  The amount of the newly issued shares was determined by dividing $270,405 by $0.95 which price is equal to the price per share Viking paid for certain shares of Synthenol common stock pursuant to a stock purchase agreement dated as of August 15, 2008 described under Note 2.
 
Note 4           Related Party Transaction
 
On September 22, 2008, the Company entered into an agreement with Viking, its majority shareholder, relating to the issuance of 284,637 new shares of the Company’s common stock to Viking in exchange for the release of Synthenol by Viking from an obligation to repay certain outstanding promissory notes and debt of Synthenol owing to Viking in the aggregate amount of $270,405 (inclusive of principal and interest) as reported on a Current Report on Form 8-K filed with the SEC on September 24, 2008.  The amount of the newly issued shares was determined by dividing $270,405 by $0.95 which price is equal to the price per share Viking paid for certain shares of Synthenol common stock pursuant to a stock purchase agreement dated as of August 15, 2008 described under Note 2.
 
-13-

 
Note 5
Discontinued Operations
 
On April 1, 2008, the Company entered into an agreement with an unrelated third party, Ryerson Corporation A.V.V. or Ryerson, to sell the issued and outstanding shares of its wholly-owned subsidiaries, 564448 BC Ltd. or 564448 and Casino Marketing S.A. or CMSA for consideration of $1. All inter-company debts between CMSA, 564448 and the Company was cancelled. As part of the agreement, Ryerson also assumed all of the liabilities of CMSA and 564448. As such, the Company recognized a gain on the disposition of the subsidiaries.
 
Proceeds
 
$
1
 
Liabilities assumed by purchaser of Casino Marketing S.A.
   
8,169
 
Liabilities assumed by purchaser of 564448 BC Ltd.
   
70,267
 
         
Gain on sale of subsidiaries
   
78,437
 
 
On July 11, 2008, the Company assigned a 6% carried interest it held in Thermal Ablations Technology Canada to Hokley Limited in exchange for the cancelation of a promissory note held by Hokley in the principal amount of $30,000 plus interest, which was due and payable on May 15, 2008.
 
Note 6           Subsequent event
 
On November 3, 2008, the merger of the Company with and into its wholly-owned subsidiary, SinoCubate, Inc., a newly formed Nevada corporation, became effective.  SinoCubate is the surviving entity and the merger resulted in a change of name of the Company from Synthenol, Inc. to SinoCubate, Inc. and a change in the state of incorporation of the Company from Florida to Nevada.  By virtue of the merger, SinoCubate possesses all the rights, privileges, powers of the Company, and the Company’s assets, debts and liabilities are now assets, debts and liabilities of SinoCubate.  In addition, all the issued and outstanding shares of common stock of the Company will be automatically converted into shares of SinoCubate common stock at the rate of one share of SinoCubate common stock, par value $0.001 per share, for one share of common stock, par value $0.01 per share, of the Company.  The articles of incorporation and bylaws of SinoCubate now govern the Company.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
In preparing the management’s discussion and analysis, the registrant presumes that you have read or have access to the discussion and analysis for the proceeding fiscal year.
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”).   All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earning, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions of performance; and statements of belief; and any statements of assumptions underlying any of the foregoing.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: our ability to raise capital and the terms thereof; ability to gain an adequate player base to generate the expected revenue; competition with established gaming websites; adverse changes in government regulations or polices; and other factors referenced in the Form 10-Q.
 
The use in this Form 10-Q of such words as “believes”, “plans”, “anticipates”, “expects”, “intends”, and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements present the Company’s estimates and assumptions only as of the date of this report.  Except for the Company’s ongoing obligation to disclose material information as required by the federal securities laws, the Company does not intend, and undertakes no obligation, to update any forward-looking statements.
 
Although the Company believes that the expectations reflected in any of the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed or any of the Company’s forward-looking statements.  The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties.
 
-14-

 
PLAN OF OPERATIONS
 
The new management of the Company has decided to abandon the previous operations of the Company and to, instead, focus on a new business strategy pursuant to which the Company  will seek to enter into contractual arrangements with PRC entities that enables the Company to either purchase outright the assets and/or business operations of the PRC entities or to enter into business arrangements, such as joint ventures or similar combinations with the PRC entities to manage and operate such entities.
 
As of the date of this Report, the Company has not entered into an agreement with any PRC entity and there can be no assurance that the Company will ever be able to identify and enter into an agreement with a PRC entity or whether, if the Company successful enters into an agreement with a suitable PRC entity, such combination may become successful and/or profitable.
 
The Company is in immediate need of further working capital and options are being explored with respect to financing in the form of debt, equity or a combination thereof.
 
RESULTS OF CONTINUING OPERATIONS
 
The following discussion of the financial condition and results of operation of the Company should be read in conjunction with the Financial Statements and the related Notes included elsewhere in this report.
 
Nine months ended September 30, 2008 compared to Nine months ended September 30, 2007
 
REVENUES. The Company had no net sales for the nine months ended September 30, 2008 and 2007.
 
EXPENSES.  Operating expenses for the nine months ended September 30, 2008 were $130,325 compared to $108,776 for the nine months ended September 30, 2007.  The major increase in expense for the nine months ended September 30, 2008 was the $16,112 for financial charge and $11,220 for interest on notes payable, as compared to none for the nine months ended September 30, 2007.
 
FINANCIAL CONDITION AND LIQUIDITY
 
As of September 30, 2008 we had no cash compared to $66,273 at December 31, 2007.
 
The ability of the Company to continue as a going concern and fund its operations through the remainder of 2008 is contingent upon being able to raise funds through either equity or debt financing or a combination of both.  The Company is not currently pursuing or negotiating either financing option, however we believe, but cannot provide assurance, that the Company should be able to obtain financing to fund its liabilities as they come due.
 
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 
We have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements which requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.
 
Although these estimates are based on our knowledge of current events and actions we may undertake in the future, they may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions by us, which have a material impact on our financial condition and results.  Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of our financial statements.  Our critical accounting policies include debt management and accounting for stock-based compensation.  We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities”.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
-15-

 
CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
 
We currently do not maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company. in the reports it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
 
Under the supervision and with the participation of management, including our Chief Executive Officer we have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2008, and, based upon this evaluation, our Chief Executive Officer has concluded that these controls and procedures are effective in providing reasonable assurance of compliance.
 
Changes in Internal Control over Financial Reporting
 
During the nine months ended September 30, 2008, management took steps to improve the internal controls over financial reporting by (1) searching for outside directors to establish an effective audit committee, (2) utilizing existing office staff in order to remedy the segregation of duties deficiencies, (3) writing accounting and financial reporting procedures to comply with the requirements of US GAAP and SEC disclosures, and (4) following the newly written accounting and financial reporting procedures in (3) which tightens the control over the period ends.
 
Management and directors will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing  basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
 
 
PART II--OTHER INFORMATION
 
LEGAL PROCEEDINGS
 
None.
 
RISK FACTORS
 
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
 
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
None.
 
DEFAULTS UPON SENIOR SECURITIES
 
None.
 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
None.
 
OTHER INFORMATION
 
None.
 
-16-

 
EXHIBITS
 
Exhibit Number
Description
2.1*
Agreement and Plan of Merger between Synthenol, Inc. and SinoCubate, Inc dated as of September 29, 2008 [Filed as attachment to an Information Statement on Schedule 14C filed with the SEC on September 30, 2008].
 
10.1*
Stock Purchase Agreement among Synthenol, Inc., certain shareholders of Synthenol, Inc. and Viking Investments Group LLC dated as of August 15, 2008 [Filed as Exhibit 10.1 to a Current Report on Form 8-K filed with SEC on August 21, 2008].
 
31.1
 
31.2
 
32.1
 
99.1*
Letter Agreement between Synthenol, Inc. and Viking Investments Group, LLC dated as of September 22, 2008 [Filed as Exhibit 99.1 to a Current Report on Form 8-K filed with SEC on September 24, 2008]
 
*   Previously filed with SEC
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
SYNTHENOL INC.
(Registrant)
 
/s/ Richard Xu
 
Date: November 19, 2008
Richard Xu
President and Treasurer
   
     
/s/ Tom Simeo
 
Date: November 19, 2008
Tom Simeo
Chief Executive Officer
   
 
 
-17-