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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Washington, D.C. 20549</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>______________________</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FORM 10-Q</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>[ X ] Quarterly Report Pursuant to Section
  13 or 15(d) of the Securities Exchange Act of 1934</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">For the quarterly period ended September
  30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">OR</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>[ ] Transition Report Pursuant to Section
  13 or 15(d) of the Securities Exchange Act of 1934</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">For the transition period from ________ to
  ___________</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Commission file number: <U>333-14477</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B><U>FUELSTREAM, INC.</U></B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Name of Small Business Issuer in Its Charter)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 70.5pt 0 0; text-align: center"><FONT STYLE="letter-spacing: -0.2pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 70.5pt 0 0; text-align: center"><FONT STYLE="letter-spacing: -0.2pt">&nbsp;</FONT></P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
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      <td style="width: 47%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">Delaware</font></td>
      <td style="width: 20%; padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="width: 33%; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">87-0561426</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">(State
          or Other Jurisdiction</font></P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">of Incorporation
          or Organization)</font></P></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">(IRS
          Employer</font></P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="letter-spacing: -0.2pt">Identification
          No.)</font></P></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">510 Shotgun Road, Suite 110</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">Fort Lauderdale, Florida</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: Black 1pt solid; padding-right: -0.9pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">33326</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">(Address of Principal Executive Offices)</font></td>
      <td style="padding-right: 70.5pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif; letter-spacing: -0.2pt">(Zip Code)</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="width: 79%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif"><u>(954) 423-5345</u></font></td>
      <td style="width: 10%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif">(Issuer&rsquo;s Telephone Number)</font></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td>
      <td style="border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font: 10.5pt Times New Roman, Times, Serif">(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 1 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo; Options: Hidden -->&nbsp;<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">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 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 [ ]</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
  to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the preceding 12 months
  (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No []</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.
  See definition of &ldquo;large accelerated filer,&rdquo;&ldquo;accelerated filer,&rdquo; and &ldquo;smaller reporting company in
  Rule 12b-2 of the Exchange Act. (Check one):</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 39%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Large Accelerated Filer [&nbsp;&nbsp;]</font></td>
      <td style="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="width: 43%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Accelerated Filer [&nbsp;&nbsp;]</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Non-Accelerated Filer [&nbsp;&nbsp;]</font></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Smaller reporting company [X]</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Indicate by check mark
  whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPLICABLE ONLY TO ISSUERS INVOLVED IN
  BANKRUPTCY</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROCEEDINGS DURING THE PRECEDING FIVE YEARS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Check whether the registrant
  has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution
  of securities under a plan confirmed by a court. Yes [ ] No [ ]</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>APPLICABLE ONLY TO CORPORATE ISSUERS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">State the number of shares
  outstanding of each of the issuer&rsquo;s classes of common equity, as of the latest practicable date. As of November 7, 2014,
  the Company had outstanding 1,936,589,391 shares of common stock, par value $0.0001 per share.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 2 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>PART
  I</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>FINANCIAL
  INFORMATION</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt">The
  Condensed </FONT>Consolidated <FONT STYLE="letter-spacing: -0.15pt">Financial Statements of the Company are prepared as of
  September 30, 2014. </FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="letter-spacing: -0.15pt"><B>&nbsp;</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="letter-spacing: -0.15pt"><B>ITEM
  1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="letter-spacing: -0.15pt">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <table cellspacing="0" cellpadding="0" style="font: 10.5pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><A NAME="TableOfContents"></A>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>CONTENTS</b></P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>&nbsp;</b></P></td></tr>
  <tr style="vertical-align: top">
      <td style="width: 97%; padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_001">Condensed Consolidated Balance Sheets as of September 30, 2014</A> (unaudited) and December 31,2013
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td>
      <td style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">4</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_002">Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2014 and 2013</A>(unaudited)
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">5</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_003">Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2014 and 2013</A> (unaudited)
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">6</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt">
          <A HREF="#a_004">Notes to the Unaudited Condensed Consolidated Financial Statements</A>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></td>
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">7</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
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  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><A NAME="a_001"></A>Condensed Consolidated Balance Sheets</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="font-size: 10pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><U>ASSETS</U></TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">September 30,</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">December 31,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">(Unaudited)</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">CURRENT ASSETS</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: left; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">60,049</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Accounts receivable, net of allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">68,825</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Current Assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">128,874</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 20pt">TOTAL ASSETS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">128,874</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="9" STYLE="text-decoration: underline; text-align: center">LIABILITIES AND STOCKHOLDERS' DEFICIT</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">CURRENT LIABILITIES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">899,287</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">826,832</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Due to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,037</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,973</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accrued expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,318,492</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">788,771</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Convertible debenture/notes payable - short term (net of</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;&nbsp;discount of $77,122 and $286,751, respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">226,250</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Convertible notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">236,622</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211,254</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,093,382</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,137,041</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,115,870</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Derivative liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">448,019</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">558,548</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Current Liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,549,683</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,877,880</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">LONG TERM LIABILITIES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Convertible debenture/notes payable (net of discount of</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">&nbsp;&nbsp;$-0- and $50,082, respectively)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,918</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Long Term Liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,918</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">TOTAL LIABILITIES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,549,683</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,882,798</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">STOCKHOLDERS' DEFICIT</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 10pt">Preferred stock, $0.0001 par value; 200 shares</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;authorized, 200 and 200 shares issued and outstanding</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 10pt">Common stock, $0.0001 par value; 2,500,000,000</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;and 150,000,000 shares authorized, 1,413,672,725 and</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;37,709,552 shares issued and outstanding, respectively</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,367</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,771</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,362,644</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,126,878</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(58,924,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(55,985,447</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Stockholders' Deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,420,809</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(5,854,798</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 20pt">TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">128,874</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="9" STYLE="text-align: center">The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.</TD></TR>
  </TABLE>
  
  
  
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  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 8pt Arial, Helvetica, Sans-Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="21" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="21" STYLE="text-align: center"><A NAME="a_002"></A>Condensed Consolidated Statements of Operations</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="21" STYLE="text-align: center">(Unaudited)</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center">For the Three Months Ended</TD><TD>&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom">For the Nine Months Ended</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">September 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">NET SALES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">382,073</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">639,661</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">COST OF SALES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">313,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">26,895</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">534,371</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">26,895</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">GROSS MARGIN</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">68,597</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,105</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">105,290</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,105</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;OPERATING EXPENSES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Selling, general and administrative</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">448,022</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">444,265</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,337,944</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,363,113</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Operating Expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">448,022</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">444,265</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,337,944</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,363,113</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">LOSS FROM OPERATIONS</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(379,425</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(441,160</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,232,654</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,360,008</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">OTHER INCOME (EXPENSES)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Gain on conversion of debt</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,843</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112,457</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">(Loss) Gain on change in fair value of derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(319,205</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">70,531</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">209,918</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Interest expense (including amortization of debt discount</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">&nbsp;&nbsp;of $251,768, $233,153, $1,176,353 and $328,716, respectively)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(468,024</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(618,486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,029,094</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,015,940</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Total Other (Expenses)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(739,386</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(547,955</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,706,719</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(807,840</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">LOSS BEFORE INCOME TAXES</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,118,811</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(989,115</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,939,373</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,167,848</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">INCOME TAX EXPENSE</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">NET LOSS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,118,811</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(989,115</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,939,373</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,167,848</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">BASIC AND DILUTED:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 10pt">Net loss per common share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.00</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.04</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.12</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 10pt">Weighted average shares outstanding</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">529,896,732</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,273,334</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">301,807,307</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">17,650,764</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="17" STYLE="text-align: center">The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.</TD></TR>
  </TABLE>
  
  
  
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  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center"><A NAME="a_003"></A>Condensed Consolidated Statements of Cash Flows</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="13" STYLE="text-align: center">(Unaudited)</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom">For the Nine Months Ended</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; vertical-align: bottom">September 30,</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2013</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">CASH FLOWS FROM OPERATING ACTIVITIES:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Net loss</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,939,373</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,167,848</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Adjustments to reconcile net loss to net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">&nbsp;cash used in operating activities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Gain on conversion of debt</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(112,457</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Common stock issued for services</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">175,450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Stock based compensation</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,218</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">654,410</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Operating expenses incurred by noteholders on behalf of the Company</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270,969</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,272</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Non-cash interest expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">336,171</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">333,437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(209,918</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(208,100</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Amortization of debt discounts</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,176,353</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">328,716</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(40,825</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">152,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">982,949</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">515,788</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Due to related parties</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,064</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">59,973</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Net Cash Used in Operating Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(256,399</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(297,352</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">CASH FLOWS FROM INVESTING ACTIVITIES:</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">CASH FLOWS FROM FINANCING ACTIVITIES:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from sale of common stock</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,193</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Net proceeds from notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">421,948</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Net proceeds from notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Payments on notes payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(131,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 20pt">Net Cash Provided by Financing Activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">316,448</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">254,193</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">60,049</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(43,159</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">43,159</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 2.5pt">CASH AND CASH EQUIVALENTS, END OF PERIOD</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,049</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">SUPPLEMENTAL CASH FLOW INFORMATION</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">Cash Payments For:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 20pt">Interest</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">601</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">118</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Income taxes</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Non-cash investing and financing activity:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Initial derivative liability on convertible note payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">803,378</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">540,701</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Beneficial conversion feature on convertible note credited to additional paid in capital</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">435,156</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Common stock issued for settlement of notes payable and accrued interest</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">142,745</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,336,080</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Reclassification from accrued interest to note payable - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">837,370</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Reclassification of note from related party to non-related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Accrued expenses paid by convertible noteholder</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">31,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Common stock issued for the conversion of debt and accrued interest</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,306,009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">73,296</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Common stock issued for the conversion of debt and accrued interest related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">210,784</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Accrued interest converted to notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">131,659</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 20pt">Accounts payable converted to notes payable related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">158,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Extinguished derivative liability on conversion of convertible note payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">703,989</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
      <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD COLSPAN="9" STYLE="text-align: center">The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.</TD></TR>
  </TABLE>
  
  
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><A NAME="a_004"></A>Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 1 -SIGNIFICANT ACCOUNTING POLICIES AND
  NATURE OF OPERATIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><I>Basis of
  Presentation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>&nbsp;</I></B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed consolidated
  financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.
  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally
  accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished
  in the interim consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in
  the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the
  disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim consolidated
  financial statements be read in conjunction with the Company&rsquo;s audited consolidated financial statements and notes thereto
  included in its Form 10-K for the year ended December 31, 2013. Operating results for the nine months ended September 30, 2014
  are not necessarily indicative of the results to be expected for the year ending December 31, 2014. &#9;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Organization and Nature of Operation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Fuelstream, Inc.
  (the &ldquo;Company&rdquo;) was incorporated under the laws of the State of Delaware on July 12, 1996 under the name
  of &ldquo;Durwood, Inc.&rdquo;From April 6, 1999 to April 9,2010, the Company operated as a sports marketing firm under the
  name of &ldquo;Sportsnuts, Inc.&rdquo; On April 9, 2010, the Company changed its name to Fuelstream, Inc. and changed its
  business model to become a fuel transportation and logistics company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 11, 2011, the Company entered
  into a joint venture agreement (&ldquo;Joint Venture&rdquo;) with Aviation Fuel International, Inc., a Florida corporation
  (&ldquo;AFI&rdquo;) and a purchaser and reseller of aviation fuel for commercial and private aircraft. The Joint Venture
  required the Company to contribute up to $200,000 in respect of supplying aviation fuel to various commercial aircraft via
  tanker trucks which were intended to be acquired by the Joint Venture. The Company ultimately contributed $183,500 in
  connection with the Joint Venture. On January 18, 2012, the Joint Venture was terminated upon completion of the acquisition
  of AFI, which is now a wholly-owned subsidiary of the Company (refer to note 3).</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 10, 2012, the Company along
  with two partners formed AFI South Africa LLC (&ldquo;AFI SA&rdquo;), immediately the Company purchased shares of the other
  partners to become 100% owner of AFI SA (refer to note 3). AFI SA was effective as Limited Liability Company under the Act by
  the filing organization with the office of the Secretary of State of Florida on May 11, 2012. The Company has been organized
  for the purpose of partnering with Global Aviation for brokering the sale of Fuel for aircraft in South Africa.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Use of Estimates</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 5pt; text-align: justify">The preparation of unaudited condensed
  consolidated 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 and disclosure of contingent
  assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Revenue Recognition</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in
  accordance with Accounting Standards Codification subtopic 605-10,Revenue Recognition (&ldquo;ASC 605-10&rdquo;)
  which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an
  arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is
  reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature
  of the selling prices of the products delivered and the collectability of those amounts.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">NOTE 1 - SIGNIFICANT ACCOUNTING
  POLICIES AND NATURE OF OPERATIONS (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC605-10 incorporates Accounting
  Standards Codification subtopic 605-25, Multiple-Element Arrangements(&ldquo;ASC 605-25&rdquo;). ASC 605-25 addresses
  accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use
  assets.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Principles of Consolidation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The consolidated financial statements have
  been prepared in accordance with accounting principles generally accepted in the United States (&ldquo;US GAAP&rdquo;) and include
  the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Cash</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company considers cash to consist
  of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into
  cash.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Income Taxes</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted Accounting Standards
  Codification subtopic 740-10, Income Taxes (&ldquo;ASC 740-10&rdquo;) which requires the recognition of deferred tax liabilities
  and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
  tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily
  of timing differences such as deferred officers&rsquo; compensation and stock based compensation accounting.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Net Loss per share</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company complies with accounting and
  disclosure requirements of FASB ASC 260, &ldquo;Earnings Per Share.&rdquo; Net loss per ordinary share is computed by dividing
  net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Common
  share equivalents are excluded from the diluted earnings (loss) per share computation if their effect is anti-dilutive.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Stock based compensation</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company follows Accounting
  Standards Codification subtopic 718-10, Compensation (&ldquo;ASC 718-10&rdquo;) which requires that all share-based payments
  to both employees and non-employees be recognized in the income statement based on their fair values.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Stock based compensation recorded in
  the unaudited condensed consolidated financial statements for the nine months ended September 30, 2014 and 2013 were
  $103,218 and $ 214,859, respectively.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Financial Instruments</I></P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2008, the Company adopted FASB
  ASC 820-10-50, &ldquo;Fair Value Measurements.&rdquo; This guidance defines fair value, establishes a three-level valuation hierarchy
  for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined
  as follows:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: TimesNewRomanPSMT-Identity-H">- </FONT>Level
  1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities inactive
  markets<FONT STYLE="font-family: TimesNewRomanPSMT-Identity-H">.</FONT></P>
  
  <!-- Field: Page; Sequence: 8 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
  AND NATURE OF OPERATIONS (Continued)</P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">- Level 2 inputs to the
  valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are
  observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
  instrument.</P>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">- Level 3 inputs to valuation methodology
  are unobservable and significant to the fair measurement.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in
  the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial
  instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such
  instruments and their expected realization and their current market rate of interest.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I><U>Derivative Liabilities</U></I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company assessed the classification of
  its derivative financial instruments as of September 30, 2014, which consist of convertible instruments and rights to shares of
  the Company&rsquo;s common stock, and determined that such derivatives meet the criteria for liability classification under ASC
  815.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 815 generally provides three criteria
  that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing
  derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks
  of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
  contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
  at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings
  as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
  instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is
  deemed to be conventional, as described.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I><U>Convertible Instruments</U></I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company evaluates and accounts for conversion
  options embedded in its convertible instruments in accordance with professional standards for &ldquo;Accounting for Derivative
  Instruments and Hedging Activities&rdquo;.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Professional standards generally provide
  three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them
  as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics
  and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
  the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
  re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
  in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
  a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be
  conventional as defined under professional standards as &ldquo;The Meaning of &ldquo;Conventional Convertible Debt Instrument&rdquo;.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for convertible instruments
  (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance
  with professional standards when &ldquo;Accounting for Convertible Securities with Beneficial Conversion Features,&rdquo; as those
  professional standards pertain to &ldquo;Certain Convertible Instruments.&rdquo; Accordingly, the Company records, when necessary,
  discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest
  date of</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
  AND NATURE OF OPERATIONS (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">redemption. The Company also records when
  necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 815-40 provides that, among other things,
  generally, if an event is not within the entity&rsquo;s control could or require net cash settlement, then the contract shall be
  classified as an asset or a liability.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Recently adopted accounting pronouncements</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted all applicable recently-issued
  accounting pronouncements.&nbsp;&nbsp;The adoption of the accounting pronouncements, including any not yet effective, is not anticipated
  to have a material effect on the financial position or results of operations of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Reclassification</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>&nbsp;</I></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain reclassifications have been made
  to prior periods' data to conform to the current period's presentation. These reclassifications had no effect on reported income
  or losses</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">NOTE 2 -
  GOING CONCERN CONSIDERATIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accompanying unaudited condensed
  consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going
  concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As
  reported in its Annual Report on Form 10-K for the year ended December 31, 2013, the Company has an accumulated deficit of
  $55,985,447 from inception of the Company through December 31, 2013. It should be noted that prior to the acquisition of AFI
  as discussed in Note 3, the Company had an accumulated deficit of $32,105,264 as reported in its Annual Report on Form 10-K
  for the year ended December 31, 2011. The accumulated deficit as of September 30, 2014 was $58,924,820 and the total
  stockholders&rsquo; deficit at September 30, 2014 was $6,420,809 and had working capital deficit (current liabilities minus
  current assets) of $6,420,809, continued losses and negative cash flows from operations. These factors combined, raise
  substantial doubt about the Company&rsquo;s ability to continue as a going concern. Management&rsquo;s plans to address and
  alleviate these concerns are as follows:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company&rsquo;s management continues
  to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient
  funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by
  way of financial assistance through issuances of additional equity and by generating revenues by brokering the sale of aircraft
  fuel. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to
  management.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The ability of the Company to continue as
  a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
  attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments
  relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that
  might result from the outcome of these uncertainties.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 10 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 3 - ACQUISITION</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 18, 2012 the Company
  completed the acquisition of 100% of the equity of Aviation Fuel International, Inc., a Florida corporation
  (&ldquo;AFI&rdquo;). AFI is a purchaser and reseller of aviation fuel for commercial and private aircraft. The consideration
  for the acquisition of AFI consisted of 7,400,000 shares of restricted common stock, loan receivable adjusted for $183,500
  and a note payable in the amount of $1,000,000. As part of the acquisition, the Company recorded goodwill in the amount of
  $6,000,410 on June 25, 2013. The Company disaffirmed the note payable of $1,000,000. However, until the Company receives a
  judicially approved release, the note payable will remain on the financial statements and is included in the balance sheet as
  of September 30, 2014. Prior to the acquisition, AFI had accumulated notes payable of $1,356,300 and accounts payable of
  $536,610. These liabilities have been recorded in the condensed consolidated balance sheet. These liabilities are due from
  AFI and were not incurred or guaranteed by the parent company, Fuelstream, Inc.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 4 - LOSS CONTINGENCIES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is involved with various legal
  proceedings as described in Part II Item I of this Form 10-Q. The Company has evaluated these contingencies per the requirements
  of ASC 450-20 (previously SFAS 5, &ldquo;Accounting for Contingencies&rdquo;) and determined that the likelihood of loss from these
  proceedings are remote.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">NOTE 5 -
  ACCOUNTS RECEIVABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accounts receivable at September 30,
  2014 and December 31, 2013 are as follow:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, <BR>2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, 2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: justify; padding-bottom: 1pt">Accounts receivable</TD><TD STYLE="width: 8%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">738,826</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">698,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">738,826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">698,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt">Less: allowance on accounts receivable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(670,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(670,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Accounts receivable, net</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">68,826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is involved in disputes with
  $698,000 of the above accounts receivable and has filed a lawsuit.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED
  EXPENSES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The accounts payable of $899,287, as of
  September 30, 2014, includes two parties who are seeking motion for entry for final garnishment judgment. The Company has
  assumed these two accounts payable with the acquisition of AFI (refer to note 3). Per court order interest is calculated at
  rate of 6% per annum on $325,138 on one of the accounts payable and 18% on $192,061 (principal amount) of the second accounts
  payable. Accrued interest on accounts payable balance as of September 30, 2014 and December 31, 2013 is $169,588 and
  $129,028, respectively. Interest expense of $40,560 was charged to expenses during the nine months ended September 30,
  2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% TimesNewRomanPSMT-Identity-H; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 11 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 7 - NOTES PAYABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">Notes payable consisted of the following:</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, <BR>2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: justify; padding-left: 5.4pt">Notes payable, issued on May 6, 2011, unsecured, interest at 10% per annum, due on demand.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">59,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">59,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable, issued on August 25, 2010, unsecured, interest at 10% per annum due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">172,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 18, 2010 to individual, unsecured, interest at 15% per annum, due on demand(1)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 5, 2013 to individual, unsecured, interest at 8%per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 17, 2013 to a company, unsecured, interest at 16% per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on October 4, 2013, January 16, 2014, and January 22, 2014 to a company, unsecured, interest at 8% per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable issued on March 5, 2013 to individual, unsecured, interest at 8% per annum, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Notes payable issued on July 1, 2013 to company, unsecured, interest at 8% per annum, due on demand</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">810</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28,082</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 24.45pt">Total notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,034,610</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,093,382</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 15.45pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,034,610</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,093,382</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 24.45pt">Long-term notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Maturities of notes payable are as follows:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Year Ending September 30,</u></P></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Amount</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,034,610</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;<BR>Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,034,610</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on notes payable as of
  September 30, 2014 was $467,636 and as of December 31, 2013 was $363,507. Interest expense of $106,017 has been charged to
  expenses for the nine months ended September 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10.5pt">This
                                           Note payable was assumed on the acquisition of AFI. The Company is negotiating a settlement
                                           <FONT STYLE="background-color: White">agreement for $786,300, inclusive of all interest
                                           on the date of settlement.</FONT></FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  
  <!-- Field: Page; Sequence: 12 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"></P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in">NOTE 8 -
  CONVERTIBLE DEBENTURE/NOTES PAYABLE</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, <BR>2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                                       <P STYLE="margin-top: 0; margin-bottom: 0">Notes payable issued on March 21, 2012, unsecured, interest included, due on March 21, 2014,convertible into common stock at $1.00 per share (less unamortized debt discount of $-0- and $12,616, respectively)</P></TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">92,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                           <P STYLE="margin-top: 0; margin-bottom: 0">Convertible note issued on March 2013, unsecured, interest at 8%, due on October 05, 2013, in default.</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                           <P STYLE="margin-top: 0; margin-bottom: 0">Convertible note issued on January 2014, unsecured, interest at 8%, due on November 3, 2014 (in default). Unamortized debt discount of $16,375 and $92,011, respectively</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">81,989</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on October 2013, December 2013 and February 2014, unsecured, zero interest if paid on or before 90 days otherwise one time interest charge of 12%, due on October 2, 2015 December 9, 2015 and February 20, 2016. Unamortized debt discount of $4,995 and $50,082, respectively</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,185</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,918</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                           <P STYLE="margin-top: 0; margin-bottom: 0">Convertible note issued on October 2013, unsecured, interest at 6%, due on October 13, 2014 (in default). Unamortized debt discount of $601 and $23,507, respectively</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,311</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,493</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                           <P STYLE="margin-top: 0; margin-bottom: 0">Convertible note issued on December 2013 and January 2014, unsecured, interest at 8%, due on December 12, 2014, July 20, 2014 (in default) and January 30, 2015. Unamortized debt discount of $-0- and $58,299, respectively</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">136,700</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,201</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt"><P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>
                                                           <P STYLE="margin-top: 0; margin-bottom: 0">Convertible note issued on December 2013, unsecured, interest at 6%, due on December 12, 2014. Unamortized debt discount of $-0- and $100,317, respectively</P></TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,183</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on January 2, 2014, unsecured, interest at 10%, due on June 2, 2014 (in default), convertible into common stock at 60% of the bid price on the date of conversion, (less unamortized debt discount of $-0- and $-0-, respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,209</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on April 10, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,669</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 4, 2014, unsecured, interest at 10%, due on May 4, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,679</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on March 31, 2014, unsecured, interest at 8%, due on January 2, 2015. Unamortized debt discount of $31,049 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,451</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="margin: 0">&nbsp;</P>
  
  <!-- Field: Page; Sequence: 13 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="margin: 0"></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt; width: 63%">&nbsp;<BR>Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on September 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">93,000</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 12%">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left; width: 1%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000 (in default). Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $6,250 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on May 16, 2014, unsecured, interest at 8%, due on November 16, 2014 (in default). Unamortized debt discount of $355 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,620</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on June 30, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $705 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,224</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on July 9, 2014, unsecured, interest at 10%, due on February 9, 2015. Unamortized debt discount of $1,851 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,706</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on August 29, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $3,500 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on September 2, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $11,921 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,431</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on September 2, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $15,544 and $-0-, respectively.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,601</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;<BR>Convertible note issued on September 8, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $351 and $-0-, respectively.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,539</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 24.45pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 24.45pt">Total notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,575</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">231,168</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 24.45pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(417,575</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,918</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 24.45pt">Long-term convertible debenture/notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">226,250</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"></P>
  
  <!-- Field: Page; Sequence: 14 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White"><U>Convertible
  note issued March 21, 2012</U></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">On
  March 21, 2012, the Company issued a $250,000 Convertible Promissory Note which is convertible into 250,000 shares of the Company&rsquo;s
  common stock at the holder&rsquo;s option, or $1.00 per share, and there is no fluctuation in this conversion rate.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">In
  accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The
  Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The
  Company recognized and measured an aggregate of $250,000 of the proceeds, which is equal to the intrinsic value of the
  embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount
  attributed to the beneficial conversion feature is charged to current period operations as interest expense using the
  effective interest method over the term of the note.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">In
  the year 2012, the holder of the promissory note made payments of $200,000 directly to vendors of the Company for purchase of
  fuel and paid $50,000 directly to the Company. As part of the joint venture agreement the Company has agreed to pay 50% of all
  the profits generated by all the fuel transactions in South Africa.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">On
  December 12, 2013, the Note holder assigned $145,000 of its note to another note holder<FONT STYLE="font-family: TimesNewRomanPSMT">.</FONT></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White"><U>Convertible
  debenture July 2013 August 2013, October 2013 and January 2014</U></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">On
  July 19, 2013, the Company issued a $78,500 Convertible Promissory Note which bears interest at a rate of 8% and is
  convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60% of the lowest
  three day trading price for ten trading days immediately preceding the date of conversion.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">On
  August 26, 2013, the Company issued a $53,000 Convertible Promissory Note which bears interest at a rate of 8% and is
  convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60% of the lowest
  three day trading price for ten trading days immediately preceding the date of conversion.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">On
  October 23, 2013, the Company issued a $42,500 Convertible Promissory Note which bears interest at a rate of 8%, due on July
  25,2014 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60%
  of the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount of
  principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per
  annum from the due date thereof until the same is paid(&ldquo;Default Interest&rdquo;) and the note also has prepayment
  penalty clause.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">On
  January 30, 2014, the Company issued a $78,500 Convertible Promissory Note which bears interest at a rate of 8%, due on November
  3, 2014 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 60% of
  the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount of principal
  or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from
  the due date thereof until the same is paid (&ldquo;Default Interest&rdquo;) and the note also has prepayment penalty clause.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company received a net of $185,000 from
  the debenture holder, $6,500 was paid towards the accrued legal expenses and due diligence fees and $36,000 toward legal and professional
  fees and $25,000 was paid toward accrued professional fees.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 15 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
  2014, the Company paid $131,500 for July 2013, August 2013 and October 2013 note. In addition, the Company paid $42,500 as a prepayment
  penalty which has been recorded as interest expense.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in January 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $130,485 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 10%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">268.98</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.08</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $130,485 was allocated as a debt discount up to the proceeds of the note
  ($78,500) with the remainder ($51,985) charged to current period operations as interest expense for the nine months ended September
  30, 2014.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White"><U>Convertible
  debenture December 2013 and January 2014 </U></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">During
  the nine months ended September 30, 2014, the Company issued two notes of total a $228,500 Convertible Promissory Note which bears
  interest at a rate of 8%, due on July 20, 2014 and January 30, 2015 and is convertible into the Company&rsquo;s common stock at
  the holder&rsquo;s option, at the conversion rate of 60% of the lowest three day trading price for ten trading days immediately
  preceding the date of conversion. Any amount of principal or interest on this Note which is not paid when due shall bear interest
  at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (&ldquo;Default Interest&rdquo;)
  and the note also has prepayment penalty clause.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  Company identified embedded derivatives related to the Convertible Promissory Note entered into in January
  2014. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial
  instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible
  Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible
  Promissory Note, the Company determined a fair value of $383,457 of the embedded derivative. The fair value of the embedded
  derivative was determined using the Binomial Lattice Model based on the following assumptions:</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 48%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 3%; text-align: left">&nbsp;</TD><TD STYLE="width: 25%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10.5pt; background-color: White">267.19%-268.98</FONT></TD><TD STYLE="text-align: left">%</TD>
      <TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10.5pt; background-color: White">0.07%-0.10</FONT></TD><TD STYLE="text-align: left">%</TD>
      <TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $383,457 was allocated as a debt discount up to the proceeds of the note
  ($228,5</FONT>00) with the remainder ($154,957) charged to current period operations as interest expense for the nine months ended
  September 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 16 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture October 2013, December
  2013 and February 2014 </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">During
  the nine months ended September 30, 2014, the Company issued notes of total a $25,000 Convertible Promissory Note which bears
  interest at a rate of 8%, due on February 20, 2016 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s
  option, at the conversion rate of 60% of the lowest three day trading price for ten trading days immediately preceding the date
  of conversion. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of
  twenty two percent (22%) per annum from the due date thereof until the same is paid (&ldquo;Default Interest&rdquo;) and the note
  also has prepayment penalty clause.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  Company identified embedded derivatives related to the Convertible Promissory Note entered into in January
  2014. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial
  instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible
  Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible
  Promissory Note, the Company determined a fair value of $39,722 of the embedded derivative. The fair value of the embedded
  derivative was determined using the Binomial Lattice Model based on the following assumptions:</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 70%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 10%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">270.02</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.34</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  initial fair value of the embedded debt derivative of $39,722 was allocated as a debt discount up to the proceeds of the note
  ($25,000) with the remainder ($14,722) charged to current period operations as interest expense for the nine months ended September
  30, 2014.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White"><U>Convertible
  debenture January 2014</U></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">During
  the nine months ended September 30, 2014, the Company issued notes of total a $11,209 Convertible Promissory Note which bears
  interest at a rate of 8%, due on June 2, 2014 and is convertible into the Company&rsquo;s common stock at the maker&rsquo;s option,
  at the conversion rate of 40% of the lowest three day trading price for ten trading days immediately preceding the date of conversion.
  Any amount of principal or interest on this Note which is not paid when due shall bear interest at the lesser of i) 10 percent
  (10%) per annum or ii) the maximum rate allowed under the applicable law until paid in full or until the Note is reinstated.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">The
  Company analyzed the convertible debts for derivative accounting consideration under ASC 815 &ldquo;Derivatives and
  Hedging&rdquo; and determined that derivative accounting is not applicable. The Company further analyzed the convertible
  debts for a beneficial conversion feature under ASC 470-20 on the date of the notes and determined that a beneficial
  conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $7,473 and was
  recorded as debt discount.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the described
  embedded derivative for all the convertible note is of $459,711 at September 30, 2014 was determined using the Binomial
  Lattice Model with the following assumptions:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 56%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 2%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">266.94</TD><TD STYLE="text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10.5pt">0.05%-0.41</font></TD><TD STYLE="text-align: left">%</TD>
      </TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 17 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture August 2014 and
  September 2014 </U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September
  30, 2014, the Company issued notes of total a $60,388 Convertible Promissory Note which bears interest at a rate of 12%, due
  on November 1, 2014 and is convertible into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion
  rate of 60% of the lowest day trading price for ten trading days immediately preceding the date of conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in August and September 2014. These embedded derivatives
  included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company
  record the fair value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair
  value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a
  fair value of $100,646 of the embedded derivative. The fair value of the embedded derivative was determined using the
  Binomial Lattice Model based on the following assumptions:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 44%; text-align: justify">Dividend yield:</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 6%; text-align: left">&nbsp;</TD><TD STYLE="width: 24%; text-align: right">-0-</TD><TD STYLE="width: 1%; text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10.5pt; background-color: White">304.14%-309.19</FONT></TD><TD STYLE="text-align: left">%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Risk free rate:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">%</TD>
      </TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"><FONT STYLE="background-color: White">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The initial fair value of the embedded debt
  derivative of $100,646 was allocated as a debt discount up to the proceeds of the note ($60,388) with the remainder ($40,258) charged
  to current period operations as interest expense for the nine months ended September 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At September 30, 2014, the Company adjusted
  the recorded fair value of the derivative liability to market on all notes resulting in non-cash, non-operating loss of $238,381
  for the nine months ended September 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September
  30, 2014 and 2013 the Company amortized $335,021 and $45,864, respectively,of beneficial debt discount to the operations as
  interest expense</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 18 -->
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      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED
  PARTIES</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Convertible Notes payable - related parties
  consist of the following</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, <BR>2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: justify; padding-left: 5.4pt">Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,710</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">17,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,370</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">194,254</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued in January 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on April 3, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on May 21, 2014, unsecured, interest at 10%, due on demand.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000.</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,542</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Convertible note issued on July 1, 2014, unsecured, interest at 10%, due on demand.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">45,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Total convertible notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">236,622</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">211,254</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(236,622</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(211,254</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Long-term convertible notes payable - related parties</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture October 2013</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 1, 2013 the Company issued a $17,000
  Convertible Promissory Note against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $15,692 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $15,692 was amortized.</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 9 - CONVERTIBLE NOTES PAYABLE -
  RELATED PARTIES (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture October 1, 2013</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On October 2013 the Company issued a $194,254
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $179,312 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $179,312 was amortized.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture January 1, 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 2014 the Company issued a $45,000
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debenture April, May, June
  and July 2014</U></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company issued a total of $138,542 Convertible
  Promissory Notes against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible into
  the Company&rsquo;s common stock at the holder&rsquo;s option at 40% discount to the lowest trading price in five days prior to
  date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 9 - CONVERTIBLE NOTES PAYABLE -
  RELATED PARTIES (Continued)</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $45,000 and was recorded as debt discount. During the nine months ended September 30, 2014, debt discount
  of $45,000 was amortized.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For the nine months ended September 30,
  2014 and 2013, interest expenses charged on the above three notes is $6,306 and $0, respectively. Accrued interest on
  convertible notes payable &ndash; related parties as of September 30, 2014 and December 31, 2013 was $11,149 and $4,843,
  respectively</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 10 - NOTES PAYABLE - RELATED PARTIES</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">Notes payable - related parties consist of the following:</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">September 30, <BR>2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, <BR>2013</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 63%; text-align: justify; padding-left: 5.4pt">Note payable to a shareholder, secured by tangible and intangible assets of the Company, interest at 16% per annum, principal and interest due April 1, 2000, past due.&nbsp;&nbsp;Note is convertible into common stock of the Company at $0.10 per share. Note is in default. (2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,080,973</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,087,370</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Note payable to a related individual, interest at 8% per annum,past due. Note is in default. (1)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Notes payable to related individuals, unsecured, interest at 10%,due on demand. (3)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Notes payable to related individual, unsecured, interest at 12%,due on demand. (4)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">27,568</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">Total notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,137,041</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,115,870</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">Less: current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,137,041</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,115,870</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">Long-term notes payable - related parties</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-left: 5.4pt">&nbsp;<BR>&nbsp;<BR>Maturities of notes payable - related parties are as follows:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;<BR>Year Ending September 30,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;</P><P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Amount</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,137,041</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;<BR>Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,137,041</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on notes payable
  &ndash; related parties as of September 30, 2014 and December 31, 2013 was $315,038 and $250,334, respectively. During the
  nine months ended September 30, 2014, total interest expense to related party was $153,213.</P>
  
  
  <!-- Field: Page; Sequence: 21 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 10 - NOTES PAYABLE - RELATED PARTIES
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">1)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">This note was issued for the acquisition
  of AFI on January 28, 2012. As of September 30, 2014 and December 31, 2013, the Company had accrued interest on the note in the
  amount of $193,753 and $154,082, respectively. </FONT></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">2)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">This note was originally issued for $450,000.
  During the year ended December 31, 2013, the principle value of $450,000 along with accrued interest of $837,369 was converted
  to two new notes for $1,087,370 and $200,000. During the year 2013 the Company issued 2,100,000 shares of the common stock against
  settlement of the new note of $200,000 </FONT></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">3)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">During the year ended December 31,
                                                                                                         2013, one of the note holder for $15,000 along with accrued interest of $13,300 transfer edits loan to a non- related party.
                                                                                                         During the year 2013 itself the Company issued 1,800,000 shares of the common stock to settle$28,300 of note of non- related
                                                                                                         party.</FONT></TD></TR></TABLE>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
  <TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10.5pt">4)</FONT></TD><TD STYLE="text-align: justify; padding-right: 4.5pt"><FONT STYLE="font-size: 10.5pt">During the quarter ended September 30, 2014,
  the Company issued a total of $27,568 in new notes to a related party. </FONT></TD></TR></TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 11 &ndash; FAIR VALUE OF FINANCIAL INSTRUMENTS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 820 defines fair value as the price that
  would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
  measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the
  asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs
  can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on
  the observability of those inputs.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following tables set forth by level
  within the fair value hierarchy the Company&rsquo;s financial assets and liabilities that were accounted for at fair value as
  of September 30, 2014 and December 31, 2013. As required by ASC 820, a financial instrument&rsquo;s level within the fair
  value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company&rsquo;s
  assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the
  valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no
  transfers between fair value hierarchy levels for the periods ended September 30, 2014 and December 31, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying amounts reported in the balance
  sheets for cash, accounts receivable, loans payable, and accounts payable and accrued expenses, approximate their fair market value
  based on the short-term maturity of these instruments. The following table presents assets and liabilities that are measured and
  recognized at fair value as of September 30, 2014 on a recurring basis:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Assets and liabilities at fair value on a
  recurring basis at September 30, 2014:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">Level 1</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">Level 2</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">Level 3</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center">Total</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; text-align: justify; padding-left: 5.4pt">Liabilities</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="width: 40%; text-align: justify; padding-left: 5.4pt">Derivative liability</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">448,019</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">448,019</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="font-weight: bold; text-align: justify; padding-left: 5.4pt">Total</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">448,019</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">448,019</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 22 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 11 &ndash; FAIR VALUE OF FINANCIAL INSTRUMENTS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides a summary of
  changes in fair value of the Company&rsquo;s Level 3 financial liabilities as of September 30, 2014:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Derivative <BR>Liability</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 82%; text-align: justify">Balance, December 31, 2013</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">558,548</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">Initial fair value of debt derivatives at note issuances</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">803,378</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Derivative Liability on conversion of notes</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(703,989</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">-Embedded debt derivatives</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(209,918</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 1pt">Balance,&nbsp;September 30, 2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">448,019</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify">Net gain for the period included in earnings relating to the liabilities held at September 30, 2014</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">209,918</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt TimesNewRomanPSMT; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The carrying value of short term financial
  instruments including cash, accounts payable, accrued expenses and short-term borrowings approximate fair value due to the short
  period of maturity for these instruments. The long-term debentures payable approximates fair value since the related rates of interest
  approximate current market rates.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Preferred Stock</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is authorized to issue
  200 preferred shares of $0.0001 par value. As of September 30, 2014 and December 31, 2013 the Company has 200 shares of
  preferred stock issued and outstanding. Although the preferred stock carries no dividend, distribution, liquidation or
  conversion rights, each share of preferred stock carries ten million (10,000,000) votes and holders of our preferred stock
  are able to vote together with our common stockholders on all matters. Consequently, the holder of our preferred stock is
  able to unilaterally control the election of our board of directors and, ultimately, the direction of our Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Common stock</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company is authorized to issue
  2,500,000,000 shares of $0.0001 par value of common stock. As of September 30, 2014 and December 31, 2013 the Company
  had 1,413,672,725 and 37,709,552 shares of common stock as issued and outstanding.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 13, 2014, the Company issued an
  aggregate of 2,859,067 shares of its common stock to certain consulting personnel for services provided.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 14, 2014, the Company converted
  into 1,660,026 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 16, 2014, the Company issued a
  promissory note in the original principal amount of $3,000 to a lender. The Note matures on July 16, 2014 and carries an interest
  rate of 8% per annum.</P>
  
  
  <!-- Field: Page; Sequence: 23 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 22, 2014, the Company issued a
  Note in the original principal amount of $212,500. The Note carries an interest rate of 8% per annum. The Note shall at the maturity
  date, be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid
  and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading prices
  as reported on the OTCQB for the ten trading days previous to the conversion date. The net proceeds of the Note were used to redeem
  and retire two 8% convertible notes that were issued to Asher Enterprises, Inc. in the aggregate principal amount of $131,500.
  The Asher Notes were issued on July 19th, 2013 and August 26th, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 22, 2014, the Company issued a
  promissory note in the original principal amount of $5,000 to a lender. The Note matures on July 22, 2014 and carries an interest
  rate of 8% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 29, 2014, the Company converted
  into 1,166,667 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 30, 2014, the Company issued a
  promissory note in the original principal amount of $16,000 to a lender. The Note matures on January 30, 2015 and carries an interest
  rate of 8% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests
  conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 30, 2014, the Company issued a
  promissory note in the original principal amount of $78,500 to a lender. The Note matures on November 3, 2014 and carries an interest
  rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 30, 2014, the Company issued
  a promissory note in the original principal amount of $11,209 to a lender. The Note matures on June 2, 2014 and carries an
  interest rate of 10% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable
  shares of Common Stock of the Company at a 40% discount to the market.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 10, 2014, the Company converted
  into 1,237,624 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 18, 2014, the Company converted
  into 1,470,588 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On February 20, 2014, the Company recorded
  an additional $25,000 draw down and consideration in respect of a credit line and associated promissory note in the original principal
  amount of $300,000. The Maturity Date is two years from the effective date of each draw down. The Note carries an initial interest
  rate in the first 90 days of 0%, thereafter a one-time interest charge of 12% will apply. The Note shall at the Maturity Date,
  be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable
  shares of Common Stock of the Company at 60% of the average of the two lowest trade prices in the 25 trading days previous to the
  conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 3, 2014, the Company issued 1,000,000
  shares of its common stock to a consultant of the Company for services provided.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 4, 2014, the Company converted into
  2,083,333 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  
  <!-- Field: Page; Sequence: 24 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 5, 2014, the Company issued a
  promissory note in the original principal amount of $10,000 to a lender. The Note matures on September 5, 2014 and carries an
  interest rate of 8% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable
  shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported
  on the OTCQB for the ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 17, 2014, the Company converted
  into 2,210,884 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 21, 2014, the Company issued 1,200,000
  shares of its common stock to a consultant of the Company for services provided.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On March 31, 2014, the Company converted
  into 2,529,762 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued a
  promissory note in the original principal amounts of $25,000 to a consultant of the Company for services rendered. The Note
  carries an interest rate of 10% per annum, and at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a conversion price of $0.005 per share.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued a
  promissory note in the original principal amounts of $93,000 to a consultant of the Company for services rendered. The Note
  carries an interest rate of 10% per annum, and at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 25%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company converted into
  744,048 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued a promissory
  note in the original principal amount of $145,000 to a lender. The Note carries an interest rate of 8% per annum. The Note shall
  at the maturity date, be due and payable in full unless converted partially or in its entirety upon the election of the lender
  into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily
  trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued
  a promissory note in the original principal amount of $6,669 to a lender. The Note matures on May 1, 2014 and carries
  an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 25 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2014, the Company issued a promissory
  note in the original principal amount of $83,500 to a lender. The Note matures on January 2, 2015 and carries an interest rate
  of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 3, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $14,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 7, 2014, the Company converted
  into 1,200,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 8, 2014, the Company converted into
  1,070,205 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 9, 2014, the Company converted into
  3,656,379 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 9, 2014, the Company issued
  a promissory note in the original principal amount of $2,679.16 to a lender. The Note matures on May 9, 2014 and carries
  an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 28, 2014, the Company converted
  into 2,400,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 2, 2014, the Company converted into
  3,125,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 2, 2014, the Company converted
  into 2,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 6, 2014, the Company converted
  into 6,854,167 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 23, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 6, 2014, the Company converted into
  3,125,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 7, 2014, the Company converted into
  5,630,630 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 7, 2014, the Company converted into
  3,400,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 7, 2014, the Company converted into
  3,400,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.</P>
  
  
  <!-- Field: Page; Sequence: 26 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 7, 2014, the Company converted into
  995,833 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  23, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 8, 2014, the Company converted into
  4,504,504 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 9, 2014, the Company converted into
  5,000,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 9, 2014, the Company converted into
  4,750,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  23, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 9, 2014, the Company converted into
  3,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 12, 2014, the Company issued 500,000
  shares of its common stock to a director of the Company for services provided.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 13, 2014, the Company converted into
  3,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 13, 2014, the Company issued 500,000
  shares of restricted common stock to a consultant for services rendered.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 15, 2014, the Company converted into
  9,615,384 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 16, 2014, the Company issued
  a promissory note in the original principal amount of $1,975 to a lender. The Note matures on November 16, 2014 and carries
  an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 19, 2014, the Company issued 500,000
  shares of restricted common stock to a consultant for services rendered.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 21, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $4,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 22, 2014, the Company converted into
  4,166,667 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 23, 2014, the Company converted
  into 3,505,263 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 23, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 13, 2014, the Company converted
  into 3,750,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.</P>
  
  
  <!-- Field: Page; Sequence: 27 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 15, 2014, the Company converted into
  9,567,901 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 29, 2014, the Company converted into
  3,571,428 shares of common stock, a portion of a loan originally received by the Company on October 5, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 13, 2014, the Company converted
  into 5,044,270 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 30, 2014, the Company converted into
  4,461,282 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 30, 2014, the Company converted into
  1,050,410 shares of common stock, a loan originally received by the Company on August 13, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 3, 2014, the Company converted into
  6,987,877 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 3, 2014, the Company converted into
  16,025,641 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 11pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On May 19, 2014, the Company issued 2,000,000
  shares of restricted common stock to a consultant for services rendered.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 11, 2014, the Company converted into
  17,948,718 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 11, 2014, the Company converted into
  8,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 12, 2014, the Company converted into
  8,240,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 23, 2014, the Company converted into
  18,055,556 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 26, 2014, the Company converted into
  4,545,455 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  4, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 27, 2014, the Company converted into
  6,437,879 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On June 30, 2014, the Company issued
  a promissory note in the original principal amount of $1,928.50 to a lender. The Note matures on December 30, 2014 and
  carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 28 -->
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 1, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 1, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 14, 2014, the Company converted into
  24,057,318 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 14, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 14, 2014, the Company converted into
  15,517,241 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 15, 2014, the Company converted into
  14,202,945 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 15, 2014, the Company converted
  into 14,291,666 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 17, 2014, the Company converted
  into 25,757,576 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 18, 2014, the Company converted
  into 8,400,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 22, 2014, the Company converted
  into 16,428,571 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 23, 2014, the Company converted
  into 13,047,619 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  in February, 2000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 24, 2014, the Company converted
  into 21,323,529 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 24, 2014, the Company converted
  into 6,944,444 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  March 21, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 24, 2014, the Company converted
  into 10,401,348 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On July 30, 2014, the Company converted
  into 37,037,037 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.</P>
  
  
  <!-- Field: Page; Sequence: 29 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->29<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2014, the Company
  converted into 21,851,852 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 6, 2014, the Company
  converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 7, 2014, the Company issued a promissory
  note in the original principal amount of $1,569 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 11, 2014, the Company
  converted into 26,812,500 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on December 12, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 11, 2014, the Company
  converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 12, 2014, the Company
  converted into 15,131,579 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on March 5, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 13, 2014, the Company
  converted into 29,761,905 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 19, 2014, the Company
  converted into 16,666,667 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 20, 2014, the Company
  converted into 36,826,054 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 22, 2014, the Company
  converted into 24,888,889 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 22, 2014, the Company
  converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 22, 2014, the Company
  converted into 52,729,500 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 25, 2014, the Company
  converted into 40,476,190 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On August 29, 2014, the Company
  issued a promissory note in the original principal amount of $7,000 to a lender. The Note matures on November 1, 2014 and
  carries an interest rate of 12% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 30 -->
      <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: left; width: 33%"><A HREF="#TableOfContents" TITLE="Table of Contents" STYLE="font-style: italic">Table of Contents</A></TD><TD STYLE="text-align: center; width: 34%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->30<!-- Field: /Sequence --></TD><TD STYLE="text-align: right; width: 33%">&nbsp;</TD></TR></TABLE></DIV>
      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 2, 2014, the Company converted
  into 30,833,333 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 5, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 10, 2014, the Company
  converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 10, 2014, the Company
  converted into 76,923,077 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 17, 2014, the Company
  converted into 48,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 18, 2014, the Company
  converted into 53,720,027 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 18, 2014, the Company
  converted into 50,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 2, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 4, 2014, the Company issued
  a promissory note in the original principal amount of $6,000 to a lender. The Note is due upon demand, and carries an interest
  rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 26, 2014, the Company
  converted into 95,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 30, 2014, the Company
  converted into 63,583,333 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 13 - OPTIONS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted FASB ASC 718, &ldquo;Share-Based
  Payments&rdquo; (&ldquo;ASC 718&rdquo;) to account for its stock options. The Company estimates the fair value of each stock award
  at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options
  granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized
  only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future
  expectations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table summarizes the changes
  in options outstanding issued to employees of the Company:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="3" STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Shares</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 1%; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="width: 33%; text-align: left; vertical-align: bottom"><font style="font-size: 10.5pt">Outstanding as of January 1, 2014</font></TD><TD STYLE="width: 1%; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 26%; text-align: right">370,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 26%; text-align: right">1.34</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><font style="font-size: 10.5pt">Granted</font></TD><TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><font style="font-size: 10.5pt">Exercised</font></TD><TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><font style="font-size: 10.5pt">Cancelled</font></TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: bottom"><font style="font-size: 10.5pt">Outstanding at September 30, 2014</font></TD><TD STYLE="padding-bottom: 1pt; text-align: left; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">370,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1.34</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  
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      <DIV STYLE="page-break-before: always; margin-top: 6pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
      <!-- Field: /Page -->
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FUELSTREAM, INC. AND SUBSIDIARIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">Notes to the Unaudited Condensed Consolidated
  Financial Statements</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">September 30, 2014</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 13 - OPTIONS (Continued)</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Common stock options outstanding and exercisable
  as of September 30, 2014 are:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="11" STYLE="text-align: center; border-bottom: Black 1pt solid">Options Outstanding</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid">Options Exercisable</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Expiration <BR>Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Exercise Price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number shares outstanding</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Contractual Life (Years)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Number Exercisable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 35%; text-align: justify; padding-left: 0.75pt">October&nbsp;&nbsp;1, 2018</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">70,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">63,319</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">0.01</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 0.75pt">January 2, 2019</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">199,725</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 0.75pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">370,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">263,044</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the year ended December 31, 2013,
  the Company granted 300,000 stock options with an exercise price of $1.65 out of which 75,000 were immediately vested and balance
  vesting over three years and expiring six years from issuance date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of the vested portion of $103,218was
  charged to expenses and additional paid in capital during the nine months ended September 30, 2014.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The fair value of these stock options granted
  and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD STYLE="text-align: justify; border-bottom: Black 1pt solid"><font style="font-size: 10.5pt">&nbsp;<b>Significant&nbsp;assumptions:</b></font></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk-free interest rate at grant date</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom"><font style="font-size: 10.5pt">1.04%-0.89</font></TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected stock price volatility</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom"><font style="font-size: 10.5pt">199.38%-344.22</font></TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>%</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected dividend payout</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
      </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="width: 67%; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected option life-years</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 2%; text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="width: 13%; text-align: right; vertical-align: bottom">6</TD><TD STYLE="width: 1%; text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
      </TR>
  </TABLE>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 14 &ndash; SUBSEQUENT EVENTS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Subsequent to September 30, 2014, the Company
  issued 522,916,666 shares of common stock as part of settlement agreements with debt holders of the Company.</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>ITEM 2. MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The following
  discussion of the financial condition and results of operations of Fuelstream, Inc. (hereafter, &ldquo;Fuelstream,&rdquo; the
  &ldquo;Company,&rdquo; &ldquo;we,&rdquo; &ldquo;our,&rdquo; or &ldquo;us&rdquo;) should be read in conjunction with the
  Unaudited Financial Statements and related Notes thereto included herein. This discussion may contain forward-looking
  statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
  1934, including, without limitation, statements regarding the Company&rsquo;s expectations, beliefs, intentions, or future
  strategies that are signified by the words &quot;expects,&quot; &quot;anticipates,&quot; &quot;intends,&quot;
  &quot;believes,&quot; or similar language. Actual results could differ materially from those projected in the forward looking
  statements. Prospective investors should carefully consider the information set forth herein, and the Company cautions
  investors that its business and financial performance is subject to substantial risks and uncertainties.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Overview</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We are an in-wing
  and on-location supplier and distributor of aviation fuel to corporate, commercial, military, and privately-owned aircraft
  throughout the world. We also provide a variety of ground services either directly or through our affiliates, including
  concierge services, passenger and baggage handling, landing rights, coordination with local aviation authorities, aircraft
  maintenance services, catering, cabin cleaning, customs approvals, and third-party invoice reconciliation. Our personnel
  assist customers in flight planning and aircraft routing aircraft, obtaining permits, arranging overflies, and flight follow
  services.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our core business has
  developed as a result of a joint venture and eventual acquisition of Aviation Fuel International, Inc., now a wholly-owned subsidiary
  of the Company (&ldquo;AFI&rdquo;). The Company&rsquo;s principal sources of revenues are expected to result from the gross selling
  price of fuel delivery contracts and associated services. Expenses which comprise the costs of goods sold are expected to include
  the acquisition price of fuel transported, as well as operational and staffing costs of the trucks and other vehicles used for
  delivery. General and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses;
  outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Selling
  and marketing expenses include selling/marketing wages and benefits; advertising and promotional expenses; travel and other miscellaneous
  related expenses.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 21, 2012
  the Company entered into an agreement to create a fuel logistics joint venture with South African based Global Airways
  (&quot;Global&quot;). Global is an international air transport organization whose activities cover acquisition,
  refurbishment, heavy maintenance, leasing and chartering of air crafts throughout South Africa. We expect that this
  transaction will expand the Company&rsquo;s international footprint in a market that is developing standardized systems to
  meet the aviation fueling needs of commercial and cargo carriers.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The partnership with
  Global underlines the company's strategic plan to generate new revenue streams by partnering with aircraft leasing and MRO businesses
  and includes the development, operation and management of the fuel storage, supply and logistic operations located in South Africa.
  It is anticipated that the partnership will oversee the logistics delivery of up to 3 Million gallons of Jet-A Fuel per month by
  the end of 2013 if the Company is able to secure sufficient means of financing the purchase of such fuel.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our ability to generate
  revenues during the year 2014 and beyond depends substantially upon the Company&rsquo;s resources available in order to develop
  and grow the business of AFI as a supplier of fuel and logistics. Such efforts require significant systems development, marketing
  and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding, its ability to generate
  revenues will be significantly impaired and we may be unable to continue operations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Because the Company has
  incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards,
  given the uncertainty of the Company being able to utilize such loss carryforwards in future years. We anticipate incurring additional
  losses during the coming year.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Results of Operations</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Following is management&rsquo;s
  discussion of the relevant items affecting results of operations for the three and nine month periods ended September 30, 2014
  and 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Revenues.</B>
  The Company generated net revenues of $382,073 during the three months ended September 30, 2014 as compared to $30,000 for
  the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company generated net revenues
  of $639,661 as compared to $30,000 for the nine months ended September 30, 2013. In the future, the Company&rsquo;s sole
  source of revenue is expected to be related to fuel delivery contracts and associated services.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Cost of
  Sales.</B> Our cost of sales for the three months ended September 30, 2014 was $313,476 as compared to $26,895 for the three
  months ended September 30, 2013. For the nine months ended September 30, 2014, our cost of sales was $534,371 as compared to
  $26,895 for the nine months ended September 30, 2013. Our cost of sales consisted principally of the acquisition price of
  fuel and other petrochemicals delivered to customers and clients, other related services provided directly or outsourced
  through our affiliates, as well as operational and staffing costs with respect thereto. The increase is a direct correlation
  to the increase in sales as described above.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Selling,
  General and Administrative Expenses. </B>Selling, general and administrative expenses for the three months ended
  September 30, 2014 were $448,022 compared to $444,265 during the three months ended September 30, 2013. During the nine
  months ended September 30, 2014, selling, general and administrative expenses were $1,337,944 compared to $1,363,113 during
  the nine months ended September 30, 2013. The decrease is mainly the result of a decrease in the issuance of shares for
  compensation. The Company expects that salaries and consulting expenses, that are cash-based instead of share-based, will
  increase as we add personnel to build our fuel brokerage business.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Other
  Income (Expense)</B>. The Company had net other expenses of $739,386 for the three months ended September 30, 2014 compared
  to $547,955 during the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company had
  net other expenses of $1,706,719 compared to $807,840 during the nine months ended September 30, 2013. Other expenses
  incurred were comprised primarily of interest expenses related to notes payable including amortization of debt discount and
  setoff with gain on change in derivative liability and a gain on the conversion of debt. During the nine months ended
  September 30, 2014 and 2013, interest expense was $2,029,094 and $1,015,940, respectively. Included in interest expense was
  the amortization of debt discount of $1,176,353 and $328,716 for the nine months ended September 30, 2014 and 2013,
  respectively. The gain on change in derivative liability was $209,918 and $208,100 for the nine months ended September 30,
  2014 and 2013, respectively. The gain on the conversion of debt was $112,457 and $-0- for the nine months ended September 30,
  2014 and 2013, respectively.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><B>Net
  Loss</B>. The Company had a net loss of $1,118,811 for the three months ended September 30, 2014 compared to $989,115 during
  the three months ended September 30, 2013. The Company had a net loss of $2,939,373 for the nine months ended September 30,
  2014 compared to $2,167,848 during the nine months ended September 30, 2013. The increase in net loss was mainly due to the
  increase in interest expenses.</P>
  
  <P STYLE="font: 10.5pt/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Liquidity and Capital Resources</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of September 30, 2014,
  our primary source of liquidity consisted of $60,049 in cash and cash equivalents. We hold most of our cash reserves in local checking
  accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and
  long-term loans, and through the private placement of our common stock.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have sustained significant
  net losses which have resulted in a total stockholders&rsquo; deficit at September 30, 2014 of $6,420,809 and are currently experiencing
  a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We anticipate
  a net loss for the year ended December 31, 2014 and with the expected cash requirements for the coming months, without additional
  cash inflows from an increase in revenues combined with continued cost-cutting or a receipt of cash from capital investment, there
  is substantial doubt as to the Company&rsquo;s ability to continue operations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There is presently no
  agreement in place with any source of financing for the Company and we cannot assure you that the Company will be able to raise
  any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will
  likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect the Company and its business,
  and may cause us to cease operations. Consequently, shareholders could incur a loss of their entire investment in the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white"><B>Off-Balance
  Sheet Arrangements</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">We
  do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
  resources that is material to investors.&nbsp;&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white"><B>Contractual
  Obligations</B></FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">As
  a &ldquo;smaller reporting company&rdquo; as defined by Item 10 of Regulation S-K, the Company is not required to provide this
  information.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="background-color: white">&nbsp;</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Critical accounting policies</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
  conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities,
  the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods.
  The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We
  also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to
  understanding our results, which are described in Note 4 to our audited consolidated financial statements for 2013 appearing in
  our Annual Report on Form 10-K for the year ended December 31, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Recent accounting pronouncements</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The recent accounting standards that have
  been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not
  expected to have a material impact on our unaudited condensed consolidated financial statements upon adoption.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 49.5pt; text-align: justify; text-indent: -49.5pt"><B>ITEM
  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As a smaller reporting
  company we are not required to provide this information.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 35 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 49.5pt; text-align: justify; text-indent: -49.5pt"><B>ITEM
  4. CONTROLS AND PROCEDURES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 49.5pt; text-align: justify; text-indent: -49.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Management&rsquo;s Evaluation on Disclosure
  Controls and Procedures</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We maintain disclosure
  controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the <I>Securities
  Exchange Act of 1934</I>, as amended, is recorded, processed, summarized and reported within the time periods specified in the
  Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management,
  to allow for timely decisions regarding required disclosure.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As of September 30,
  2014, the end of our third quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and
  Controller, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the
  foregoing, we concluded that our disclosure controls and procedures were not effective as of the end of the period covered by
  this quarterly report. Our board of directors has only one member. We do not have a formal audit committee.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Changes in Internal Control over Financial
  Reporting</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There have been no
  significant changes in our internal controls over financial reporting that occurred during the quarter ended September 30,
  2014 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.</P>
  
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>PART II</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>OTHER INFORMATION</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM
  1. LEGAL PROCEEDINGS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Ryan International
  Airlines</I>. One of our subsidiaries, Aviation Fuel International (&quot;AFI&quot;) is involved in disputes with two airlines:
  Ryan International Airlines, LLC (&quot;Ryan&quot;) and Direct Air. Both aviation fuel customers litigation arise out of disputed
  amounts for the delivery of Jet Fuel. Ryan Air failed to pay for fuelings received from AFI. AFI filed under the commercial lien
  laws as required to secure a lien on the planes fueled in order to protect their receivable due from Ryan. Disagreements between
  the parties resulted in both parties filing separate lawsuits in three actions. Ryan filed a cause of action in Case No. 09-57580,
  <U>Ryan International Airlines, Inc. v. Aviation Flight Services, LLC (&ldquo;AFS&rdquo;) and Aviation Fuel International, Inc.,
  (&ldquo;AFI&rdquo;)</U>, and sought recovery of $1,491,308.66 allegedly paid to AFS as pre-payment of aviation fuel and flight
  services under a contractual relationship between Ryan and AFS. AFI moved to dismiss the action, to which, Ryan has subsequently
  filed a notice of removal to the Federal District Court for the Northern District of Illinois, Bankruptcy Division Case No.: 12-80802.
  AFI filed an action for breach of contract for Ryan&rsquo;s failure to pay certain Jet Fuel invoices for the delivery of fuel in
  the amount of $678,000 plus interest; <U>Aviation Fuel International v. Ryan International Airlines, Inc., a Kansas corporation,
  Wells Fargo Bank Northwest, Trustee N.A., a Utah corporation, RUBLOFF 757-MSN24794LLC, an Illinois limited liability company, RYAN
  767 LLC, an Illinois limited liability company, AFT TRUST SUB I, a Delaware corporation, RYAN 767 N123 LLC, an Illinois limited
  liability company, and RUBLOFF 440 LLC, an Illinois corporation</U>, Civil Action Case No. CACE 10-037788-04. AFI also filed the
  corresponding claims of liens under the FAA Aircraft Registration Branch, for each plane, registered and tail wing number listed
  therein. This action has also been recently noticed for been removal to the Federal District Court for the Northern District of
  Illinois, Bankruptcy Division Case No.: 12-80802. In addition, as a result of Ryan&rsquo;s filing a Federal Involuntary Bankruptcy
  Petition against Aviation Flight Services (&ldquo;AFS&rdquo;) on June 10, 2010, Case No.: 10-27313-JKO, (S.D. of Fla.), our subsidiary
  AFI, also filed and was discharged as a creditor in the amount of $269,000. However, the obligations for the unpaid fuelings owed
  to AFI still remain outstanding as obligations due to AFI.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Southern Sky Air Tours,
  d/b/a Myrtle Beach Direct Air and Tours (Direct Air)</I>. On or about March 13, 2012, Southern Sky Air Tours, d/b/a Myrtle Beach
  Direct Air and Tours (&ldquo;Direct Air&rdquo;) &#8213; a public charter operator &#8213; ceased operations. Direct Air has subsequently
  filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts (Worcester)(Case no. 12-40944).
  The Company currently has $122,000 in cash in escrow with Suntrust Bank, representing a partial payment by Direct Air for Fuel.
  This action is currently pending before the court, as it relates to the collection of the garnishment.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Russell Adler</I>.
  On January 11, 2013, Russell Adler, our former Chief Executive Officer, filed a cross-complaint against the Company, AFI, and other
  associated persons in the Seventeenth Judicial District Court, Broward County, Florida. Mr. Adler&rsquo;s complaint alleges various
  causes of action, including indemnification from the Company in respect of litigation described above, damages for breach of Mr.
  Adler&rsquo;s employment contract, fraud, unpaid legal fees, unjust enrichment, and quantum meruit. We believe Mr. Adler&rsquo;s
  claims are without merit and intend to defend the same.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As a result of the non-payment
  for Jet Fuel by AFI customers, AFI&rsquo;s suppliers have filed actions that have resulted in judgment and garnishments, in the
  amount of $330,000. Most of these fuel outstanding fuel delivery charges are secured in the bankruptcy action involving Ryan as
  described above, through lien filings by both the issuer and individual fuel providers. In addition, AFI incurred certain loan
  and debt obligations for which the Company is attempting to convert into common stock of the issuer.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">From time to time, we
  are also a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our
  rights under contracts with purchasers and suppliers of fuel. While the outcome of these legal proceedings cannot at this time
  be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or
  results of operations.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>ITEM 1A. RISK FACTORS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">As a smaller reporting
  company, we are not required to provide the information required by this item.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM
  2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 2, 2012, the
  Company issued a convertible debenture in the principal amount of $120,000 to Peak One. The debenture, if not redeemed by the Company,
  is convertible, in whole or in part, into shares of common stock at 60% of the lowest closing bid price of the Company&rsquo;s
  shares for the 20 trading days prior to such conversion. The debenture is redeemable by the Company at 120%-140% of the principal
  amount, depending on the date of redemption, together with interest as accrued.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  January 28, 2013, we issued an aggregate of 49,951 shares of common stock to employees and consultants of the Company. Also on
  January 28, 2013, pursuant to our 2012 Equity Incentive Plan, we issued 150,000 common stock purchase options to each of our directors
  at an exercise price of $1.65 per share.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 0.3% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On February 1, 2013,
  the Company issued a convertible debenture in the principal amount of $100,000 to Peak One.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 5, 2013, the
  Company issued a promissory note in the original principal amount of $7,500 (&ldquo;Note&rdquo;) to a lender. The Note carries
  an interest rate of 8% per annum. The Note is convertible at October 5, 2013 to common stock of the Company at a 40% discount to
  the average of the 3 lowest trading days in the 10 trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 31, 2013, the Company issued an aggregate of 254,000 shares of its common stock to certain consulting personnel for services
  provided.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately
  1.6% of the issued and outstanding shares of the Company. </FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 10, 2013, the Company issued 45,454 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 0.2% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 1, 2013, the
  Company issued a promissory note in the original principal amount of $24,272 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on April 1, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be convertible upon the election
  of the lender into fully paid and non-assessable shares of Common Stock of the Company at a conversion price equal at market price,
  or the lowest conversion price previously honored by the Company for any other debt conversion by an investor in 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 11, 2013, the Company issued 266,134 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 1.7% of the issued and outstanding shares of the Company.</FONT></P>
  
  
  <!-- Field: Page; Sequence: 38 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 16, 2013, the Company issued 448,028 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 2.82% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 29, 2013, the Company issued 806,451 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 4.95% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 1, 2013, the Company issued 786,163 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 4.6% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 2, 2013, the Company issued 864,779 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 4.83% of the issued and outstanding shares of the Company. </FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 6, 2013, the Company issued 75,000 shares of its common stock to a consultant of the Company for services provided.</FONT>
  <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately 0.4% of the
  issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 8, 2013, the Company issued 300,000 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 1.5% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 9, 2013, the Company issued 300,000 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 1.56% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 12, 2013, the Company issued 264,779 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time
  of such issuance, represented approximately 1.36% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 19, 2013, the
  Company issued a promissory note in the original principal amount of $78,500 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on April 22, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 13, 2013, the
  Company issued a promissory note in the original principal amount of $3,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on February 13, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full.</P>
  
  
  <!-- Field: Page; Sequence: 39 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 22, 2013, the Company issued an aggregate of 531,438 shares of its common stock to certain employees and consulting personnel
  for services provided.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 2.7% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 22, 2013, the Company issued 2,017,036 shares of unregistered common stock to an accredited investor in exchange for cash.</FONT>
  <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately 9.98% of the
  issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 26, 2013, the
  Company issued a promissory note in the original principal amount of $53,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on May 27, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless
  converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock
  of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the ten trading
  days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 29, 2013, the Company entered into a Settlement Agreement with a certain creditor and agreed to convert various loans and
  promissory notes in the collective amount of $933,000 into an aggregate of 5,480,000 shares of common stock of the Company.</FONT>
  <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately 23.06% of
  the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 1, 2013, the
  Company converted outstanding invoices of the Company in the aggregate amount of $211,254.30 to 2 promissory notes in the original
  principal amounts of $17,000, and $194,254.30 (the &ldquo;Notes&rdquo;) to two consultants of the Company. The Notes are due upon
  demand, and carry an interest rate of 10% per annum. The Notes at the election of the lender are convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior
  to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 2, 2013, the
  Company recorded a $35,000 draw down and consideration in respect of a credit line and associated promissory note in the original
  principal amount of $300,000 (&ldquo;Note&rdquo;). The Maturity Date is two years from the effective date of each draw down (&ldquo;Maturity
  Date&rdquo;). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter a one-time interest charge
  of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at 60% of the average
  of the two lowest trade prices in the 25 trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 4, 2013, the
  Company issued a promissory note in the original principal amount of $6,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on November 4, 2013 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading days in the ten trading days previous to
  the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 5, 2013, the
  Company issued a promissory note in the original principal amount of $28,500 (&ldquo;Note&rdquo;) to a lender. The Note carries
  an interest rate of 8% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 13, 2013,
  the Company issued a promissory note in the original principal amount of $30,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on October 13, 2014 and carries an interest rate of 6% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior to conversion.</P>
  
  
  <!-- Field: Page; Sequence: 40 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 17, 2013,
  the Company issued a promissory note in the original principal amount of $5,000 (&ldquo;Note&rdquo;) to a lender. The Note is
  due upon demand and carries an interest rate of 16% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 23, 2013,
  the Company issued a promissory note in the original principal amount of $42,500 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on July 25, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On October 23, 2013,
  the Company issued an aggregate of 2,100,000 shares of its common stock to officers and directors, and certain consulting personnel
  for services provided. The number of shares issued, at the time of such issuance, represented approximately 7.5% of the issued
  and outstanding shares of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 30, 2013, pursuant to the terms of a settlement agreement, the Company issued an additional 500,000 shares of common stock
  of the Company.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately
  1.67% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  November 20, 2013, the Company issued an aggregate of 5,075,713 shares of its common stock to certain employees and contract personnel
  for services provided.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 16.74% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  November 21, 2013, the Company converted into 1,800,000 shares of common stock a certain promissory note originally issued by the
  Company on December 7, 2004.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance,
  represented approximately 5.08% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 9, 2013,
  the Company recorded an additional $20,000 draw down and consideration in respect of a credit line and associated promissory note
  in the original principal amount of $300,000 (&ldquo;Note&rdquo;). The Maturity Date is two years from the effective date of each
  draw down (&ldquo;Maturity Date&rdquo;). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter
  a one-time interest charge of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted
  partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company
  at 60% of the average of the two lowest trade prices in the 25 trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 12, 2013,
  the Company issued a promissory note in the original principal amount of $61,500 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on December 12, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 12, 2013,
  the Company issued a promissory note in the original principal amount of $145,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on December 12, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  
  <!-- Field: Page; Sequence: 41 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 13, 2013,
  the Company issued a promissory note in the original principal amount of $810 (&ldquo;Note&rdquo;) to a lender. The Note carries
  an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or
  in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount to the average of the three lowest daily trading days in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  December 16, 2013, the Company converted into 250,000 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 0.6% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  December 30, 2013, the Company converted into 277,778 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 0.7% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amounts of $45,000 (the
  &ldquo;Note&rdquo;) to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum.
  The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company
  at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  January 13, 2014, the Company issued an aggregate of 2,859,067 shares of its common stock to certain consulting personnel for services
  provided.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately
  7.26% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  January 14, 2014, the Company converted into 1,660,026 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 4.4% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 16, 2014,
  the Company issued a promissory note in the original principal amount of $3,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on July 16, 2014 and carries an interest rate of 8% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 22,
  2014, the Company issued a Note in the original principal amount of $212,500. The Note carries an interest rate of 8% per
  annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety upon the
  election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion
  date. The net proceeds of the Note were used to redeem and retire two 8% convertible notes that were issued to Asher
  Enterprises, Inc. in the aggregate principal amount of $131,500 (hereafter, collectively, the &ldquo;Asher Notes&rdquo;) The
  Asher Notes were issued on July 19th, 2013 and August 26th, 2013.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 22, 2014,
  the Company issued a promissory note in the original principal amount of $5,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on July 22, 2014 and carries an interest rate of 8% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  January 27, 2014, the Company converted into 809,067 shares of common stock, a loan originally received by the Company on July
  1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately
  1.95% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  January 29, 2014, the Company converted into 1,166,667 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 2.76% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $16,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on January 30, 2015 and carries an interest rate of 8% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount from the lowest trading price in the five (5)
  days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $78,500 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on November 3, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $11,209 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on June 2, 2014 and carries an interest rate of 10% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount to the market.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  February 10, 2014, the Company converted into 1,237,624 shares of common stock, a portion of a loan originally received by the
  Company on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 2.85% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  February 18, 2014, the Company converted into 1,470,588 shares of common stock, a portion of a loan originally received by the
  Company on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 3.29% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On February 20, 2014,
  the Company recorded an additional $25,000 draw down and consideration in respect of a credit line and associated promissory note
  in the original principal amount of $300,000 (&ldquo;Note&rdquo;). The Maturity Date is two years from the effective date of each
  draw down (&ldquo;Maturity Date&rdquo;). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter
  a one-time interest charge of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted
  partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company
  at 60% of the average of the two lowest trade prices in the 25 trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  March 3, 2014, the Company issued 1,000,000 shares of its common stock to a consultant of the Company for services provided.</FONT>
  <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately 2.16% of the
  issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  March 4, 2014, the Company converted into 2,083,333 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 4.42% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On March 5, 2014, the
  Company issued a promissory note in the original principal amount of $10,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on September 5, 2014 and carries an interest rate of 8% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading
  prices as reported on the OTCQB for the ten trading days previous to the conversion date.</P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  March 17, 2014, the Company converted into 2,210,884 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 4.49% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  March 31, 2014, the Company converted into 2,529,762 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 4.92% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 (the &ldquo;Note&rdquo;)
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company issued a promissory note in the original principal amounts of $25,000 (the &ldquo;Note&rdquo;) to a consultant of the Company
  for services rendered. The Note carries an interest rate of 10% per annum, and at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a conversion price of $0.005 per share.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company issued a promissory note in the original principal amounts of $93,000 (the &ldquo;Note&rdquo;) to a consultant of the Company
  for services rendered. The Note carries an interest rate of 10% per annum, and at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 25%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  April 1, 2014, the Company converted into 744,048 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 1.37% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $145,000 (&ldquo;Note&rdquo;) to a lender. The Note carries
  an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or
  in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount to the average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to
  the conversion date.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $6,669 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on May 1, 2014 and carries an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days
  in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $83,500 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on January 2, 2015 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.</P>
  
  
  <!-- Field: Page; Sequence: 44 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 3, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $14,000 (the
  &ldquo;Note&rdquo;) to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum.
  The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company
  at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  April 7, 2014, the Company converted into 1,200,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 2.19% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  April 8, 2014, the Company converted into 1,070,205 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 1.91% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  April 9, 2014, the Company converted into 3,656,379 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 6.42% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 9, 2014, the
  Company issued a promissory note in the original principal amount of $2,679.16 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on May 9, 2014 and carries an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days
  in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  April 28, 2014, the Company converted into 2,400,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 3.96% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 2, 2014, the Company converted into 3,125,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 4.96% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 2, 2014, the Company converted into 2,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.78% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 6, 2014, the Company converted into 6,854,167 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 9.98% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 6, 2014, the Company converted into 3,125,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 4.14% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 7, 2014, the
  Company converted into 5,630,630 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 7.16% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 7, 2014, the Company converted into 3,400,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 4.03% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 7, 2014, the Company converted into 3,400,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.87% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 7, 2014, the Company converted into 995,833 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 1.09% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 8, 2014, the Company
  converted into 4,504,504 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012. The
  number of shares issued, at the time of such issuance, represented approximately 4.89% of the issued and outstanding shares of
  the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 9, 2014, the Company converted into 5,000,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 5.17% of the issued and outstanding shares of the Company. </FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 9, 2014, the Company converted into 3,041,667 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 2.9% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 9, 2014, the Company converted into 4,750,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 4.54% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 9, 2014, the Company converted into 3,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company in February, 2000.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.2% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 12, 2014, the Company issued 500,000 shares of its common stock to a director of the Company for services provided.</FONT>
  <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately 0.4% of the
  issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 13, 2014, the Company converted into 3,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.08% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 13, 2014, the
  Company issued 500,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued, at
  the time of such issuance, represented approximately 0.42% of the issued and outstanding shares of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 15, 2014, the
  Company converted into 9,615,384 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 8.19% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 16, 2014, the
  Company issued a promissory note in the original principal amount of $1,975 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on November 16, 2014 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 19, 2014, the
  Company issued 500,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued, at
  the time of such issuance, represented approximately 0.3% of the issued and outstanding shares of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 21, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $4,000 (the &ldquo;Note&rdquo;)
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 22, 2014, the Company converted into 4,166,667 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.26% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 23, 2014, the Company converted into 3,505,263 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 2.66% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 13, 2014, the Company converted into 3,750,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 2.77% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 15, 2014, the
  Company converted into 9,567,901 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 6.89% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 29, 2014, the Company converted into 3,571,428 shares of common stock, a portion of a loan originally received by the Company
  on October 5, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 2.4% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 13, 2014, the Company converted into 5,044,270 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 3.31% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 30, 2014, the Company converted into 4,461,282 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented
  approximately 2.84% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  May 30, 2014, the Company converted into 1,050,410 shares of common stock, a loan originally received by the Company on August
  13, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such issuance, represented approximately
  0.65% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 3, 2014, the Company converted into 6,987,877 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the time of such
  issuance, represented approximately 4.29% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 3, 2014, the
  Company converted into 16,025,641 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 9.45% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 19, 2014, the
  Company issued 2,000,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued,
  at the time of such issuance, represented approximately 1.07% of the issued and outstanding shares of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 11, 2014, the
  Company converted into 17,948,718 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 9.56% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 11, 2014, the Company converted into 8,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 3.89% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 12, 2014, the Company converted into 8,240,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 3.85% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 23, 2014, the
  Company converted into 18,055,556 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 8.13% of the issued and outstanding shares
  of the Company.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 26, 2014, the Company converted into 4,545,455 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 4, 2013.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 1.89% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  June 27, 2014, the Company converted into 6,437,879 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.</FONT> <FONT STYLE="font-size: 10.5pt">The number of shares issued, at the
  time of such issuance, represented approximately 2.63% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On June 30, 2014, the
  Company issued a promissory note in the original principal amount of $1,928.50 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on December 30, 2014 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 (the &ldquo;Note&rdquo;)
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 1, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 (&ldquo;Note&rdquo;) to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 14, 2014, the Company converted into 24,057,318 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012. </FONT>T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the time of such issuance, represented
  approximately 9.59% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On July 14, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 (&ldquo;Note&rdquo;) to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 14, 2014, the Company converted into 15,517,241 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 5.64% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 15, 2014, the Company converted into 14,202,945 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.66% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 15, 2014, the Company converted into 14,291,666 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued,
  at the time of such issuance, represented approximately 4.69% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 17, 2014, the Company converted into 25,757,576 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013. </FONT>T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 8.07% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 18, 2014, the Company converted into 8,400,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013. </FONT>T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 2.43% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 22, 2014, the Company converted into 16,428,571 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.65% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 23, 2014, the Company converted into 13,047,619 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 3.53% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 24, 2014, the Company converted into 21,323,529 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 5.57% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 24, 2014, the Company converted into 6,944,444 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 21, 2012.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 1.71% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 24, 2014, the Company converted into 10,401,348 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 2.53% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  July 30, 2014, the Company converted into 37,037,037 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 8.79% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 6, 2014, the Company converted into 21,851,852 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.76% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 6, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 (&ldquo;Note&rdquo;) to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 6, 2014, the Company converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 9.52% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 7, 2014, the
  Company issued a promissory note in the original principal amount of $1,569 (&ldquo;Note&rdquo;) to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 11, 2014, the Company converted into 26,812,500 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 5.09% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 11, 2014, the Company converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 8.27% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 12, 2014, the Company converted into 15,131,579 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 5, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 2.52% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 13, 2014, the Company converted into 29,761,905 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued,
  at the time of such issuance, represented approximately 4.85% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 19, 2014, the Company converted into 16,666,667 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 2.59% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 20, 2014, the Company converted into 36,826,054 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 5.58% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 22, 2014, the Company converted into 24,888,889 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 3.57% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 22, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 8.66% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 22, 2014, the Company converted into 52,729,500 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 6.72% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  August 25, 2014, the Company converted into 40,476,190 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.83% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On August 29, 2014, the
  Company issued a promissory note in the original principal amount of $7,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on November 1, 2014 and carries an interest rate of 12% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 2, 2014, the Company converted into 30,833,333 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 5, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 3.51% of the issued and outstanding shares of the Company.</FONT></P>
  
  
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 10, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued,
  at the time of such issuance, represented approximately 6.88% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 10, 2014, the Company converted into 76,923,077 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued,
  at the time of such issuance, represented approximately 7.92% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 17, 2014, the Company converted into 48,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 2, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 4.58% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 18, 2014, the Company converted into 53,720,027 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 4.9% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 18, 2014, the Company converted into 50,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 2, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 4.35% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 4, 2014,
  the Company issued a promissory note in the original principal amount of $6,000 (&ldquo;Note&rdquo;) to a lender. The Note is due
  upon demand, and carries an interest rate of 12% per annum.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 26, 2014, the Company converted into 95,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued,
  at the time of such issuance, represented approximately 7.92% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  September 30, 2014, the Company converted into 63,583,333 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 4.91% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT>On September 30,
  2014, the Company converted into 53,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at
  the time of such issuance, represented approximately 3.63% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 3, 2014, the Company converted into 100,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 7.36% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 7, 2014, the Company converted into 74,166,666 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.9% of the issued and outstanding shares of the Company.</FONT></P>
  
  
  <!-- Field: Page; Sequence: 52 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 8, 2014, the Company converted into 51,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 3.21% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 3, 2014, the Company converted into 67,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.09% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 16, 2014, the Company converted into 32,083,333 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 31, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 1.88% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 16, 2014, the Company converted into 52,833,333 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 31, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 3.04% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 17, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 3.49% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10.5pt">On
  October 24, 2014, the Company converted into 83,333,334 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT> T<FONT STYLE="font-size: 10.5pt">he number of shares issued, at the
  time of such issuance, represented approximately 4.3% of the issued and outstanding shares of the Company.</FONT></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">No solicitation was made
  and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance
  of shares and options as described above was exempt from registration with the Securities and Exchange Commission pursuant to Section
  4(2) of the Securities Act of 1933.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>ITEM 3. DEFAULTS UPON SENIOR
  SECURITIES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Effective February 1,
  2000, the Company sold and issued a promissory note secured by certain tangible and intangible assets of the Company (&ldquo;Note&rdquo;)
  in exchange for $450,000 in cash proceeds. As of May 1, 2000, the Company is in default with respect to the Note. The Note and
  its accompanying Security Agreement have been filed as an exhibit to the Company&rsquo;s 1999 annual report on form 10-KSB filed
  with the Securities and Exchange Commission on March 30, 2000.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -58.5pt"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM
  4. MINE SAFETY DISCLOSURES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Not applicable.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM
  5. OTHER INFORMATION</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Not applicable.</P>
  
  
  <!-- Field: Page; Sequence: 53 -->
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  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.5in"><B>ITEM
  6. EXHIBITS</B>&#9;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -58.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -22.5pt">The following
  documents are filed as exhibits to this Form 10-Q:</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -58.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>INDEX TO EXHIBITS</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
  <tr style="vertical-align: top">
      <td style="width: 13%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-decoration: underline; text-align: justify"><font style="font-size: 10.5pt"><b><u>Number</u></b></font></td>
      <td style="width: 5%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="width: 82%; padding-top: 6.95pt; padding-bottom: 3.7pt; text-decoration: underline; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><b><u>Exhibits</u></b></font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">3.1</font></td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Amended and Restated Certificate of Incorporation of Fuelstream, Inc</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">3.2</font></td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Amended and Restated Bylaws of Fuelstream, Inc.(1) </font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">10.1</font></td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">Form of Indemnification Agreement (2)</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">10.2</font></td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify">&nbsp;</td>
      <td style="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif">2012 Equity Incentive Plan (2)</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">31</font></td>
      <td style="padding-top: 0.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><A HREF="ex31_302certification.htm">Certification by Chief Executive Officer, Kevin Blanco, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</A>.</font></td></tr>
  <tr style="vertical-align: top">
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font-size: 10.5pt">32</font></td>
      <td style="padding-top: 0.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <TD STYLE="padding-right: 6.95pt; padding-bottom: 6pt; padding-left: 6.95pt; text-align: justify"><font style="font: 10.5pt Times New Roman, Times, Serif"><A HREF="ex32_906certification.htm">Certification by Chief Executive Officer,Kevin Blanco, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</A>.</font></td></tr>
  <tr style="vertical-align: top">
      <td style="border-bottom: black 1pt solid; padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td>
      <td style="padding-top: 6.95pt; padding-bottom: 3.7pt; text-align: justify">&nbsp;</td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(1) Filed as an Exhibit to the Company&rsquo;s
  Current Report on Form 8-K, filed on June 17, 2011.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(2) Filed as an Exhibit to the Company&rsquo;s
  Current Report on Form 8-K, filed on September 18, 2012.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B></B></P>
  
  <!-- Field: Page; Sequence: 54 -->
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B></B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>SIGNATURES</B></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 238.5pt; text-align: justify; text-indent: -238.5pt">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">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.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10.5pt Times New Roman, Times, Serif; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
      <TD STYLE="width: 46%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
      <TD STYLE="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
      <TD STYLE="width: 51%; padding-right: 5.4pt; padding-left: 5.4pt">
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FUELSTREAM, INC.</P>
          <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">Date: November 19, 2014</FONT></TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">BY: <U>/s/ John Thomas</U>__________________</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
      <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10.5pt Times New Roman, Times, Serif">John Thomas</FONT></TD></TR>
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metadata_documents: [{"type": "10-Q", "sequence": "1", "filename": "f10q_flst093014.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 505587}]
metadata_filer: {"company-data": {"conformed-name": "Fuelstream INC", "cik": "0001024920", "assigned-sic": "7389", "irs-number": "870561426", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-54941", "film-number": "141234359"}, "business-address": {"street1": "10757 RIVER FRONT PARKWAY", "street2": "SUITE 125", "city": "SOUTH JORDAN", "state": "UT", "zip": "84095", "phone": "8018162500"}, "mail-address": {"street1": "10757 RIVER FRONT PARKWAY", "street2": "SUITE 125", "city": "SOUTH JORDAN", "state": "UT", "zip": "84095"}, "former-company": [{"former-conformed-name": "SPORTSNUTS  INC", "date-changed": "20011113"}, {"former-conformed-name": "SPORTSNUTS COM INTERNATIONAL INC", "date-changed": "19990420"}, {"former-conformed-name": "DURWOOD INC /UT", "date-changed": "19961015"}]}
text: UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 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, 2014
  OR
  [ ] 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:
  333-14477
  FUELSTREAM, INC.
  (Name of Small Business Issuer in Its Charter)
  Delaware
  87-0561426
  (State
          or Other Jurisdiction
  of Incorporation
          or Organization)
  (IRS
          Employer
  Identification
          No.)
  510 Shotgun Road, Suite 110
  Fort Lauderdale, Florida
  33326
  (Address of Principal Executive Offices)
  (Zip Code)
  (954) 423-5345
  (Issuer's Telephone Number)
  (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
  Table of Contents
  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 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 [ ]
  Indicate by check mark
  whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
  to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
  (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No []
  Indicate by check mark
  whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, or a smaller reporting company.
  See definition of "large accelerated filer,""accelerated filer," and "smaller reporting company in
  Rule 12b-2 of the Exchange Act. (Check one):
  Large Accelerated Filer [  ]
  Accelerated Filer [  ]
  Non-Accelerated Filer [  ]
  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 [ ] No [X]
  APPLICABLE ONLY TO ISSUERS INVOLVED IN
  BANKRUPTCY
  PROCEEDINGS DURING THE PRECEDING FIVE YEARS
  Check whether the registrant
  has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution
  of securities under a plan confirmed by a court. Yes [ ] No [ ]
  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. As of November 7, 2014,
  the Company had outstanding 1,936,589,391 shares of common stock, par value $0.0001 per share.
  Table of Contents
  2
  PART
  I
  FINANCIAL
  INFORMATION
  The
  Condensed
  Consolidated
  Financial Statements of the Company are prepared as of
  September 30, 2014.
  ITEM
  1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
  CONTENTS
  Condensed Consolidated Balance Sheets as of September 30, 2014
  (unaudited) and December 31,2013
  4
  Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2014 and 2013
  (unaudited)
  5
  Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2014 and 2013
  (unaudited)
  6
  Notes to the Unaudited Condensed Consolidated Financial Statements
  7
  Table of Contents
  3
  FUELSTREAM, INC.
  Condensed Consolidated Balance Sheets
  ASSETS
  September 30,
  December 31,
  2014
  2013
  (Unaudited)
  CURRENT ASSETS
  Cash and cash equivalents
  $
  60,049
  $
  —
  Accounts receivable, net of allowance
  68,825
  28,000
  Total Current Assets
  128,874
  28,000
  TOTAL ASSETS
  $
  128,874
  $
  28,000
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  CURRENT LIABILITIES
  Accounts payable
  $
  899,287
  $
  826,832
  Due to related parties
  58,037
  56,973
  Accrued expenses
  1,318,492
  788,771
  Convertible debenture/notes payable - short term (net of
  discount of $77,122 and $286,751, respectively)
  417,575
  226,250
  Convertible notes payable - related parties
  236,622
  211,254
  Notes payable
  1,034,610
  1,093,382
  Notes payable - related parties
  2,137,041
  2,115,870
  Derivative liability
  448,019
  558,548
  Total Current Liabilities
  6,549,683
  5,877,880
  LONG TERM LIABILITIES
  Convertible debenture/notes payable (net of discount of
  $-0- and $50,082, respectively)
  —
  4,918
  Total Long Term Liabilities
  —
  4,918
  TOTAL LIABILITIES
  6,549,683
  5,882,798
  STOCKHOLDERS' DEFICIT
  Preferred stock, $0.0001 par value; 200 shares
  authorized, 200 and 200 shares issued and outstanding
  —
  —
  Common stock, $0.0001 par value; 2,500,000,000
  and 150,000,000 shares authorized, 1,413,672,725 and
  37,709,552 shares issued and outstanding, respectively
  141,367
  3,771
  Additional paid-in capital
  52,362,644
  50,126,878
  Accumulated deficit
  (58,924,820
  )
  (55,985,447
  )
  Total Stockholders' Deficit
  (6,420,809
  )
  (5,854,798
  )
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $
  128,874
  $
  28,000
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  4
  FUELSTREAM, INC.
  Condensed Consolidated Statements of Operations
  (Unaudited)
  For the Three Months Ended
  For the Nine Months Ended
  September 30,
  September 30,
  2014
  2013
  2014
  2013
  NET SALES
  $
  382,073
  $
  30,000
  $
  639,661
  $
  30,000
  COST OF SALES
  313,476
  26,895
  534,371
  26,895
  GROSS MARGIN
  68,597
  3,105
  105,290
  3,105
  OPERATING EXPENSES
  Selling, general and administrative
  448,022
  444,265
  1,337,944
  1,363,113
  Total Operating Expenses
  448,022
  444,265
  1,337,944
  1,363,113
  LOSS FROM OPERATIONS
  (379,425
  )
  (441,160
  )
  (1,232,654
  )
  (1,360,008
  )
  OTHER INCOME (EXPENSES)
  Gain on conversion of debt
  47,843
  —
  112,457
  —
  (Loss) Gain on change in fair value of derivative liability
  (319,205
  )
  70,531
  209,918
  208,100
  Interest expense (including amortization of debt discount
  of $251,768, $233,153, $1,176,353 and $328,716, respectively)
  (468,024
  )
  (618,486
  )
  (2,029,094
  )
  (1,015,940
  )
  Total Other (Expenses)
  (739,386
  )
  (547,955
  )
  (1,706,719
  )
  (807,840
  )
  LOSS BEFORE INCOME TAXES
  (1,118,811
  )
  (989,115
  )
  (2,939,373
  )
  (2,167,848
  )
  INCOME TAX EXPENSE
  —
  —
  —
  —
  NET LOSS
  $
  (1,118,811
  )
  $
  (989,115
  )
  $
  (2,939,373
  )
  $
  (2,167,848
  )
  BASIC AND DILUTED:
  Net loss per common share
  $
  (0.00
  )
  $
  (0.04
  )
  $
  (0.01
  )
  $
  (0.12
  )
  Weighted average shares outstanding
  529,896,732
  22,273,334
  301,807,307
  17,650,764
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  5
  FUELSTREAM, INC.
  Condensed Consolidated Statements of Cash Flows
  (Unaudited)
  For the Nine Months Ended
  September 30,
  2014
  2013
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss
  $
  (2,939,373
  )
  $
  (2,167,848
  )
  Adjustments to reconcile net loss to net
  cash used in operating activities:
  Gain on conversion of debt
  (112,457
  )
  —
  Common stock issued for services
  175,450
  —
  Stock based compensation
  103,218
  654,410
  Operating expenses incurred by noteholders on behalf of the Company
  270,969
  34,272
  Non-cash interest expenses
  336,171
  333,437
  Change in fair value of derivative liability
  (209,918
  )
  (208,100
  )
  Amortization of debt discounts
  1,176,353
  328,716
  Changes in operating assets and liabilities:
  Accounts receivable
  (40,825
  )
  152,000
  Accounts payable and accrued expenses
  982,949
  515,788
  Due to related parties
  1,064
  59,973
  Net Cash Used in Operating Activities
  (256,399
  )
  (297,352
  )
  CASH FLOWS FROM INVESTING ACTIVITIES:
  —
  —
  CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from sale of common stock
  —
  142,193
  Net proceeds from notes payable
  421,948
  112,000
  Net proceeds from notes payable - related parties
  26,000
  —
  Payments on notes payable
  (131,500
  )
  —
  Net Cash Provided by Financing Activities
  316,448
  254,193
  NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
  $
  60,049
  $
  (43,159
  )
  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
  —
  43,159
  CASH AND CASH EQUIVALENTS, END OF PERIOD
  $
  60,049
  $
  —
  SUPPLEMENTAL CASH FLOW INFORMATION
  Cash Payments For:
  Interest
  $
  601
  $
  118
  Income taxes
  $
  —
  $
  —
  Non-cash investing and financing activity:
  Initial derivative liability on convertible note payable
  $
  803,378
  $
  540,701
  Beneficial conversion feature on convertible note credited to additional paid in capital
  $
  435,156
  $
  —
  Common stock issued for settlement of notes payable and accrued interest
  $
  142,745
  $
  1,336,080
  Reclassification from accrued interest to note payable - related party
  $
  —
  $
  837,370
  Reclassification of note from related party to non-related party
  $
  —
  $
  200,000
  Accrued expenses paid by convertible noteholder
  $
  —
  $
  31,500
  Common stock issued for the conversion of debt and accrued interest
  $
  1,306,009
  $
  73,296
  Common stock issued for the conversion of debt and accrued interest related party
  $
  210,784
  $
  —
  Accrued interest converted to notes payable
  $
  131,659
  $
  —
  Accounts payable converted to notes payable related party
  $
  158,000
  $
  —
  Extinguished derivative liability on conversion of convertible note payable
  $
  703,989
  $
  —
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  Table of Contents
  6
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 1 -SIGNIFICANT ACCOUNTING POLICIES AND
  NATURE OF OPERATIONS
  Basis of
  Presentation
  The accompanying unaudited condensed consolidated
  financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.
  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally
  accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished
  in the interim consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in
  the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the
  disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim consolidated
  financial statements be read in conjunction with the Company's audited consolidated financial statements and notes thereto
  included in its Form 10-K for the year ended December 31, 2013. Operating results for the nine months ended September 30, 2014
  are not necessarily indicative of the results to be expected for the year ending December 31, 2014.
  Organization and Nature of Operation
  Fuelstream, Inc.
  (the "Company") was incorporated under the laws of the State of Delaware on July 12, 1996 under the name
  of "Durwood, Inc."From April 6, 1999 to April 9,2010, the Company operated as a sports marketing firm under the
  name of "Sportsnuts, Inc." On April 9, 2010, the Company changed its name to Fuelstream, Inc. and changed its
  business model to become a fuel transportation and logistics company.
  On April 11, 2011, the Company entered
  into a joint venture agreement ("Joint Venture") with Aviation Fuel International, Inc., a Florida corporation
  ("AFI") and a purchaser and reseller of aviation fuel for commercial and private aircraft. The Joint Venture
  required the Company to contribute up to $200,000 in respect of supplying aviation fuel to various commercial aircraft via
  tanker trucks which were intended to be acquired by the Joint Venture. The Company ultimately contributed $183,500 in
  connection with the Joint Venture. On January 18, 2012, the Joint Venture was terminated upon completion of the acquisition
  of AFI, which is now a wholly-owned subsidiary of the Company (refer to note 3).
  On May 10, 2012, the Company along
  with two partners formed AFI South Africa LLC ("AFI SA"), immediately the Company purchased shares of the other
  partners to become 100% owner of AFI SA (refer to note 3). AFI SA was effective as Limited Liability Company under the Act by
  the filing organization with the office of the Secretary of State of Florida on May 11, 2012. The Company has been organized
  for the purpose of partnering with Global Aviation for brokering the sale of Fuel for aircraft in South Africa.
  Use of Estimates
  The preparation of unaudited condensed
  consolidated 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 and disclosure of contingent
  assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates.
  Revenue Recognition
  The Company recognizes revenue in
  accordance with Accounting Standards Codification subtopic 605-10,Revenue Recognition ("ASC 605-10")
  which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an
  arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is
  reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature
  of the selling prices of the products delivered and the collectability of those amounts.
  Table of Contents
  7
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 1 - SIGNIFICANT ACCOUNTING
  POLICIES AND NATURE OF OPERATIONS (Continued)
  ASC605-10 incorporates Accounting
  Standards Codification subtopic 605-25, Multiple-Element Arrangements("ASC 605-25"). ASC 605-25 addresses
  accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use
  assets.
  Principles of Consolidation
  The consolidated financial statements have
  been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and include
  the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated
  Cash
  The Company considers cash to consist
  of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into
  cash.
  Income Taxes
  The Company has adopted Accounting Standards
  Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities
  and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
  tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
  Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily
  of timing differences such as deferred officers' compensation and stock based compensation accounting.
  Net Loss per share
  The Company complies with accounting and
  disclosure requirements of FASB ASC 260, "Earnings Per Share." Net loss per ordinary share is computed by dividing
  net loss applicable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the period. Common
  share equivalents are excluded from the diluted earnings (loss) per share computation if their effect is anti-dilutive.
  Stock based compensation
  The Company follows Accounting
  Standards Codification subtopic 718-10, Compensation ("ASC 718-10") which requires that all share-based payments
  to both employees and non-employees be recognized in the income statement based on their fair values.
  Stock based compensation recorded in
  the unaudited condensed consolidated financial statements for the nine months ended September 30, 2014 and 2013 were
  $103,218 and $ 214,859, respectively.
  Financial Instruments
  On January 1, 2008, the Company adopted FASB
  ASC 820-10-50, "Fair Value Measurements." This guidance defines fair value, establishes a three-level valuation hierarchy
  for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined
  as follows:
  -
  Level
  1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities inactive
  markets
  .
  Table of Contents
  8
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
  AND NATURE OF OPERATIONS (Continued)
  - Level 2 inputs to the
  valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are
  observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
  instrument.
  - Level 3 inputs to valuation methodology
  are unobservable and significant to the fair measurement.
  The carrying amounts reported in
  the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial
  instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such
  instruments and their expected realization and their current market rate of interest.
  Derivative Liabilities
  The Company assessed the classification of
  its derivative financial instruments as of September 30, 2014, which consist of convertible instruments and rights to shares of
  the Company's common stock, and determined that such derivatives meet the criteria for liability classification under ASC
  815.
  ASC 815 generally provides three criteria
  that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing
  derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks
  of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host
  contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured
  at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings
  as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative
  instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is
  deemed to be conventional, as described.
  Convertible Instruments
  The Company evaluates and accounts for conversion
  options embedded in its convertible instruments in accordance with professional standards for "Accounting for Derivative
  Instruments and Hedging Activities".
  Professional standards generally provide
  three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them
  as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics
  and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of
  the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not
  re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported
  in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered
  a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be
  conventional as defined under professional standards as "The Meaning of "Conventional Convertible Debt Instrument".
  The Company accounts for convertible instruments
  (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance
  with professional standards when "Accounting for Convertible Securities with Beneficial Conversion Features," as those
  professional standards pertain to "Certain Convertible Instruments." Accordingly, the Company records, when necessary,
  discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their earliest
  date of
  Table of Contents
  9
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
  AND NATURE OF OPERATIONS (Continued)
  redemption. The Company also records when
  necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences
  between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion
  price embedded in the note.
  ASC 815-40 provides that, among other things,
  generally, if an event is not within the entity's control could or require net cash settlement, then the contract shall be
  classified as an asset or a liability.
  Recently adopted accounting pronouncements
  The Company has adopted all applicable recently-issued
  accounting pronouncements.  The adoption of the accounting pronouncements, including any not yet effective, is not anticipated
  to have a material effect on the financial position or results of operations of the Company.
  Reclassification
  Certain reclassifications have been made
  to prior periods' data to conform to the current period's presentation. These reclassifications had no effect on reported income
  or losses
  NOTE 2 -
  GOING CONCERN CONSIDERATIONS
  The accompanying unaudited condensed
  consolidated financial statements have been prepared using generally accepted accounting principles applicable to a going
  concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As
  reported in its Annual Report on Form 10-K for the year ended December 31, 2013, the Company has an accumulated deficit of
  $55,985,447 from inception of the Company through December 31, 2013. It should be noted that prior to the acquisition of AFI
  as discussed in Note 3, the Company had an accumulated deficit of $32,105,264 as reported in its Annual Report on Form 10-K
  for the year ended December 31, 2011. The accumulated deficit as of September 30, 2014 was $58,924,820 and the total
  stockholders' deficit at September 30, 2014 was $6,420,809 and had working capital deficit (current liabilities minus
  current assets) of $6,420,809, continued losses and negative cash flows from operations. These factors combined, raise
  substantial doubt about the Company's ability to continue as a going concern. Management's plans to address and
  alleviate these concerns are as follows:
  The Company's management continues
  to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient
  funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by
  way of financial assistance through issuances of additional equity and by generating revenues by brokering the sale of aircraft
  fuel. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to
  management.
  The ability of the Company to continue as
  a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
  attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments
  relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that
  might result from the outcome of these uncertainties.
  Table of Contents
  10
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 3 - ACQUISITION
  On January 18, 2012 the Company
  completed the acquisition of 100% of the equity of Aviation Fuel International, Inc., a Florida corporation
  ("AFI"). AFI is a purchaser and reseller of aviation fuel for commercial and private aircraft. The consideration
  for the acquisition of AFI consisted of 7,400,000 shares of restricted common stock, loan receivable adjusted for $183,500
  and a note payable in the amount of $1,000,000. As part of the acquisition, the Company recorded goodwill in the amount of
  $6,000,410 on June 25, 2013. The Company disaffirmed the note payable of $1,000,000. However, until the Company receives a
  judicially approved release, the note payable will remain on the financial statements and is included in the balance sheet as
  of September 30, 2014. Prior to the acquisition, AFI had accumulated notes payable of $1,356,300 and accounts payable of
  $536,610. These liabilities have been recorded in the condensed consolidated balance sheet. These liabilities are due from
  AFI and were not incurred or guaranteed by the parent company, Fuelstream, Inc.
  NOTE 4 - LOSS CONTINGENCIES
  The Company is involved with various legal
  proceedings as described in Part II Item I of this Form 10-Q. The Company has evaluated these contingencies per the requirements
  of ASC 450-20 (previously SFAS 5, "Accounting for Contingencies") and determined that the likelihood of loss from these
  proceedings are remote.
  NOTE 5 -
  ACCOUNTS RECEIVABLE
  Accounts receivable at September 30,
  2014 and December 31, 2013 are as follow:
  September 30,
  2014
  December 31, 2013
  Accounts receivable
  $
  738,826
  $
  698,000
  738,826
  698,000
  Less: allowance on accounts receivable
  (670,000
  )
  (670,000
  )
  Accounts receivable, net
  $
  68,826
  28,000
  The Company is involved in disputes with
  $698,000 of the above accounts receivable and has filed a lawsuit.
  NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED
  EXPENSES
  The accounts payable of $899,287, as of
  September 30, 2014, includes two parties who are seeking motion for entry for final garnishment judgment. The Company has
  assumed these two accounts payable with the acquisition of AFI (refer to note 3). Per court order interest is calculated at
  rate of 6% per annum on $325,138 on one of the accounts payable and 18% on $192,061 (principal amount) of the second accounts
  payable. Accrued interest on accounts payable balance as of September 30, 2014 and December 31, 2013 is $169,588 and
  $129,028, respectively. Interest expense of $40,560 was charged to expenses during the nine months ended September 30,
  2014.
  Table of Contents
  11
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 7 - NOTES PAYABLE
  Notes payable consisted of the following:
  September 30,
  2014
  December 31,
  2013
  Notes payable, issued on May 6, 2011, unsecured, interest at 10% per annum, due on demand.
  $
  59,500
  $
  59,500
  Notes payable, issued on August 25, 2010, unsecured, interest at 10% per annum due on demand.
  172,500
  172,500
  Notes payable issued on October 18, 2010 to individual, unsecured, interest at 15% per annum, due on demand(1)
  786,300
  786,300
  Notes payable issued on October 5, 2013 to individual, unsecured, interest at 8%per annum, due on demand.
  —
  28,500
  Notes payable issued on October 17, 2013 to a company, unsecured, interest at 16% per annum, due on demand.
  —
  5,000
  Notes payable issued on October 4, 2013, January 16, 2014, and January 22, 2014 to a company, unsecured, interest at 8% per annum, due on demand.
  8,000
  6,000
  Notes payable issued on March 5, 2013 to individual, unsecured, interest at 8% per annum, due on demand.
  7,500
  7,500
  Notes payable issued on July 1, 2013 to company, unsecured, interest at 8% per annum, due on demand
  810
  28,082
  Total notes payable
  1,034,610
  1,093,382
  Less: current portion
  (1,034,610
  )
  (1,093,382
  )
  Long-term notes payable
  $
  —
  $
  —
  Maturities of notes payable are as follows:
  Year Ending September 30,
  Amount
  2015
  $
  1,034,610
  Total
  $
  1,034,610
  Accrued interest on notes payable as of
  September 30, 2014 was $467,636 and as of December 31, 2013 was $363,507. Interest expense of $106,017 has been charged to
  expenses for the nine months ended September 30, 2014.
  1)
  This
                                           Note payable was assumed on the acquisition of AFI. The Company is negotiating a settlement
  agreement for $786,300, inclusive of all interest
                                           on the date of settlement.
  Table of Contents
  12
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 8 -
  CONVERTIBLE DEBENTURE/NOTES PAYABLE
  September 30,
  2014
  December 31,
  2013
  Notes payable issued on March 21, 2012, unsecured, interest included, due on March 21, 2014,convertible into common stock at $1.00 per share (less unamortized debt discount of $-0- and $12,616, respectively)
  $
  —
  $
  92,384
  Convertible note issued on March 2013, unsecured, interest at 8%, due on October 05, 2013, in default.
  —
  10,000
  Convertible note issued on January 2014, unsecured, interest at 8%, due on November 3, 2014 (in default). Unamortized debt discount of $16,375 and $92,011, respectively
  —
  81,989
  Convertible note issued on October 2013, December 2013 and February 2014, unsecured, zero interest if paid on or before 90 days otherwise one time interest charge of 12%, due on October 2, 2015 December 9, 2015 and February 20, 2016. Unamortized debt discount of $4,995 and $50,082, respectively
  2,185
  4,918
  Convertible note issued on October 2013, unsecured, interest at 6%, due on October 13, 2014 (in default). Unamortized debt discount of $601 and $23,507, respectively
  9,311
  6,493
  Convertible note issued on December 2013 and January 2014, unsecured, interest at 8%, due on December 12, 2014, July 20, 2014 (in default) and January 30, 2015. Unamortized debt discount of $-0- and $58,299, respectively
  136,700
  3,201
  Convertible note issued on December 2013, unsecured, interest at 6%, due on December 12, 2014. Unamortized debt discount of $-0- and $100,317, respectively
  —
  32,183
  Convertible note issued on January 2, 2014, unsecured, interest at 10%, due on June 2, 2014 (in default), convertible into common stock at 60% of the bid price on the date of conversion, (less unamortized debt discount of $-0- and $-0-, respectively)
  11,209
  —
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on April 10, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  6,669
  —
  Convertible note issued on April 4, 2014, unsecured, interest at 10%, due on May 4, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  2,679
  —
  Convertible note issued on March 31, 2014, unsecured, interest at 8%, due on January 2, 2015. Unamortized debt discount of $31,049 and $-0-, respectively.
  52,451
  —
  Table of Contents
  13
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on September 1, 2014 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  93,000
  —
  Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000 (in default). Unamortized debt discount of $-0- and $-0-, respectively.
  25,000
  —
  Convertible note issued on June 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $-0- and $-0-, respectively.
  25,000
  —
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on December 1, 2014. Unamortized debt discount of $6,250 and $-0-, respectively.
  18,750
  —
  Convertible note issued on May 16, 2014, unsecured, interest at 8%, due on November 16, 2014 (in default). Unamortized debt discount of $355 and $-0-, respectively.
  1,620
  —
  Convertible note issued on June 30, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $705 and $-0-, respectively.
  1,224
  —
  Convertible note issued on July 9, 2014, unsecured, interest at 10%, due on February 9, 2015. Unamortized debt discount of $1,851 and $-0-, respectively.
  2,706
  —
  Convertible note issued on August 29, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $3,500 and $-0-, respectively.
  3,500
  —
  Convertible note issued on September 2, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $11,921 and $-0-, respectively.
  10,431
  —
  Convertible note issued on September 2, 2014, unsecured, interest at 12%, due on November 1, 2014 (in default). Unamortized debt discount of $15,544 and $-0-, respectively.
  13,601
  —
  Convertible note issued on September 8, 2014, unsecured, interest at 8%, due on December 30, 2014. Unamortized debt discount of $351 and $-0-, respectively.
  1,539
  —
  Total notes payable
  417,575
  231,168
  Less: current portion
  (417,575
  )
  (4,918
  )
  Long-term convertible debenture/notes payable
  $
  —
  $
  226,250
  Table of Contents
  14
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)
  Convertible
  note issued March 21, 2012
  On
  March 21, 2012, the Company issued a $250,000 Convertible Promissory Note which is convertible into 250,000 shares of the Company's
  common stock at the holder's option, or $1.00 per share, and there is no fluctuation in this conversion rate.
  In
  accordance with ASC 470-20, the Company recognized an embedded beneficial conversion feature present in the note. The
  Company allocated a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The
  Company recognized and measured an aggregate of $250,000 of the proceeds, which is equal to the intrinsic value of the
  embedded beneficial conversion feature, to additional paid-in capital and a discount against the note. The debt discount
  attributed to the beneficial conversion feature is charged to current period operations as interest expense using the
  effective interest method over the term of the note.
  In
  the year 2012, the holder of the promissory note made payments of $200,000 directly to vendors of the Company for purchase of
  fuel and paid $50,000 directly to the Company. As part of the joint venture agreement the Company has agreed to pay 50% of all
  the profits generated by all the fuel transactions in South Africa.
  On
  December 12, 2013, the Note holder assigned $145,000 of its note to another note holder
  .
  Convertible
  debenture July 2013 August 2013, October 2013 and January 2014
  On
  July 19, 2013, the Company issued a $78,500 Convertible Promissory Note which bears interest at a rate of 8% and is
  convertible into the Company's common stock at the holder's option, at the conversion rate of 60% of the lowest
  three day trading price for ten trading days immediately preceding the date of conversion.
  On
  August 26, 2013, the Company issued a $53,000 Convertible Promissory Note which bears interest at a rate of 8% and is
  convertible into the Company's common stock at the holder's option, at the conversion rate of 60% of the lowest
  three day trading price for ten trading days immediately preceding the date of conversion.
  On
  October 23, 2013, the Company issued a $42,500 Convertible Promissory Note which bears interest at a rate of 8%, due on July
  25,2014 and is convertible into the Company's common stock at the holder's option, at the conversion rate of 60%
  of the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount of
  principal or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per
  annum from the due date thereof until the same is paid("Default Interest") and the note also has prepayment
  penalty clause.
  On
  January 30, 2014, the Company issued a $78,500 Convertible Promissory Note which bears interest at a rate of 8%, due on November
  3, 2014 and is convertible into the Company's common stock at the holder's option, at the conversion rate of 60% of
  the lowest three day trading price for ten trading days immediately preceding the date of conversion. Any amount of principal
  or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from
  the due date thereof until the same is paid ("Default Interest") and the note also has prepayment penalty clause.
  The Company received a net of $185,000 from
  the debenture holder, $6,500 was paid towards the accrued legal expenses and due diligence fees and $36,000 toward legal and professional
  fees and $25,000 was paid toward accrued professional fees.
  Table of Contents
  15
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)
  During the nine months ended September 30,
  2014, the Company paid $131,500 for July 2013, August 2013 and October 2013 note. In addition, the Company paid $42,500 as a prepayment
  penalty which has been recorded as interest expense.
  The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in January 2014. These embedded derivatives included
  certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record
  the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as
  of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a fair
  value of $130,485 of the embedded derivative. The fair value of the embedded derivative was determined using the Binomial
  Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  268.98
  %
  Risk free rate:
  0.08
  %
  The
  initial fair value of the embedded debt derivative of $130,485 was allocated as a debt discount up to the proceeds of the note
  ($78,500) with the remainder ($51,985) charged to current period operations as interest expense for the nine months ended September
  30, 2014.
  Convertible
  debenture December 2013 and January 2014
  During
  the nine months ended September 30, 2014, the Company issued two notes of total a $228,500 Convertible Promissory Note which bears
  interest at a rate of 8%, due on July 20, 2014 and January 30, 2015 and is convertible into the Company's common stock at
  the holder's option, at the conversion rate of 60% of the lowest three day trading price for ten trading days immediately
  preceding the date of conversion. Any amount of principal or interest on this Note which is not paid when due shall bear interest
  at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest")
  and the note also has prepayment penalty clause.
  The
  Company identified embedded derivatives related to the Convertible Promissory Note entered into in January
  2014. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial
  instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible
  Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible
  Promissory Note, the Company determined a fair value of $383,457 of the embedded derivative. The fair value of the embedded
  derivative was determined using the Binomial Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  267.19%-268.98
  %
  Risk free rate:
  0.07%-0.10
  %
  The
  initial fair value of the embedded debt derivative of $383,457 was allocated as a debt discount up to the proceeds of the note
  ($228,5
  00) with the remainder ($154,957) charged to current period operations as interest expense for the nine months ended
  September 30, 2014.
  Table of Contents
  16
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)
  Convertible debenture October 2013, December
  2013 and February 2014
  During
  the nine months ended September 30, 2014, the Company issued notes of total a $25,000 Convertible Promissory Note which bears
  interest at a rate of 8%, due on February 20, 2016 and is convertible into the Company's common stock at the holder's
  option, at the conversion rate of 60% of the lowest three day trading price for ten trading days immediately preceding the date
  of conversion. Any amount of principal or interest on this Note which is not paid when due shall bear interest at the rate of
  twenty two percent (22%) per annum from the due date thereof until the same is paid ("Default Interest") and the note
  also has prepayment penalty clause.
  The
  Company identified embedded derivatives related to the Convertible Promissory Note entered into in January
  2014. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial
  instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible
  Promissory Note and to adjust the fair value as of each subsequent balance sheet date. At the inception of the Convertible
  Promissory Note, the Company determined a fair value of $39,722 of the embedded derivative. The fair value of the embedded
  derivative was determined using the Binomial Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  270.02
  %
  Risk free rate:
  0.34
  %
  The
  initial fair value of the embedded debt derivative of $39,722 was allocated as a debt discount up to the proceeds of the note
  ($25,000) with the remainder ($14,722) charged to current period operations as interest expense for the nine months ended September
  30, 2014.
  Convertible
  debenture January 2014
  During
  the nine months ended September 30, 2014, the Company issued notes of total a $11,209 Convertible Promissory Note which bears
  interest at a rate of 8%, due on June 2, 2014 and is convertible into the Company's common stock at the maker's option,
  at the conversion rate of 40% of the lowest three day trading price for ten trading days immediately preceding the date of conversion.
  Any amount of principal or interest on this Note which is not paid when due shall bear interest at the lesser of i) 10 percent
  (10%) per annum or ii) the maximum rate allowed under the applicable law until paid in full or until the Note is reinstated.
  The
  Company analyzed the convertible debts for derivative accounting consideration under ASC 815 "Derivatives and
  Hedging" and determined that derivative accounting is not applicable. The Company further analyzed the convertible
  debts for a beneficial conversion feature under ASC 470-20 on the date of the notes and determined that a beneficial
  conversion feature exists. The intrinsic value of the beneficial conversion feature was determined to be $7,473 and was
  recorded as debt discount.
  The fair value of the described
  embedded derivative for all the convertible note is of $459,711 at September 30, 2014 was determined using the Binomial
  Lattice Model with the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  266.94
  %
  Risk free rate:
  0.05%-0.41
  %
  Table of Contents
  17
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 8 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  (Continued)
  Convertible debenture August 2014 and
  September 2014
  During the nine months ended September
  30, 2014, the Company issued notes of total a $60,388 Convertible Promissory Note which bears interest at a rate of 12%, due
  on November 1, 2014 and is convertible into the Company's common stock at the holder's option, at the conversion
  rate of 60% of the lowest day trading price for ten trading days immediately preceding the date of conversion.
  The Company identified embedded
  derivatives related to the Convertible Promissory Note entered into in August and September 2014. These embedded derivatives
  included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company
  record the fair value of these derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair
  value as of each subsequent balance sheet date. At the inception of the Convertible Promissory Note, the Company determined a
  fair value of $100,646 of the embedded derivative. The fair value of the embedded derivative was determined using the
  Binomial Lattice Model based on the following assumptions:
  Dividend yield:
  -0-
  %
  Volatility
  304.14%-309.19
  %
  Risk free rate:
  0.02
  %
  The initial fair value of the embedded debt
  derivative of $100,646 was allocated as a debt discount up to the proceeds of the note ($60,388) with the remainder ($40,258) charged
  to current period operations as interest expense for the nine months ended September 30, 2014.
  At September 30, 2014, the Company adjusted
  the recorded fair value of the derivative liability to market on all notes resulting in non-cash, non-operating loss of $238,381
  for the nine months ended September 30, 2014.
  During the nine months ended September
  30, 2014 and 2013 the Company amortized $335,021 and $45,864, respectively,of beneficial debt discount to the operations as
  interest expense
  Table of Contents
  18
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 9 - CONVERTIBLE NOTES PAYABLE - RELATED
  PARTIES
  Convertible Notes payable - related parties
  consist of the following
  September 30,
  2014
  December 31,
  2013
  Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.
  $
  1,710
  $
  17,000
  Convertible note issued in October 2013, unsecured, interest at 8%, due on demand.
  51,370
  194,254
  Convertible note issued in January 2014, unsecured, interest at 10%, due on demand.
  45,000
  —
  Convertible note issued on April 3, 2014, unsecured, interest at 10%, due on demand.
  14,000
  —
  Convertible note issued on April 1, 2014, unsecured, interest at 10%, due on demand.
  45,000
  —
  Convertible note issued on May 21, 2014, unsecured, interest at 10%, due on demand.
  4,000
  —
  Convertible note issued on June 4, 2014, unsecured, interest at 16%, due on April 1, 2000.
  30,542
  —
  Convertible note issued on July 1, 2014, unsecured, interest at 10%, due on demand.
  45,000
  —
  Total convertible notes payable - related parties
  236,622
  211,254
  Less: current portion
  (236,622
  )
  (211,254
  )
  Long-term convertible notes payable - related parties
  $
  —
  $
  —
  Convertible debenture October 2013
  On October 1, 2013 the Company issued a $17,000
  Convertible Promissory Note against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $15,692 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $15,692 was amortized.
  Table of Contents
  19
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 9 - CONVERTIBLE NOTES PAYABLE -
  RELATED PARTIES (Continued)
  Convertible debenture October 1, 2013
  On October 2013 the Company issued a $194,254
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $179,312 and was recorded as debt discount. During the year ended December 31, 2013, debt discount
  of $179,312 was amortized.
  Convertible debenture January 1, 2014
  On January 2014 the Company issued a $45,000
  Convertible Promissory Note against the account payable, which bears interest at a rate of 10%, payable on demand and is convertible
  into the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior
  to date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  Convertible debenture April, May, June
  and July 2014
  The Company issued a total of $138,542 Convertible
  Promissory Notes against the accounts payable, which bears interest at a rate of 10%, payable on demand and is convertible into
  the Company's common stock at the holder's option at 40% discount to the lowest trading price in five days prior to
  date of notice of conversion. Additionally in no event the floor price for the exercise can't go below $0.00004. If these notes
  are converted at this rate, the number of shares issued would be in excess of the authorized limit of share issuance. If the Borrower
  is unable to issue any shares under this provision due to the fact that there is an insufficient number of authorized and unissued
  shares available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
  that Borrower takes immediate steps required to get the appropriate level of approval from shareholders or the board of directors,
  where applicable to raise the number of authorized shares to satisfy the Notice of Conversion. In the event of default the Company
  has to pay 150% time the sum of outstanding principal and accrued interest. The note also has prepayment penalty clause.
  Table of Contents
  20
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 9 - CONVERTIBLE NOTES PAYABLE -
  RELATED PARTIES (Continued)
  The Company analyzed the convertible debts
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable. The Company further analyzed the convertible debts for a beneficial conversion feature under ASC 470-20 on the
  date of the notes and determined that a beneficial conversion feature exists. The intrinsic value of the beneficial conversion
  feature was determined to be $45,000 and was recorded as debt discount. During the nine months ended September 30, 2014, debt discount
  of $45,000 was amortized.
  For the nine months ended September 30,
  2014 and 2013, interest expenses charged on the above three notes is $6,306 and $0, respectively. Accrued interest on
  convertible notes payable – related parties as of September 30, 2014 and December 31, 2013 was $11,149 and $4,843,
  respectively
  NOTE 10 - NOTES PAYABLE - RELATED PARTIES
  Notes payable - related parties consist of the following:
  September 30,
  2014
  December 31,
  2013
  Note payable to a shareholder, secured by tangible and intangible assets of the Company, interest at 16% per annum, principal and interest due April 1, 2000, past due.  Note is convertible into common stock of the Company at $0.10 per share. Note is in default. (2)
  $
  1,080,973
  $
  1,087,370
  Note payable to a related individual, interest at 8% per annum,past due. Note is in default. (1)
  1,000,000
  1,000,000
  Notes payable to related individuals, unsecured, interest at 10%,due on demand. (3)
  28,500
  28,500
  Notes payable to related individual, unsecured, interest at 12%,due on demand. (4)
  27,568
  Total notes payable - related parties
  2,137,041
  2,115,870
  Less: current portion
  (2,137,041
  )
  (2,115,870
  )
  Long-term notes payable - related parties
  $
  —
  $
  —
  Maturities of notes payable - related parties are as follows:
  Year Ending September 30,
  Amount
  2015
  $
  2,137,041
  Total
  $
  2,137,041
  Accrued interest on notes payable
  – related parties as of September 30, 2014 and December 31, 2013 was $315,038 and $250,334, respectively. During the
  nine months ended September 30, 2014, total interest expense to related party was $153,213.
  Table of Contents
  21
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 10 - NOTES PAYABLE - RELATED PARTIES
  (Continued)
  1)
  This note was issued for the acquisition
  of AFI on January 28, 2012. As of September 30, 2014 and December 31, 2013, the Company had accrued interest on the note in the
  amount of $193,753 and $154,082, respectively.
  2)
  This note was originally issued for $450,000.
  During the year ended December 31, 2013, the principle value of $450,000 along with accrued interest of $837,369 was converted
  to two new notes for $1,087,370 and $200,000. During the year 2013 the Company issued 2,100,000 shares of the common stock against
  settlement of the new note of $200,000
  3)
  During the year ended December 31,
                                                                                                         2013, one of the note holder for $15,000 along with accrued interest of $13,300 transfer edits loan to a non- related party.
                                                                                                         During the year 2013 itself the Company issued 1,800,000 shares of the common stock to settle$28,300 of note of non- related
                                                                                                         party.
  4)
  During the quarter ended September 30, 2014,
  the Company issued a total of $27,568 in new notes to a related party.
  NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS
  ASC 820 defines fair value as the price that
  would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
  measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the
  asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs
  can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on
  the observability of those inputs.
  The following tables set forth by level
  within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value as
  of September 30, 2014 and December 31, 2013. As required by ASC 820, a financial instrument's level within the fair
  value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company's
  assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the
  valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. There were no
  transfers between fair value hierarchy levels for the periods ended September 30, 2014 and December 31, 2013.
  The carrying amounts reported in the balance
  sheets for cash, accounts receivable, loans payable, and accounts payable and accrued expenses, approximate their fair market value
  based on the short-term maturity of these instruments. The following table presents assets and liabilities that are measured and
  recognized at fair value as of September 30, 2014 on a recurring basis:
  Assets and liabilities at fair value on a
  recurring basis at September 30, 2014:
  Level 1
  Level 2
  Level 3
  Total
  Liabilities
  Derivative liability
  —
  —
  $
  448,019
  $
  448,019
  Total
  —
  —
  $
  448,019
  $
  448,019
  Table of Contents
  22
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS
  (Continued)
  The following table provides a summary of
  changes in fair value of the Company's Level 3 financial liabilities as of September 30, 2014:
  Derivative
  Liability
  Balance, December 31, 2013
  $
  558,548
  Initial fair value of debt derivatives at note issuances
  803,378
  Derivative Liability on conversion of notes
  (703,989
  )
  -Embedded debt derivatives
  (209,918
  )
  Balance, September 30, 2014
  $
  448,019
  Net gain for the period included in earnings relating to the liabilities held at September 30, 2014
  $
  209,918
  The carrying value of short term financial
  instruments including cash, accounts payable, accrued expenses and short-term borrowings approximate fair value due to the short
  period of maturity for these instruments. The long-term debentures payable approximates fair value since the related rates of interest
  approximate current market rates.
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  Preferred Stock
  The Company is authorized to issue
  200 preferred shares of $0.0001 par value. As of September 30, 2014 and December 31, 2013 the Company has 200 shares of
  preferred stock issued and outstanding. Although the preferred stock carries no dividend, distribution, liquidation or
  conversion rights, each share of preferred stock carries ten million (10,000,000) votes and holders of our preferred stock
  are able to vote together with our common stockholders on all matters. Consequently, the holder of our preferred stock is
  able to unilaterally control the election of our board of directors and, ultimately, the direction of our Company.
  Common stock
  The Company is authorized to issue
  2,500,000,000 shares of $0.0001 par value of common stock. As of September 30, 2014 and December 31, 2013 the Company
  had 1,413,672,725 and 37,709,552 shares of common stock as issued and outstanding.
  On January 13, 2014, the Company issued an
  aggregate of 2,859,067 shares of its common stock to certain consulting personnel for services provided.
  On January 14, 2014, the Company converted
  into 1,660,026 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On January 16, 2014, the Company issued a
  promissory note in the original principal amount of $3,000 to a lender. The Note matures on July 16, 2014 and carries an interest
  rate of 8% per annum.
  Table of Contents
  23
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On January 22, 2014, the Company issued a
  Note in the original principal amount of $212,500. The Note carries an interest rate of 8% per annum. The Note shall at the maturity
  date, be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid
  and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading prices
  as reported on the OTCQB for the ten trading days previous to the conversion date. The net proceeds of the Note were used to redeem
  and retire two 8% convertible notes that were issued to Asher Enterprises, Inc. in the aggregate principal amount of $131,500.
  The Asher Notes were issued on July 19th, 2013 and August 26th, 2013.
  On January 22, 2014, the Company issued a
  promissory note in the original principal amount of $5,000 to a lender. The Note matures on July 22, 2014 and carries an interest
  rate of 8% per annum.
  On January 29, 2014, the Company converted
  into 1,166,667 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On January 30, 2014, the Company issued a
  promissory note in the original principal amount of $16,000 to a lender. The Note matures on January 30, 2015 and carries an interest
  rate of 8% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests
  conversion.
  On January 30, 2014, the Company issued a
  promissory note in the original principal amount of $78,500 to a lender. The Note matures on November 3, 2014 and carries an interest
  rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.
  On January 30, 2014, the Company issued
  a promissory note in the original principal amount of $11,209 to a lender. The Note matures on June 2, 2014 and carries an
  interest rate of 10% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable
  shares of Common Stock of the Company at a 40% discount to the market.
  On February 10, 2014, the Company converted
  into 1,237,624 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On February 18, 2014, the Company converted
  into 1,470,588 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On February 20, 2014, the Company recorded
  an additional $25,000 draw down and consideration in respect of a credit line and associated promissory note in the original principal
  amount of $300,000. The Maturity Date is two years from the effective date of each draw down. The Note carries an initial interest
  rate in the first 90 days of 0%, thereafter a one-time interest charge of 12% will apply. The Note shall at the Maturity Date,
  be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable
  shares of Common Stock of the Company at 60% of the average of the two lowest trade prices in the 25 trading days previous to the
  conversion.
  On March 3, 2014, the Company issued 1,000,000
  shares of its common stock to a consultant of the Company for services provided.
  On March 4, 2014, the Company converted into
  2,083,333 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  Table of Contents
  24
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On March 5, 2014, the Company issued a
  promissory note in the original principal amount of $10,000 to a lender. The Note matures on September 5, 2014 and carries an
  interest rate of 8% per annum. The Note at the election of the lender is convertible into fully paid and non-assessable
  shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported
  on the OTCQB for the ten trading days previous to the conversion date.
  On March 17, 2014, the Company converted
  into 2,210,884 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On March 21, 2014, the Company issued 1,200,000
  shares of its common stock to a consultant of the Company for services provided.
  On March 31, 2014, the Company converted
  into 2,529,762 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On April 1, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On April 1, 2014, the Company issued a
  promissory note in the original principal amounts of $25,000 to a consultant of the Company for services rendered. The Note
  carries an interest rate of 10% per annum, and at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a conversion price of $0.005 per share.
  On April 1, 2014, the Company issued a
  promissory note in the original principal amounts of $93,000 to a consultant of the Company for services rendered. The Note
  carries an interest rate of 10% per annum, and at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 25%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  On April 1, 2014, the Company converted into
  744,048 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On April 1, 2014, the Company issued a promissory
  note in the original principal amount of $145,000 to a lender. The Note carries an interest rate of 8% per annum. The Note shall
  at the maturity date, be due and payable in full unless converted partially or in its entirety upon the election of the lender
  into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily
  trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.
  On April 1, 2014, the Company issued
  a promissory note in the original principal amount of $6,669 to a lender. The Note matures on May 1, 2014 and carries
  an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  Table of Contents
  25
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On April 1, 2014, the Company issued a promissory
  note in the original principal amount of $83,500 to a lender. The Note matures on January 2, 2015 and carries an interest rate
  of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion date.
  On April 3, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $14,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On April 7, 2014, the Company converted
  into 1,200,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.
  On April 8, 2014, the Company converted into
  1,070,205 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On April 9, 2014, the Company converted into
  3,656,379 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On April 9, 2014, the Company issued
  a promissory note in the original principal amount of $2,679.16 to a lender. The Note matures on May 9, 2014 and carries
  an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  On April 28, 2014, the Company converted
  into 2,400,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.
  On May 2, 2014, the Company converted into
  3,125,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On May 2, 2014, the Company converted
  into 2,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.
  On May 6, 2014, the Company converted
  into 6,854,167 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 23, 2013.
  On May 6, 2014, the Company converted into
  3,125,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On May 7, 2014, the Company converted into
  5,630,630 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On May 7, 2014, the Company converted into
  3,400,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.
  On May 7, 2014, the Company converted into
  3,400,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.
  Table of Contents
  26
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On May 7, 2014, the Company converted into
  995,833 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  23, 2013.
  On May 8, 2014, the Company converted into
  4,504,504 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On May 9, 2014, the Company converted into
  5,000,000 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.
  On May 9, 2014, the Company converted into
  4,750,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  23, 2013.
  On May 9, 2014, the Company converted into
  3,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.
  On May 12, 2014, the Company issued 500,000
  shares of its common stock to a director of the Company for services provided.
  On May 13, 2014, the Company converted into
  3,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.
  On May 13, 2014, the Company issued 500,000
  shares of restricted common stock to a consultant for services rendered.
  On May 15, 2014, the Company converted into
  9,615,384 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On May 16, 2014, the Company issued
  a promissory note in the original principal amount of $1,975 to a lender. The Note matures on November 16, 2014 and carries
  an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  On May 19, 2014, the Company issued 500,000
  shares of restricted common stock to a consultant for services rendered.
  On May 21, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $4,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On May 22, 2014, the Company converted into
  4,166,667 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On May 23, 2014, the Company converted
  into 3,505,263 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 23, 2013.
  On May 13, 2014, the Company converted
  into 3,750,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.
  Table of Contents
  27
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On May 15, 2014, the Company converted into
  9,567,901 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On May 29, 2014, the Company converted into
  3,571,428 shares of common stock, a portion of a loan originally received by the Company on October 5, 2013.
  On May 13, 2014, the Company converted
  into 5,044,270 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.
  On May 30, 2014, the Company converted into
  4,461,282 shares of common stock, a portion of a loan originally received by the Company on October 14, 2013.
  On May 30, 2014, the Company converted into
  1,050,410 shares of common stock, a loan originally received by the Company on August 13, 2013.
  On June 3, 2014, the Company converted into
  6,987,877 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On June 3, 2014, the Company converted into
  16,025,641 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On May 19, 2014, the Company issued 2,000,000
  shares of restricted common stock to a consultant for services rendered.
  On June 11, 2014, the Company converted into
  17,948,718 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On June 11, 2014, the Company converted into
  8,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  2, 2013.
  On June 12, 2014, the Company converted into
  8,240,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On June 23, 2014, the Company converted into
  18,055,556 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On June 26, 2014, the Company converted into
  4,545,455 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  4, 2013.
  On June 27, 2014, the Company converted into
  6,437,879 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.
  On June 30, 2014, the Company issued
  a promissory note in the original principal amount of $1,928.50 to a lender. The Note matures on December 30, 2014 and
  carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  Table of Contents
  28
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On July 1, 2014, the Company
  converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 to a
  consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the
  election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On July 1, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.
  On July 14, 2014, the Company converted into
  24,057,318 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  On July 14, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.
  On July 14, 2014, the Company converted into
  15,517,241 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company in February,
  2000.
  On July 15, 2014, the Company converted into
  14,202,945 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on October
  1, 2013.
  On July 15, 2014, the Company converted
  into 14,291,666 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 1, 2013.
  On July 17, 2014, the Company converted
  into 25,757,576 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.
  On July 18, 2014, the Company converted
  into 8,400,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 2, 2013.
  On July 22, 2014, the Company converted
  into 16,428,571 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 1, 2013.
  On July 23, 2014, the Company converted
  into 13,047,619 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  in February, 2000.
  On July 24, 2014, the Company converted
  into 21,323,529 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.
  On July 24, 2014, the Company converted
  into 6,944,444 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  March 21, 2012.
  On July 24, 2014, the Company converted
  into 10,401,348 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on October 2, 2013.
  On July 30, 2014, the Company converted
  into 37,037,037 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company
  on December 12, 2013.
  Table of Contents
  29
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On August 6, 2014, the Company
  converted into 21,851,852 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.
  On August 6, 2014, the Company issued a promissory
  note in the original principal amount of $5,000 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.
  On August 6, 2014, the Company
  converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 7, 2014, the Company issued a promissory
  note in the original principal amount of $1,569 to a lender. The Note is due upon demand, and carries an interest rate of 12% per
  annum.
  On August 11, 2014, the Company
  converted into 26,812,500 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on December 12, 2013.
  On August 11, 2014, the Company
  converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 12, 2014, the Company
  converted into 15,131,579 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on March 5, 2013.
  On August 13, 2014, the Company
  converted into 29,761,905 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.
  On August 19, 2014, the Company
  converted into 16,666,667 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 20, 2014, the Company
  converted into 36,826,054 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 22, 2014, the Company
  converted into 24,888,889 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 22, 2014, the Company
  converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.
  On August 22, 2014, the Company
  converted into 52,729,500 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 30, 2014.
  On August 25, 2014, the Company
  converted into 40,476,190 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.
  On August 29, 2014, the Company
  issued a promissory note in the original principal amount of $7,000 to a lender. The Note matures on November 1, 2014 and
  carries an interest rate of 12% per annum. The Note, at the election of the lender is convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days in the
  ten trading days previous to the conversion.
  Table of Contents
  30
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 12 - COMMON AND PREFERRED STOCK TRANSACTIONS
  (Continued)
  On September 2, 2014, the Company converted
  into 30,833,333 shares of common stock, a portion of a certain convertible promissory note originally issued by the Company on
  October 5, 2013.
  On September 10, 2014, the Company
  converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.
  On September 10, 2014, the Company
  converted into 76,923,077 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.
  On September 17, 2014, the Company
  converted into 48,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 2, 2013.
  On September 18, 2014, the Company
  converted into 53,720,027 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.
  On September 18, 2014, the Company
  converted into 50,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 2, 2013.
  On September 4, 2014, the Company issued
  a promissory note in the original principal amount of $6,000 to a lender. The Note is due upon demand, and carries an interest
  rate of 12% per annum.
  On September 26, 2014, the Company
  converted into 95,000,000 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on January 21, 2014.
  On September 30, 2014, the Company
  converted into 63,583,333 shares of common stock, a portion of a certain convertible promissory note originally issued by the
  Company on October 1, 2013.
  NOTE 13 - OPTIONS
  The Company has adopted FASB ASC 718, "Share-Based
  Payments" ("ASC 718") to account for its stock options. The Company estimates the fair value of each stock award
  at the grant date by using the Black-Scholes option pricing model. The assumptions used to calculate the fair value of options
  granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Compensation expense is recognized
  only for those options expect to vest, with forfeitures estimated at the date of grant based on our historical experience and future
  expectations.
  The following table summarizes the changes
  in options outstanding issued to employees of the Company:
  Number of Shares
  Weighted Average Exercise Price
  Outstanding as of January 1, 2014
  370,000
  $
  1.34
  Granted
  —
  —
  Exercised
  —
  —
  Cancelled
  —
  —
  Outstanding at September 30, 2014
  370,000
  $
  1.34
  Table of Contents
  31
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2014
  NOTE 13 - OPTIONS (Continued)
  Common stock options outstanding and exercisable
  as of September 30, 2014 are:
  Options Outstanding
  Options Exercisable
  Expiration
  Date
  Exercise Price
  Number shares outstanding
  Weighted Average Contractual Life (Years)
  Number Exercisable
  Weighted Average Exercise Price
  October  1, 2018
  $
  0.01
  70,000
  4.00
  63,319
  $
  0.01
  January 2, 2019
  1.65
  300,000
  4.25
  199,725
  1.65
  Total
  370,000
  263,044
  During the year ended December 31, 2013,
  the Company granted 300,000 stock options with an exercise price of $1.65 out of which 75,000 were immediately vested and balance
  vesting over three years and expiring six years from issuance date.
  The fair value of the vested portion of $103,218was
  charged to expenses and additional paid in capital during the nine months ended September 30, 2014.
  The fair value of these stock options granted
  and the significant assumptions used to determine those fair values, using a Black-Scholes option-pricing model are as follows:
  Significant assumptions:
  Risk-free interest rate at grant date
  1.04%-0.89
  %
  Expected stock price volatility
  199.38%-344.22
  %
  Expected dividend payout
  —
  Expected option life-years
  6
  NOTE 14 – SUBSEQUENT EVENTS
  Subsequent to September 30, 2014, the Company
  issued 522,916,666 shares of common stock as part of settlement agreements with debt holders of the Company.
  Table of Contents
  32
  ITEM 2. MANAGEMENT'S DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  The following
  discussion of the financial condition and results of operations of Fuelstream, Inc. (hereafter, "Fuelstream," the
  "Company," "we," "our," or "us") should be read in conjunction with the
  Unaudited Financial Statements and related Notes thereto included herein. This discussion may contain forward-looking
  statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
  1934, including, without limitation, statements regarding the Company's expectations, beliefs, intentions, or future
  strategies that are signified by the words "expects," "anticipates," "intends,"
  "believes," or similar language. Actual results could differ materially from those projected in the forward looking
  statements. Prospective investors should carefully consider the information set forth herein, and the Company cautions
  investors that its business and financial performance is subject to substantial risks and uncertainties.
  Overview
  We are an in-wing
  and on-location supplier and distributor of aviation fuel to corporate, commercial, military, and privately-owned aircraft
  throughout the world. We also provide a variety of ground services either directly or through our affiliates, including
  concierge services, passenger and baggage handling, landing rights, coordination with local aviation authorities, aircraft
  maintenance services, catering, cabin cleaning, customs approvals, and third-party invoice reconciliation. Our personnel
  assist customers in flight planning and aircraft routing aircraft, obtaining permits, arranging overflies, and flight follow
  services.
  Our core business has
  developed as a result of a joint venture and eventual acquisition of Aviation Fuel International, Inc., now a wholly-owned subsidiary
  of the Company ("AFI"). The Company's principal sources of revenues are expected to result from the gross selling
  price of fuel delivery contracts and associated services. Expenses which comprise the costs of goods sold are expected to include
  the acquisition price of fuel transported, as well as operational and staffing costs of the trucks and other vehicles used for
  delivery. General and administrative expenses have been comprised of administrative wages and benefits; occupancy and office expenses;
  outside legal, accounting and other professional fees; travel and other miscellaneous office and administrative expenses. Selling
  and marketing expenses include selling/marketing wages and benefits; advertising and promotional expenses; travel and other miscellaneous
  related expenses.
  On June 21, 2012
  the Company entered into an agreement to create a fuel logistics joint venture with South African based Global Airways
  ("Global"). Global is an international air transport organization whose activities cover acquisition,
  refurbishment, heavy maintenance, leasing and chartering of air crafts throughout South Africa. We expect that this
  transaction will expand the Company's international footprint in a market that is developing standardized systems to
  meet the aviation fueling needs of commercial and cargo carriers.
  The partnership with
  Global underlines the company's strategic plan to generate new revenue streams by partnering with aircraft leasing and MRO businesses
  and includes the development, operation and management of the fuel storage, supply and logistic operations located in South Africa.
  It is anticipated that the partnership will oversee the logistics delivery of up to 3 Million gallons of Jet-A Fuel per month by
  the end of 2013 if the Company is able to secure sufficient means of financing the purchase of such fuel.
  Our ability to generate
  revenues during the year 2014 and beyond depends substantially upon the Company's resources available in order to develop
  and grow the business of AFI as a supplier of fuel and logistics. Such efforts require significant systems development, marketing
  and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding, its ability to generate
  revenues will be significantly impaired and we may be unable to continue operations.
  Table of Contents
  33
  Because the Company has
  incurred losses, income tax expenses are immaterial. No tax benefits have been booked related to operating loss carryforwards,
  given the uncertainty of the Company being able to utilize such loss carryforwards in future years. We anticipate incurring additional
  losses during the coming year.
  Results of Operations
  Following is management's
  discussion of the relevant items affecting results of operations for the three and nine month periods ended September 30, 2014
  and 2013.
  Revenues.
  The Company generated net revenues of $382,073 during the three months ended September 30, 2014 as compared to $30,000 for
  the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company generated net revenues
  of $639,661 as compared to $30,000 for the nine months ended September 30, 2013. In the future, the Company's sole
  source of revenue is expected to be related to fuel delivery contracts and associated services.
  Cost of
  Sales.
  Our cost of sales for the three months ended September 30, 2014 was $313,476 as compared to $26,895 for the three
  months ended September 30, 2013. For the nine months ended September 30, 2014, our cost of sales was $534,371 as compared to
  $26,895 for the nine months ended September 30, 2013. Our cost of sales consisted principally of the acquisition price of
  fuel and other petrochemicals delivered to customers and clients, other related services provided directly or outsourced
  through our affiliates, as well as operational and staffing costs with respect thereto. The increase is a direct correlation
  to the increase in sales as described above.
  Selling,
  General and Administrative Expenses.
  Selling, general and administrative expenses for the three months ended
  September 30, 2014 were $448,022 compared to $444,265 during the three months ended September 30, 2013. During the nine
  months ended September 30, 2014, selling, general and administrative expenses were $1,337,944 compared to $1,363,113 during
  the nine months ended September 30, 2013. The decrease is mainly the result of a decrease in the issuance of shares for
  compensation. The Company expects that salaries and consulting expenses, that are cash-based instead of share-based, will
  increase as we add personnel to build our fuel brokerage business.
  Other
  Income (Expense)
  . The Company had net other expenses of $739,386 for the three months ended September 30, 2014 compared
  to $547,955 during the three months ended September 30, 2013. For the nine months ended September 30, 2014, the Company had
  net other expenses of $1,706,719 compared to $807,840 during the nine months ended September 30, 2013. Other expenses
  incurred were comprised primarily of interest expenses related to notes payable including amortization of debt discount and
  setoff with gain on change in derivative liability and a gain on the conversion of debt. During the nine months ended
  September 30, 2014 and 2013, interest expense was $2,029,094 and $1,015,940, respectively. Included in interest expense was
  the amortization of debt discount of $1,176,353 and $328,716 for the nine months ended September 30, 2014 and 2013,
  respectively. The gain on change in derivative liability was $209,918 and $208,100 for the nine months ended September 30,
  2014 and 2013, respectively. The gain on the conversion of debt was $112,457 and $-0- for the nine months ended September 30,
  2014 and 2013, respectively.
  Net
  Loss
  . The Company had a net loss of $1,118,811 for the three months ended September 30, 2014 compared to $989,115 during
  the three months ended September 30, 2013. The Company had a net loss of $2,939,373 for the nine months ended September 30,
  2014 compared to $2,167,848 during the nine months ended September 30, 2013. The increase in net loss was mainly due to the
  increase in interest expenses.
  Table of Contents
  34
  Liquidity and Capital Resources
  As of September 30, 2014,
  our primary source of liquidity consisted of $60,049 in cash and cash equivalents. We hold most of our cash reserves in local checking
  accounts with local financial institutions. Since inception, we have financed our operations through a combination of short and
  long-term loans, and through the private placement of our common stock.
  We have sustained significant
  net losses which have resulted in a total stockholders' deficit at September 30, 2014 of $6,420,809 and are currently experiencing
  a substantial shortfall in operating capital which raises doubt about our ability to continue as a going concern. We anticipate
  a net loss for the year ended December 31, 2014 and with the expected cash requirements for the coming months, without additional
  cash inflows from an increase in revenues combined with continued cost-cutting or a receipt of cash from capital investment, there
  is substantial doubt as to the Company's ability to continue operations.
  There is presently no
  agreement in place with any source of financing for the Company and we cannot assure you that the Company will be able to raise
  any additional funds, or that such funds will be available on acceptable terms. Funds raised through future equity financing will
  likely be substantially dilutive to current shareholders. Lack of additional funds will materially affect the Company and its business,
  and may cause us to cease operations. Consequently, shareholders could incur a loss of their entire investment in the Company.
  Off-Balance
  Sheet Arrangements
  We
  do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
  condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
  resources that is material to investors.
  Contractual
  Obligations
  As
  a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this
  information.
  Critical accounting policies
  The preparation of financial statements in
  conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities,
  the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods.
  The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We
  also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to
  understanding our results, which are described in Note 4 to our audited consolidated financial statements for 2013 appearing in
  our Annual Report on Form 10-K for the year ended December 31, 2013.
  Recent accounting pronouncements
  The recent accounting standards that have
  been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not
  expected to have a material impact on our unaudited condensed consolidated financial statements upon adoption.
  ITEM
  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  As a smaller reporting
  company we are not required to provide this information.
  Table of Contents
  35
  ITEM
  4. CONTROLS AND PROCEDURES
  Management's Evaluation on 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 under the
  Securities
  Exchange Act of 1934
  , as amended, is recorded, processed, summarized and reported within the time periods specified in the
  Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management,
  to allow for timely decisions regarding required disclosure.
  As of September 30,
  2014, the end of our third quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and
  Controller, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the
  foregoing, we concluded that our disclosure controls and procedures were not effective as of the end of the period covered by
  this quarterly report. Our board of directors has only one member. We do not have a formal audit committee.
  Changes in Internal Control over Financial
  Reporting
  There have been no
  significant changes in our internal controls over financial reporting that occurred during the quarter ended September 30,
  2014 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
  Table of Contents
  36
  PART II
  OTHER INFORMATION
  ITEM
  1. LEGAL PROCEEDINGS
  Ryan International
  Airlines
  . One of our subsidiaries, Aviation Fuel International ("AFI") is involved in disputes with two airlines:
  Ryan International Airlines, LLC ("Ryan") and Direct Air. Both aviation fuel customers litigation arise out of disputed
  amounts for the delivery of Jet Fuel. Ryan Air failed to pay for fuelings received from AFI. AFI filed under the commercial lien
  laws as required to secure a lien on the planes fueled in order to protect their receivable due from Ryan. Disagreements between
  the parties resulted in both parties filing separate lawsuits in three actions. Ryan filed a cause of action in Case No. 09-57580,
  Ryan International Airlines, Inc. v. Aviation Flight Services, LLC ("AFS") and Aviation Fuel International, Inc.,
  ("AFI")
  , and sought recovery of $1,491,308.66 allegedly paid to AFS as pre-payment of aviation fuel and flight
  services under a contractual relationship between Ryan and AFS. AFI moved to dismiss the action, to which, Ryan has subsequently
  filed a notice of removal to the Federal District Court for the Northern District of Illinois, Bankruptcy Division Case No.: 12-80802.
  AFI filed an action for breach of contract for Ryan's failure to pay certain Jet Fuel invoices for the delivery of fuel in
  the amount of $678,000 plus interest;
  Aviation Fuel International v. Ryan International Airlines, Inc., a Kansas corporation,
  Wells Fargo Bank Northwest, Trustee N.A., a Utah corporation, RUBLOFF 757-MSN24794LLC, an Illinois limited liability company, RYAN
  767 LLC, an Illinois limited liability company, AFT TRUST SUB I, a Delaware corporation, RYAN 767 N123 LLC, an Illinois limited
  liability company, and RUBLOFF 440 LLC, an Illinois corporation
  , Civil Action Case No. CACE 10-037788-04. AFI also filed the
  corresponding claims of liens under the FAA Aircraft Registration Branch, for each plane, registered and tail wing number listed
  therein. This action has also been recently noticed for been removal to the Federal District Court for the Northern District of
  Illinois, Bankruptcy Division Case No.: 12-80802. In addition, as a result of Ryan's filing a Federal Involuntary Bankruptcy
  Petition against Aviation Flight Services ("AFS") on June 10, 2010, Case No.: 10-27313-JKO, (S.D. of Fla.), our subsidiary
  AFI, also filed and was discharged as a creditor in the amount of $269,000. However, the obligations for the unpaid fuelings owed
  to AFI still remain outstanding as obligations due to AFI.
  Southern Sky Air Tours,
  d/b/a Myrtle Beach Direct Air and Tours (Direct Air)
  . On or about March 13, 2012, Southern Sky Air Tours, d/b/a Myrtle Beach
  Direct Air and Tours ("Direct Air") ― a public charter operator ― ceased operations. Direct Air has subsequently
  filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of Massachusetts (Worcester)(Case no. 12-40944).
  The Company currently has $122,000 in cash in escrow with Suntrust Bank, representing a partial payment by Direct Air for Fuel.
  This action is currently pending before the court, as it relates to the collection of the garnishment.
  Russell Adler
  .
  On January 11, 2013, Russell Adler, our former Chief Executive Officer, filed a cross-complaint against the Company, AFI, and other
  associated persons in the Seventeenth Judicial District Court, Broward County, Florida. Mr. Adler's complaint alleges various
  causes of action, including indemnification from the Company in respect of litigation described above, damages for breach of Mr.
  Adler's employment contract, fraud, unpaid legal fees, unjust enrichment, and quantum meruit. We believe Mr. Adler's
  claims are without merit and intend to defend the same.
  As a result of the non-payment
  for Jet Fuel by AFI customers, AFI's suppliers have filed actions that have resulted in judgment and garnishments, in the
  amount of $330,000. Most of these fuel outstanding fuel delivery charges are secured in the bankruptcy action involving Ryan as
  described above, through lien filings by both the issuer and individual fuel providers. In addition, AFI incurred certain loan
  and debt obligations for which the Company is attempting to convert into common stock of the issuer.
  Table of Contents
  37
  From time to time, we
  are also a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our
  rights under contracts with purchasers and suppliers of fuel. While the outcome of these legal proceedings cannot at this time
  be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or
  results of operations.
  ITEM 1A. RISK FACTORS
  As a smaller reporting
  company, we are not required to provide the information required by this item.
  ITEM
  2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  On October 2, 2012, the
  Company issued a convertible debenture in the principal amount of $120,000 to Peak One. The debenture, if not redeemed by the Company,
  is convertible, in whole or in part, into shares of common stock at 60% of the lowest closing bid price of the Company's
  shares for the 20 trading days prior to such conversion. The debenture is redeemable by the Company at 120%-140% of the principal
  amount, depending on the date of redemption, together with interest as accrued.
  On
  January 28, 2013, we issued an aggregate of 49,951 shares of common stock to employees and consultants of the Company. Also on
  January 28, 2013, pursuant to our 2012 Equity Incentive Plan, we issued 150,000 common stock purchase options to each of our directors
  at an exercise price of $1.65 per share.
  The number of shares issued, at the time of such
  issuance, represented approximately 0.3% of the issued and outstanding shares of the Company.
  On February 1, 2013,
  the Company issued a convertible debenture in the principal amount of $100,000 to Peak One.
  On March 5, 2013, the
  Company issued a promissory note in the original principal amount of $7,500 ("Note") to a lender. The Note carries
  an interest rate of 8% per annum. The Note is convertible at October 5, 2013 to common stock of the Company at a 40% discount to
  the average of the 3 lowest trading days in the 10 trading days previous to the conversion.
  On
  May 31, 2013, the Company issued an aggregate of 254,000 shares of its common stock to certain consulting personnel for services
  provided.
  The number of shares issued, at the time of such issuance, represented approximately
  1.6% of the issued and outstanding shares of the Company.
  On
  June 10, 2013, the Company issued 45,454 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 0.2% of the issued and outstanding shares of the Company.
  On July 1, 2013, the
  Company issued a promissory note in the original principal amount of $24,272 ("Note") to a lender. The Note matures
  on April 1, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be convertible upon the election
  of the lender into fully paid and non-assessable shares of Common Stock of the Company at a conversion price equal at market price,
  or the lowest conversion price previously honored by the Company for any other debt conversion by an investor in 2013.
  On
  July 11, 2013, the Company issued 266,134 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 1.7% of the issued and outstanding shares of the Company.
  Table of Contents
  38
  On
  July 16, 2013, the Company issued 448,028 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the
  time of such issuance, represented approximately 2.82% of the issued and outstanding shares of the Company.
  On
  July 29, 2013, the Company issued 806,451 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 4.95% of the issued and outstanding shares of the Company.
  On
  August 1, 2013, the Company issued 786,163 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 4.6% of the issued and outstanding shares of the Company.
  On
  August 2, 2013, the Company issued 864,779 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 4.83% of the issued and outstanding shares of the Company.
  On
  August 6, 2013, the Company issued 75,000 shares of its common stock to a consultant of the Company for services provided.
  The number of shares issued, at the time of such issuance, represented approximately 0.4% of the
  issued and outstanding shares of the Company.
  On
  August 8, 2013, the Company issued 300,000 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 1.5% of the issued and outstanding shares of the Company.
  On
  August 9, 2013, the Company issued 300,000 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 1.56% of the issued and outstanding shares of the Company.
  On
  August 12, 2013, the Company issued 264,779 shares of its common stock to Peak One in connection with the conversion of a debenture
  issued by the Company to Peak One in October 2012.
  The number of shares issued, at the time
  of such issuance, represented approximately 1.36% of the issued and outstanding shares of the Company.
  On July 19, 2013, the
  Company issued a promissory note in the original principal amount of $78,500 ("Note") to a lender. The Note matures
  on April 22, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
  On August 13, 2013, the
  Company issued a promissory note in the original principal amount of $3,000 ("Note") to a lender. The Note matures
  on February 13, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full.
  Table of Contents
  39
  On
  August 22, 2013, the Company issued an aggregate of 531,438 shares of its common stock to certain employees and consulting personnel
  for services provided.
  The number of shares issued, at the time of such issuance, represented
  approximately 2.7% of the issued and outstanding shares of the Company.
  On
  August 22, 2013, the Company issued 2,017,036 shares of unregistered common stock to an accredited investor in exchange for cash.
  The number of shares issued, at the time of such issuance, represented approximately 9.98% of the
  issued and outstanding shares of the Company.
  On August 26, 2013, the
  Company issued a promissory note in the original principal amount of $53,000 ("Note") to a lender. The Note matures
  on May 27, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless
  converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock
  of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the ten trading
  days previous to the conversion date.
  On
  August 29, 2013, the Company entered into a Settlement Agreement with a certain creditor and agreed to convert various loans and
  promissory notes in the collective amount of $933,000 into an aggregate of 5,480,000 shares of common stock of the Company.
  The number of shares issued, at the time of such issuance, represented approximately 23.06% of
  the issued and outstanding shares of the Company.
  On October 1, 2013, the
  Company converted outstanding invoices of the Company in the aggregate amount of $211,254.30 to 2 promissory notes in the original
  principal amounts of $17,000, and $194,254.30 (the "Notes") to two consultants of the Company. The Notes are due upon
  demand, and carry an interest rate of 10% per annum. The Notes at the election of the lender are convertible into fully paid and
  non-assessable shares of Common Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior
  to the day that the Holder requests conversion.
  On October 2, 2013, the
  Company recorded a $35,000 draw down and consideration in respect of a credit line and associated promissory note in the original
  principal amount of $300,000 ("Note"). The Maturity Date is two years from the effective date of each draw down ("Maturity
  Date"). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter a one-time interest charge
  of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted partially or in its entirety
  upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at 60% of the average
  of the two lowest trade prices in the 25 trading days previous to the conversion.
  On October 4, 2013, the
  Company issued a promissory note in the original principal amount of $6,000 ("Note") to a lender. The Note matures
  on November 4, 2013 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading days in the ten trading days previous to
  the conversion.
  On October 5, 2013, the
  Company issued a promissory note in the original principal amount of $28,500 ("Note") to a lender. The Note carries
  an interest rate of 8% per annum.
  On October 13, 2013,
  the Company issued a promissory note in the original principal amount of $30,000 ("Note") to a lender. The Note matures
  on October 13, 2014 and carries an interest rate of 6% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount from the lowest trading price in the five (5) days prior to conversion.
  Table of Contents
  40
  On October 17, 2013,
  the Company issued a promissory note in the original principal amount of $5,000 ("Note") to a lender. The Note is
  due upon demand and carries an interest rate of 16% per annum.
  On October 23, 2013,
  the Company issued a promissory note in the original principal amount of $42,500 ("Note") to a lender. The Note matures
  on July 25, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
  On October 23, 2013,
  the Company issued an aggregate of 2,100,000 shares of its common stock to officers and directors, and certain consulting personnel
  for services provided. The number of shares issued, at the time of such issuance, represented approximately 7.5% of the issued
  and outstanding shares of the Company.
  On
  October 30, 2013, pursuant to the terms of a settlement agreement, the Company issued an additional 500,000 shares of common stock
  of the Company.
  The number of shares issued, at the time of such issuance, represented approximately
  1.67% of the issued and outstanding shares of the Company.
  On
  November 20, 2013, the Company issued an aggregate of 5,075,713 shares of its common stock to certain employees and contract personnel
  for services provided.
  The number of shares issued, at the time of such issuance, represented
  approximately 16.74% of the issued and outstanding shares of the Company.
  On
  November 21, 2013, the Company converted into 1,800,000 shares of common stock a certain promissory note originally issued by the
  Company on December 7, 2004.
  The number of shares issued, at the time of such issuance,
  represented approximately 5.08% of the issued and outstanding shares of the Company.
  On December 9, 2013,
  the Company recorded an additional $20,000 draw down and consideration in respect of a credit line and associated promissory note
  in the original principal amount of $300,000 ("Note"). The Maturity Date is two years from the effective date of each
  draw down ("Maturity Date"). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter
  a one-time interest charge of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted
  partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company
  at 60% of the average of the two lowest trade prices in the 25 trading days previous to the conversion.
  On December 12, 2013,
  the Company issued a promissory note in the original principal amount of $61,500 ("Note") to a lender. The Note matures
  on December 12, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
  On December 12, 2013,
  the Company issued a promissory note in the original principal amount of $145,000 ("Note") to a lender. The Note matures
  on December 12, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
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  41
  On December 13, 2013,
  the Company issued a promissory note in the original principal amount of $810 ("Note") to a lender. The Note carries
  an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or
  in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount to the average of the three lowest daily trading days in the ten trading days previous to the conversion.
  On
  December 16, 2013, the Company converted into 250,000 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 0.6% of the issued and outstanding shares of the Company.
  On
  December 30, 2013, the Company converted into 277,778 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 0.7% of the issued and outstanding shares of the Company.
  On January 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amounts of $45,000 (the
  "Note") to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum.
  The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company
  at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On
  January 13, 2014, the Company issued an aggregate of 2,859,067 shares of its common stock to certain consulting personnel for services
  provided.
  The number of shares issued, at the time of such issuance, represented approximately
  7.26% of the issued and outstanding shares of the Company.
  On
  January 14, 2014, the Company converted into 1,660,026 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 4.4% of the issued and outstanding shares of the Company.
  On January 16, 2014,
  the Company issued a promissory note in the original principal amount of $3,000 ("Note") to a lender. The Note matures
  on July 16, 2014 and carries an interest rate of 8% per annum.
  On January 22,
  2014, the Company issued a Note in the original principal amount of $212,500. The Note carries an interest rate of 8% per
  annum. The Note shall at the maturity date, be due and payable in full unless converted partially or in its entirety upon the
  election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount to the
  average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to the conversion
  date. The net proceeds of the Note were used to redeem and retire two 8% convertible notes that were issued to Asher
  Enterprises, Inc. in the aggregate principal amount of $131,500 (hereafter, collectively, the "Asher Notes") The
  Asher Notes were issued on July 19th, 2013 and August 26th, 2013.
  On January 22, 2014,
  the Company issued a promissory note in the original principal amount of $5,000 ("Note") to a lender. The Note matures
  on July 22, 2014 and carries an interest rate of 8% per annum.
  On
  January 27, 2014, the Company converted into 809,067 shares of common stock, a loan originally received by the Company on July
  1, 2013.
  The number of shares issued, at the time of such issuance, represented approximately
  1.95% of the issued and outstanding shares of the Company.
  On
  January 29, 2014, the Company converted into 1,166,667 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 2.76% of the issued and outstanding shares of the Company.
  Table of Contents
  42
  On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $16,000 ("Note") to a lender. The Note matures
  on January 30, 2015 and carries an interest rate of 8% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount from the lowest trading price in the five (5)
  days prior to the day that the Holder requests conversion.
  On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $78,500 ("Note") to a lender. The Note matures
  on November 3, 2014 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
  On January 30, 2014,
  the Company issued a promissory note in the original principal amount of $11,209 ("Note") to a lender. The Note matures
  on June 2, 2014 and carries an interest rate of 10% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount to the market.
  On
  February 10, 2014, the Company converted into 1,237,624 shares of common stock, a portion of a loan originally received by the
  Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 2.85% of the issued and outstanding shares of the Company.
  On
  February 18, 2014, the Company converted into 1,470,588 shares of common stock, a portion of a loan originally received by the
  Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 3.29% of the issued and outstanding shares of the Company.
  On February 20, 2014,
  the Company recorded an additional $25,000 draw down and consideration in respect of a credit line and associated promissory note
  in the original principal amount of $300,000 ("Note"). The Maturity Date is two years from the effective date of each
  draw down ("Maturity Date"). The Note carries an initial interest rate in the first 90 days of 0 percent, thereafter
  a one-time interest charge of 12% will apply. The Note shall at the Maturity Date, be due and payable in full unless converted
  partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company
  at 60% of the average of the two lowest trade prices in the 25 trading days previous to the conversion.
  On
  March 3, 2014, the Company issued 1,000,000 shares of its common stock to a consultant of the Company for services provided.
  The number of shares issued, at the time of such issuance, represented approximately 2.16% of the
  issued and outstanding shares of the Company.
  On
  March 4, 2014, the Company converted into 2,083,333 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 4.42% of the issued and outstanding shares of the Company.
  On March 5, 2014, the
  Company issued a promissory note in the original principal amount of $10,000 ("Note") to a lender. The Note matures
  on September 5, 2014 and carries an interest rate of 8% per annum. The Note at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40% discount to the average of the three lowest daily trading
  prices as reported on the OTCQB for the ten trading days previous to the conversion date.
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  43
  On
  March 17, 2014, the Company converted into 2,210,884 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 4.49% of the issued and outstanding shares of the Company.
  On
  March 31, 2014, the Company converted into 2,529,762 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 4.92% of the issued and outstanding shares of the Company.
  On April 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 (the "Note")
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On April 1, 2014, the
  Company issued a promissory note in the original principal amounts of $25,000 (the "Note") to a consultant of the Company
  for services rendered. The Note carries an interest rate of 10% per annum, and at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a conversion price of $0.005 per share.
  On April 1, 2014, the
  Company issued a promissory note in the original principal amounts of $93,000 (the "Note") to a consultant of the Company
  for services rendered. The Note carries an interest rate of 10% per annum, and at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 25%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.
  On
  April 1, 2014, the Company converted into 744,048 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 1.37% of the issued and outstanding shares of the Company.
  On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $145,000 ("Note") to a lender. The Note carries
  an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full unless converted partially or
  in its entirety upon the election of the lender into fully paid and non-assessable shares of Common Stock of the Company at a 40%
  discount to the average of the three lowest daily trading prices as reported on the OTCQB for the ten trading days previous to
  the conversion date.
  On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $6,669 ("Note") to a lender. The Note matures
  on May 1, 2014 and carries an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days
  in the ten trading days previous to the conversion.
  On April 1, 2014, the
  Company issued a promissory note in the original principal amount of $83,500 ("Note") to a lender. The Note matures
  on January 2, 2015 and carries an interest rate of 8% per annum. The Note shall at the maturity date, be due and payable in full
  unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of Common
  Stock of the Company at a 40% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  ten trading days previous to the conversion date.
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  44
  On April 3, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $14,000 (the
  "Note") to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum.
  The Note at the election of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company
  at a 40% discount from the lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On
  April 7, 2014, the Company converted into 1,200,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  The number of shares issued, at the
  time of such issuance, represented approximately 2.19% of the issued and outstanding shares of the Company.
  On
  April 8, 2014, the Company converted into 1,070,205 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  The number of shares issued, at the
  time of such issuance, represented approximately 1.91% of the issued and outstanding shares of the Company.
  On
  April 9, 2014, the Company converted into 3,656,379 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented
  approximately 6.42% of the issued and outstanding shares of the Company.
  On April 9, 2014, the
  Company issued a promissory note in the original principal amount of $2,679.16 ("Note") to a lender. The Note matures
  on May 9, 2014 and carries an interest rate of 10% per annum. The Note, at the election of the lender is convertible into fully
  paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading days
  in the ten trading days previous to the conversion.
  On
  April 28, 2014, the Company converted into 2,400,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.
  The number of shares issued, at the time of such issuance, represented
  approximately 3.96% of the issued and outstanding shares of the Company.
  On
  May 2, 2014, the Company converted into 3,125,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 4.96% of the issued and outstanding shares of the Company.
  On
  May 2, 2014, the Company converted into 2,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.78% of the issued and outstanding shares of the Company.
  On
  May 6, 2014, the Company converted into 6,854,167 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 9.98% of the issued and outstanding shares of the Company.
  On
  May 6, 2014, the Company converted into 3,125,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 4.14% of the issued and outstanding shares of the Company.
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  45
  On May 7, 2014, the
  Company converted into 5,630,630 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 7.16% of the issued and outstanding shares
  of the Company.
  On
  May 7, 2014, the Company converted into 3,400,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.
  The number of shares issued, at the time of such issuance, represented
  approximately 4.03% of the issued and outstanding shares of the Company.
  On
  May 7, 2014, the Company converted into 3,400,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.87% of the issued and outstanding shares of the Company.
  On
  May 7, 2014, the Company converted into 995,833 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 1.09% of the issued and outstanding shares of the Company.
  On May 8, 2014, the Company
  converted into 4,504,504 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012. The
  number of shares issued, at the time of such issuance, represented approximately 4.89% of the issued and outstanding shares of
  the Company.
  On
  May 9, 2014, the Company converted into 5,000,000 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.
  The number of shares issued, at the time of such issuance, represented
  approximately 5.17% of the issued and outstanding shares of the Company.
  On
  May 9, 2014, the Company converted into 3,041,667 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 2.9% of the issued and outstanding shares of the Company.
  On
  May 9, 2014, the Company converted into 4,750,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 4.54% of the issued and outstanding shares of the Company.
  On
  May 9, 2014, the Company converted into 3,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company in February, 2000.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.2% of the issued and outstanding shares of the Company.
  On
  May 12, 2014, the Company issued 500,000 shares of its common stock to a director of the Company for services provided.
  The number of shares issued, at the time of such issuance, represented approximately 0.4% of the
  issued and outstanding shares of the Company.
  On
  May 13, 2014, the Company converted into 3,500,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.08% of the issued and outstanding shares of the Company.
  Table of Contents
  46
  On May 13, 2014, the
  Company issued 500,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued, at
  the time of such issuance, represented approximately 0.42% of the issued and outstanding shares of the Company.
  On May 15, 2014, the
  Company converted into 9,615,384 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 8.19% of the issued and outstanding shares
  of the Company.
  On May 16, 2014, the
  Company issued a promissory note in the original principal amount of $1,975 ("Note") to a lender. The Note matures
  on November 16, 2014 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.
  On May 19, 2014, the
  Company issued 500,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued, at
  the time of such issuance, represented approximately 0.3% of the issued and outstanding shares of the Company.
  On May 21, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $4,000 (the "Note")
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On
  May 22, 2014, the Company converted into 4,166,667 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.26% of the issued and outstanding shares of the Company.
  On
  May 23, 2014, the Company converted into 3,505,263 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 23, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 2.66% of the issued and outstanding shares of the Company.
  On
  May 13, 2014, the Company converted into 3,750,000 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 2.77% of the issued and outstanding shares of the Company.
  On May 15, 2014, the
  Company converted into 9,567,901 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 6.89% of the issued and outstanding shares
  of the Company.
  On
  May 29, 2014, the Company converted into 3,571,428 shares of common stock, a portion of a loan originally received by the Company
  on October 5, 2013.
  The number of shares issued, at the time of such issuance, represented
  approximately 2.4% of the issued and outstanding shares of the Company.
  On
  May 13, 2014, the Company converted into 5,044,270 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 2, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 3.31% of the issued and outstanding shares of the Company.
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  47
  On
  May 30, 2014, the Company converted into 4,461,282 shares of common stock, a portion of a loan originally received by the Company
  on October 14, 2013.
  The number of shares issued, at the time of such issuance, represented
  approximately 2.84% of the issued and outstanding shares of the Company.
  On
  May 30, 2014, the Company converted into 1,050,410 shares of common stock, a loan originally received by the Company on August
  13, 2013.
  The number of shares issued, at the time of such issuance, represented approximately
  0.65% of the issued and outstanding shares of the Company.
  On
  June 3, 2014, the Company converted into 6,987,877 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on October 1, 2013.
  The number of shares issued, at the time of such
  issuance, represented approximately 4.29% of the issued and outstanding shares of the Company.
  On June 3, 2014, the
  Company converted into 16,025,641 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 9.45% of the issued and outstanding shares
  of the Company.
  On May 19, 2014, the
  Company issued 2,000,000 shares of restricted common stock to a consultant for services rendered. The number of shares issued,
  at the time of such issuance, represented approximately 1.07% of the issued and outstanding shares of the Company.
  On June 11, 2014, the
  Company converted into 17,948,718 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 9.56% of the issued and outstanding shares
  of the Company.
  On
  June 11, 2014, the Company converted into 8,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  The number of shares issued, at the
  time of such issuance, represented approximately 3.89% of the issued and outstanding shares of the Company.
  On
  June 12, 2014, the Company converted into 8,240,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  The number of shares issued, at the
  time of such issuance, represented approximately 3.85% of the issued and outstanding shares of the Company.
  On June 23, 2014, the
  Company converted into 18,055,556 shares of common stock, a portion of a loan originally received by the Company on March 21, 2012.
  The number of shares issued, at the time of such issuance, represented approximately 8.13% of the issued and outstanding shares
  of the Company.
  On
  June 26, 2014, the Company converted into 4,545,455 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 4, 2013.
  The number of shares issued, at the
  time of such issuance, represented approximately 1.89% of the issued and outstanding shares of the Company.
  On
  June 27, 2014, the Company converted into 6,437,879 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.
  The number of shares issued, at the
  time of such issuance, represented approximately 2.63% of the issued and outstanding shares of the Company.
  Table of Contents
  48
  On June 30, 2014, the
  Company issued a promissory note in the original principal amount of $1,928.50 ("Note") to a lender. The Note matures
  on December 30, 2014 and carries an interest rate of 8% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.
  On July 1, 2014, the
  Company converted outstanding invoices of the Company into a promissory note in the original principal amount of $45,000 (the "Note")
  to a consultant of the Company. The Note is due upon demand, and carries an interest rate of 10% per annum. The Note at the election
  of the lender is convertible into fully paid and non-assessable shares of Common Stock of the Company at a 40% discount from the
  lowest trading price in the five (5) days prior to the day that the Holder requests conversion.
  On July 1, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 ("Note") to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.
  On
  July 14, 2014, the Company converted into 24,057,318 shares of common stock, a portion of a loan originally received by the Company
  on March 21, 2012.
  T
  he number of shares issued, at the time of such issuance, represented
  approximately 9.59% of the issued and outstanding shares of the Company.
  On July 14, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 ("Note") to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.
  On
  July 14, 2014, the Company converted into 15,517,241 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 5.64% of the issued and outstanding shares of the Company.
  On
  July 15, 2014, the Company converted into 14,202,945 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.66% of the issued and outstanding shares of the Company.
  On
  July 15, 2014, the Company converted into 14,291,666 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.
  T
  he number of shares issued,
  at the time of such issuance, represented approximately 4.69% of the issued and outstanding shares of the Company.
  On
  July 17, 2014, the Company converted into 25,757,576 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 8.07% of the issued and outstanding shares of the Company.
  On
  July 18, 2014, the Company converted into 8,400,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 2.43% of the issued and outstanding shares of the Company.
  On
  July 22, 2014, the Company converted into 16,428,571 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.65% of the issued and outstanding shares of the Company.
  Table of Contents
  49
  On
  July 23, 2014, the Company converted into 13,047,619 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company in February, 2000.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 3.53% of the issued and outstanding shares of the Company.
  On
  July 24, 2014, the Company converted into 21,323,529 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 5.57% of the issued and outstanding shares of the Company.
  On
  July 24, 2014, the Company converted into 6,944,444 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 21, 2012.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 1.71% of the issued and outstanding shares of the Company.
  On
  July 24, 2014, the Company converted into 10,401,348 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 2.53% of the issued and outstanding shares of the Company.
  On
  July 30, 2014, the Company converted into 37,037,037 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 8.79% of the issued and outstanding shares of the Company.
  On
  August 6, 2014, the Company converted into 21,851,852 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.76% of the issued and outstanding shares of the Company.
  On August 6, 2014, the
  Company issued a promissory note in the original principal amount of $5,000 ("Note") to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.
  On
  August 6, 2014, the Company converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 9.52% of the issued and outstanding shares of the Company.
  On August 7, 2014, the
  Company issued a promissory note in the original principal amount of $1,569 ("Note") to a lender. The Note is due upon
  demand, and carries an interest rate of 12% per annum.
  On
  August 11, 2014, the Company converted into 26,812,500 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on December 12, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 5.09% of the issued and outstanding shares of the Company.
  On
  August 11, 2014, the Company converted into 45,740,741 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 8.27% of the issued and outstanding shares of the Company.
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  50
  On
  August 12, 2014, the Company converted into 15,131,579 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 5, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 2.52% of the issued and outstanding shares of the Company.
  On
  August 13, 2014, the Company converted into 29,761,905 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.
  T
  he number of shares issued,
  at the time of such issuance, represented approximately 4.85% of the issued and outstanding shares of the Company.
  On
  August 19, 2014, the Company converted into 16,666,667 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 2.59% of the issued and outstanding shares of the Company.
  On
  August 20, 2014, the Company converted into 36,826,054 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 5.58% of the issued and outstanding shares of the Company.
  On
  August 22, 2014, the Company converted into 24,888,889 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 3.57% of the issued and outstanding shares of the Company.
  On
  August 22, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 8.66% of the issued and outstanding shares of the Company.
  On
  August 22, 2014, the Company converted into 52,729,500 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 30, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 6.72% of the issued and outstanding shares of the Company.
  On
  August 25, 2014, the Company converted into 40,476,190 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.83% of the issued and outstanding shares of the Company.
  On August 29, 2014, the
  Company issued a promissory note in the original principal amount of $7,000 ("Note") to a lender. The Note matures
  on November 1, 2014 and carries an interest rate of 12% per annum. The Note, at the election of the lender is convertible into
  fully paid and non-assessable shares of Common Stock of the Company at a 40%discount to the average of the three lowest trading
  days in the ten trading days previous to the conversion.
  On
  September 2, 2014, the Company converted into 30,833,333 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 5, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 3.51% of the issued and outstanding shares of the Company.
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  51
  On
  September 10, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.
  T
  he number of shares issued,
  at the time of such issuance, represented approximately 6.88% of the issued and outstanding shares of the Company.
  On
  September 10, 2014, the Company converted into 76,923,077 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.
  T
  he number of shares issued,
  at the time of such issuance, represented approximately 7.92% of the issued and outstanding shares of the Company.
  On
  September 17, 2014, the Company converted into 48,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 4.58% of the issued and outstanding shares of the Company.
  On
  September 18, 2014, the Company converted into 53,720,027 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 4.9% of the issued and outstanding shares of the Company.
  On
  September 18, 2014, the Company converted into 50,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 4.35% of the issued and outstanding shares of the Company.
  On September 4, 2014,
  the Company issued a promissory note in the original principal amount of $6,000 ("Note") to a lender. The Note is due
  upon demand, and carries an interest rate of 12% per annum.
  On
  September 26, 2014, the Company converted into 95,000,000 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on January 21, 2014.
  T
  he number of shares issued,
  at the time of such issuance, represented approximately 7.92% of the issued and outstanding shares of the Company.
  On
  September 30, 2014, the Company converted into 63,583,333 shares of common stock, a portion of a certain convertible promissory
  note originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 4.91% of the issued and outstanding shares of the Company.
  On September 30,
  2014, the Company converted into 53,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at
  the time of such issuance, represented approximately 3.63% of the issued and outstanding shares of the Company.
  On
  October 3, 2014, the Company converted into 100,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 7.36% of the issued and outstanding shares of the Company.
  On
  October 7, 2014, the Company converted into 74,166,666 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 1, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.9% of the issued and outstanding shares of the Company.
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  52
  On
  October 8, 2014, the Company converted into 51,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on October 2, 2013.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 3.21% of the issued and outstanding shares of the Company.
  On
  October 3, 2014, the Company converted into 67,000,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.09% of the issued and outstanding shares of the Company.
  On
  October 16, 2014, the Company converted into 32,083,333 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 31, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 1.88% of the issued and outstanding shares of the Company.
  On
  October 16, 2014, the Company converted into 52,833,333 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on March 31, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 3.04% of the issued and outstanding shares of the Company.
  On
  October 17, 2014, the Company converted into 62,500,000 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 3.49% of the issued and outstanding shares of the Company.
  On
  October 24, 2014, the Company converted into 83,333,334 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.
  T
  he number of shares issued, at the
  time of such issuance, represented approximately 4.3% of the issued and outstanding shares of the Company.
  No solicitation was made
  and no underwriting discounts were given or paid in connection with these transactions. The Company believes that the issuance
  of shares and options as described above was exempt from registration with the Securities and Exchange Commission pursuant to Section
  4(2) of the Securities Act of 1933.
  ITEM 3. DEFAULTS UPON SENIOR
  SECURITIES
  Effective February 1,
  2000, the Company sold and issued a promissory note secured by certain tangible and intangible assets of the Company ("Note")
  in exchange for $450,000 in cash proceeds. As of May 1, 2000, the Company is in default with respect to the Note. The Note and
  its accompanying Security Agreement have been filed as an exhibit to the Company's 1999 annual report on form 10-KSB filed
  with the Securities and Exchange Commission on March 30, 2000.
  ITEM
  4. MINE SAFETY DISCLOSURES
  Not applicable.
  ITEM
  5. OTHER INFORMATION
  Not applicable.
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  53
  ITEM
  6. EXHIBITS
  The following
  documents are filed as exhibits to this Form 10-Q:
  INDEX TO EXHIBITS
  Number
  Exhibits
  3.1
  Amended and Restated Certificate of Incorporation of Fuelstream, Inc
  3.2
  Amended and Restated Bylaws of Fuelstream, Inc.(1)
  10.1
  Form of Indemnification Agreement (2)
  10.2
  2012 Equity Incentive Plan (2)
  31
  Certification by Chief Executive Officer, Kevin Blanco, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  .
  32
  Certification by Chief Executive Officer,Kevin Blanco, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  .
  (1) Filed as an Exhibit to the Company's
  Current Report on Form 8-K, filed on June 17, 2011.
  (2) Filed as an Exhibit to the Company's
  Current Report on Form 8-K, filed on September 18, 2012.
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  54
  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.
  FUELSTREAM, INC.
  Date: November 19, 2014
  BY:
  /s/ John Thomas
  __________________
  John Thomas
  Chief Executive Officer
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  55