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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,
  2015</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">(Exact Name of Registrant as Specified 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-family: Times New Roman, Times, Serif; font-size: 10.5pt; 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-family: Times New Roman, Times, Serif; font-size: 10.5pt; 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-family: Times New Roman, Times, Serif; font-size: 10.5pt; letter-spacing: -0.2pt">11650 South State Street, Suite 240</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-family: Times New Roman, Times, Serif; font-size: 10.5pt; letter-spacing: -0.2pt">Draper, Utah</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-family: Times New Roman, Times, Serif; font-size: 10.5pt; letter-spacing: -0.2pt">84020</font></td></tr>
  <tr style="vertical-align: top">
      <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10.5pt; 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-family: Times New Roman, Times, Serif; font-size: 10.5pt; 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-family: Times New Roman, Times, Serif; font-size: 10.5pt"><u>(801) 816-2510</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">(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">510 Shotgun Road, Suite 110, Fort Lauderdale,
          FL 33326</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-decoration: underline; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10.5pt">(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 -->
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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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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 13, 2015,
  the Company had outstanding 4,420,504 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>
  
  
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      <!-- 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, 2015. </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, 2015 and December 31, 2014 (unaudited)</A>
          <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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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, 2015 and 2014 (unaudited)</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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, 2015 and 2014 (unaudited)</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">7</font></td></tr>
  </table>
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
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  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="text-align: center"><A NAME="a_001"></A>Condensed Consolidated Balance Sheets</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="text-align: center">(Unaudited)</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="9" 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">2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</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: 70%; text-align: left; padding-left: 10pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">94,176</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">811</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-left: 10pt">Accounts receivable, net of allowance</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,051</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>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 10pt">Fuel Deposits</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">344,926</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: 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 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">538,153</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">28,811</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; 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">538,153</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">28,811</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: rgb(204,238,255)">
      <TD COLSPAN="9" STYLE="text-decoration: underline; text-align: center">LIABILITIES AND STOCKHOLDERS' DEFICIT</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">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: 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-left: 10pt">Accounts payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">995,748</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">959,469</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">Due to related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,973</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">Accrued expenses</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,717,924</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,215,086</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">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: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-left: 10pt">&nbsp;&nbsp;discount of $23,380 and $6,358, respectively)</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">665,257</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">634,141</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">Convertible notes payable - related parties</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325,722</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">280,722</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</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,044,092</TD><TD STYLE="text-align: left">&nbsp;</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">2,208,106</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,138,106</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-left: 10pt">Line of Credit</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">501,000</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: 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">718,291</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">372,939</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">8,299,152</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">6,688,046</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; 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">8,299,152</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">6,688,046</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">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: 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="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: rgb(204,238,255)">
      <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: White">
      <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: rgb(204,238,255)">
      <TD STYLE="padding-left: 10pt">&nbsp;shares authorized, 2,047,508 and 969,086</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;shares issued and outstanding, respectively</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">205</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97</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">Additional paid-in capital</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,685,476</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,559,736</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">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">(60,446,680</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">(59,219,068</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; 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">(7,760,999</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">(6,659,235</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: 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">538,153</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">28,811</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: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17" STYLE="text-align: center"><A NAME="a_002"></A>Condensed Consolidated Statements of Operations</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="17" 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">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; 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">2015</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">2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</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="width: 48%; text-align: left">NET SALES</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">115,517</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">382,073</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">115,517</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">639,661</TD><TD STYLE="width: 1%; 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">105,074</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">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">105,074</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></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">10,443</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">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">10,443</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></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">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">114,429</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">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">402,673</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></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">114,429</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">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">402,673</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></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">(103,986</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">(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">(392,230</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></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">318</TD><TD STYLE="text-align: left">&nbsp;</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">318</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Gain (Loss) on change in fair value of derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(602,997</TD><TD STYLE="text-align: left">)</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">(290,392</TD><TD STYLE="text-align: left">)</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></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 $10,430, $251,768, $65,478 and $1,176,353, 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">(177,927</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">(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">(545,308</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></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 Income (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">(780,606</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">(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">(835,382</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></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">(884,592</TD><TD STYLE="text-align: left">)</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">(1,227,612</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></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">(884,592</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,118,811</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,227,612</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,939,373</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD>&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">BASIC AND DILUTED:</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 2.5pt; padding-left: 10pt">Net loss per common share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.56</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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(4.22</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.97</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">(19.48</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">1,593,161</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">264,948</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">1,268,977</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">150,904</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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  <P STYLE="font: 9pt Sans-Serif; margin: 0; text-align: justify; color: Red"><B></B></P>
  
  
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  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"><B></B></P>
  
  <TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="font-weight: bold; text-align: center">FUELSTREAM, INC.</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" STYLE="text-align: center"><A NAME="a_003"></A>Condensed Consolidated Statements of Cash Flows</TD></TR>
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="9" 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">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></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">2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid">2014</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="width: 74%; text-align: left">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(1,227,612</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(2,939,373</TD><TD STYLE="width: 1%; 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">&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">)</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 and finance expenses</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">175,450</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">68,434</TD><TD STYLE="text-align: left">&nbsp;</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></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">&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">270,969</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">&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">336,171</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">290,392</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">)</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">65,478</TD><TD STYLE="text-align: left">&nbsp;</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></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">Fuel deposits</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(344,926</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">Accounts receivable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(71,051</TD><TD STYLE="text-align: left">)</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <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">564,629</TD><TD STYLE="text-align: left">&nbsp;</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <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">179,039</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">1,064</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 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">(475,617</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">(256,399</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">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: 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">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: 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">Proceeds from line of credit</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">501,000</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: left; padding-left: 10pt">Proceeds from notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,482</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-left: 10pt">Proceeds from convertible notes payable</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</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></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 10pt">Proceeds from notes payable - related parties</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><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></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">&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">(131,500</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">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">568,982</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">316,448</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 IN CASH AND CASH EQUIVALENTS</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">93,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">60,049</TD><TD STYLE="text-align: left">&nbsp;</TD></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">811</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: 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">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">94,176</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,049</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">$</TD><TD STYLE="text-align: right">164</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">601</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">$</TD><TD STYLE="text-align: right">37,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">803,378</TD><TD STYLE="text-align: left">&nbsp;</TD></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">$</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">435,156</TD><TD STYLE="text-align: left">&nbsp;</TD></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">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">142,745</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 interest converted to notes payable</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">131,659</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">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">703,989</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</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,362</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,306,009</TD><TD STYLE="text-align: left">&nbsp;</TD></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 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">210,784</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 due to related party to note payable - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">64,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</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">Reclassification from accounts payable to convertible note payable - related party</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</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: 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">$</TD><TD STYLE="text-align: right">&mdash;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">158,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-left: 20pt">Reduction of derivative liability due to conversions credited to additional paid in capital</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8,370</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">$</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 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: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"></P>
  
  
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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"><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, 2015</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 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, 2014. Operating results for the nine months ended September 30, 2015
  are not necessarily indicative of the results to be expected for the year ending December 31, 2015. &#9;</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">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. The accumulated deficit as of September
  30, 2015 was $60,446,680. The total stockholders&rsquo; deficit at September 30, 2015 was $7,760,999 and, as of that date, the
  Company had a working capital deficit (current liabilities minus current assets) of $7,760,999, resulting from 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 through the sale of aircraft fuel
  and related services. 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; 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/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">NOTE 3 - FUEL DEPOSITS</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the nine months ended September 30,
  2015, the Company deposited funds with certain fuel vendors in order to establish a &ldquo;prepay&rdquo; account that is used for
  the purchase of fuel. The balance in these fuel deposits at September 30, 2015 was $344,926.</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 - NOTES PAYABLE</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 24, 2015 the Company issued
  a promissory note for $9,482. The note is due on demand and bears interest at the rate of 10% per annum.</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 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 0 0 0.75in; text-align: justify; text-indent: -0.75in">&nbsp;</P>
  
  
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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, 2015</P>
  
  
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">NOTE 5 - CONVERTIBLE DEBENTURE/NOTES PAYABLE</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"><U>Convertible debentures January 6, 2015</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 6, 2015, the Company issued a
  $6,000 Convertible Promissory Note which bears interest at a rate of 8%, due on October 10, 2015 (in default) and is convertible
  into the Company&rsquo;s common stock at the holder&rsquo;s option, at the conversion rate of 50% of the average of the lowest
  three day trading price for twenty 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 issued on January 6, 2015. 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 $11,520 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">443.15</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">0.18</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 $11,520 was allocated as a debt discount up to the proceeds of the note
  ($6,000) with the remainder ($5,520) charged to current period operations as interest expense for the three months ended March
  31, 2015. At September 30, 2015, the derivative liability was adjusted to fair value which resulted in an increase of the derivative
  liability in the amount of $5,372. During the nine months ended September 30, 2015, the Company recorded amortization of debt
  discount in the amount of 5,805. The outstanding balance on the note as of September 30, 2015 is $6,000.</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 May 20, 2015</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">On May 20, 2015 the Company issued a $15,000
  Convertible Promissory Note which bears interest at a rate of 10%, due on demand and is convertible into the Company&rsquo;s common
  stock at the maker&rsquo;s option, at the conversion rate of 60% of the lowest trading price in the five 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. 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 debt
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable as the lender has agreed to not force the Company to issue the shares if there is an insufficient number of authorized
  and unissued shares available. 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 $15,000 and was recorded as debt discount. The outstanding balance as of September 30,
  2015 is $15,000.</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"></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, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>Convertible debentures June 16, 2015</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 June 16, 2015, the Company issued a $31,500
  Convertible Promissory Note which bears interest at a rate of 8%, due on June 16, 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 average of the lowest three 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 issued on June 16, 2015. 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 $51,809 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">563.68</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">0.28</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 $51,809 was allocated as a debt discount up to the proceeds of the note ($31,500) with the remainder
  ($20,309) charged to current period operations as interest expense for the six months ended June 30, 2015. The outstanding
  balance as of September 30, 2015 is $31,500.</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, 2015, the Company adjusted
  the recorded fair value of the derivative liability to market on the notes resulting in noncash, non-operating loss of $290,392
  for the nine months ended September 30, 2015.</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,
  2015 and 2014 the Company amortized $65,478 and $1,176,353, respectively and $10,430 and $251,768, for the three months ended September
  30, 2015 and 2014, 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accrued interest on convertible notes payable
  as of September 30, 2015 was $226,761. Interest expense of $51,040 has been charged to expenses for the nine months ended September
  30, 2015.</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 - CONVERTIBLE NOTES PAYABLE - RELATED
  PARTIES</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0"><U>Convertible debenture January 1, 2015</U></P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On January 1, 2015 the Company issued a $45,000
  Convertible Promissory Note against 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/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, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company analyzed the convertible debt
  for derivative accounting consideration under ASC 815 &ldquo;Derivatives and Hedging&rdquo; and determined that derivative accounting
  is not applicable as the lender has agreed to not force the Company to issue the shares if there is an insufficient number of authorized
  and unissued shares available. The Company further analyzed the convertible debt 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 $30,000 and was recorded as debt discount. During the three and six months ended June 30,
  2015, debt discount of $0 and $30,000, respectively, was amortized. The outstanding balance as of September 30, 2015 is $45,000.</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">Accrued interest on convertible notes payable-related
  parties as of September 30, 2015 was $63,552. Interest expense of $24,640 has been charged to expenses for the nine months ended
  September 30, 2015.</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 7 - 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>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On April 1, 2015 the Company issued a promissory
  note to a related party for $45,000 in order to convert accounts payable. The note is due on demand and bears interest at the 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 June 1, 2015 the Company issued a promissory
  note to a related party for $19,000 in order to convert accounts payable. The note is due on demand and bears interest at the 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 June 23, 2015 the Company issued a promissory
  note to a related party for $6,000. The note is due on demand and bears interest at the rate of 24% 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">Accrued interest on notes payable &ndash;
  related parties as of September 30, 2015 was $578,106. During the nine months ended September 30, 2015, total interest expense
  to related parties was $197,738.</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">NOTE 8 - LINE OF CREDIT</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 20, 2015, the Company
  announced that it had entered into that certain Revolving Senior Secured Participating Line of Credit Agreement and exhibits
  thereto (collectively, the &ldquo;Credit Facility&rdquo;) with NuVenture Fund I, LLC (&ldquo;NuVenture&rdquo;), in respect of
  a revolving credit line in the principal amount of $2,000,000 (the &ldquo;Revolving Note&rdquo;). The Revolving Note matures
  (a) two (2) years from the date of the Credit Facility unless extended by the NuVenture, in its sole and absolute discretion,
  for two additional periods of up to one (1) year each, or (b) at the sole discretion of NuVenture, upon the occurrence of an
  Event of Default, as defined in the Revolving Note, that remains uncured for fifteen (15) days. The Revolving Note bears
  interest at the rate of 24% per annum and, in the alternative, entitles NuVenture to receive a fee equal to 3.5% of any
  advance made under the Revolving Note. The Credit Facility contains representations, warranties, conditions, restrictions,
  and covenants of the Company that are customary in such transactions with similar companies. The balance due on the Revolving
  Note as of September 30, 2015 was $501,000. Accrued interest on the Revolving Note as of September 30, 2015 was $33,288.</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"></P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At the closing of the transactions contemplated
  by the Credit Facility, the Company shall issue to NuVenture a warrant to acquire a number of shares of the Company&rsquo;s common
  stock equal to 4% of the Company&rsquo;s common shares outstanding as of the Effective Date. The exercise price of the warrant
  shall be the closing trading price of the Company&rsquo;s shares as of the Effective Date. Should the credit limit be increased
  above $2,000,000, NuVenture shall be entitled to an additional warrant for each such increase, with such additional warrants containing
  similar terms and conditions as the original warrant. The number of shares of the Company&rsquo;s common stock subject to any such
  additional warrants shall be a product of (x) the amount of the increase in the Credit Line and (y) the number of shares of common
  stock of the Company to which the original warrant is subject.</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
  
  <P STYLE="margin: 0">Effective September 30, 2015, NuVenture released, waived and discharged the Company from any claim for the
  warrants since no warrants have been issued.</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>
  
  
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  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0">&nbsp;</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: 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, 2015</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 9 - 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, 2015 and December 31, 2014. 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, 2015 and December 31, 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 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, 2015 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, 2015:</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">$</TD><TD STYLE="width: 10%; text-align: right">718,291</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 3%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">718,291</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">$</TD><TD STYLE="font-weight: bold; text-align: right">718,291</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
      <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">718,291</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/115% Times New Roman, Times, Serif; margin: 0">The following table provides a summary of changes in fair
  value of the Company&rsquo;s Level 3 financial liabilities as of September 30, 2015:</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: 11pt Times New Roman, Times, Serif">
  <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">Debt&nbsp;Derivative <BR>Liability</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="width: 79%">Balance, December 31, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
      <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">372,939</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left">Initial fair value of debt derivatives at note issuances</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,330</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left">Extinguished derivative liability</TD><TD>&nbsp;</TD>
      <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,370</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Mark-to-market at September 30, 2015 - Embedded debt derivatives</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">290,392</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="padding-bottom: 1pt">Balance, September 30, 2015</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
      <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">718,291</TD><TD STYLE="padding-bottom: 1pt; 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></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
      <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss for the period included in earnings relating to the liabilities held at September 30, 2015</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">290,392</TD><TD STYLE="padding-bottom: 1pt; 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">&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/115% Times New Roman, Times, Serif; margin: 0 0 10pt">&nbsp;</P>
  
  
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      <!-- 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, 2015</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>
  
  
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/0 Times New Roman, Times, Serif; margin: 0"></P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt">NOTE 10 - COMMON AND PREFERRED STOCK TRANSACTIONS</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">&nbsp;</P>
  
  <P STYLE="font: 10.5pt 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, 2015 and December 31, 2014 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 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 authorized to issue 2,500,000,000
  shares of $0.0001 par value of common stock. As of September 30, 2015 and December 31, 2014 the Company had 2,047,508 and 969,086
  shares of common stock as issued and outstanding.</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 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. The fair
  value of the vested portion of $68,434 was charged to stock based compensation and additional paid in capital during the nine months
  ended September 30, 2015. The options were forfeited effective July 1, 2015.</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 December 8, 2014, our board of
  directors and the holder of a majority in interest of our voting capital stock approved a 1-for-2,000 reverse split
  of our common shares (&ldquo;Reverse Split&rdquo;). The Reverse Split became effective on April 6, 2015. As a result of
  the Reverse Split, each shareholder of record received one (1) share of common stock for each two thousand (2,000) shares
  of common stock they held prior to the Reverse Split, provided however, that fractions of a share were rounded up to the
  nearest whole share and any registered shareholder who would have otherwise held less than 200 shares following the Reverse
  Split was rounded up to 200 shares. Consequently, none of our registered shareholders as of the record date held less than
  200 shares following the Reverse Split. This rounding up to 200 shares resulted in an additional 199,805 shares issued. These
  financial statements have been retroactively restated for this change in capital structure.</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 22, 2015, the Company converted into
  111,608 shares of common stock, $1,000 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $1,124.</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, 2015, the Company converted into
  124,070 shares of common stock, $1,000 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $3,624.</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, 2015, the Company converted into
  134,921 shares of common stock, $850 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $36.</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, 2015, the Company converted
  into 153,595 shares of common stock, $470 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $384.</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"></P>
  
  
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  <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: 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, 2015</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">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On September 17, 2015, the Company converted
  into 169,048 shares of common stock, $497 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $2,553.</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 29, 2015, the Company converted
  into 185,375 shares of common stock, $545 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $649.</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">Due to rounding of adjustment for reverse
  stock split the Company issued 199,805 shares of common stock during the nine months ended September 30, 2015.</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 11 - 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">&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: 80%; font: 10.5pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
      <TD COLSPAN="3" STYLE="text-align: left">&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">&nbsp;</TD><TD STYLE="width: 40%; text-align: left"><font style="font-size: 10.5pt">Outstanding as of January 1, 2015</font></TD><TD STYLE="width: 1%; text-align: left">&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: 1%">&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">&nbsp;</TD><TD STYLE="text-align: left"><font style="font-size: 10.5pt">Granted</font></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">&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">&nbsp;</TD><TD STYLE="text-align: left"><font style="font-size: 10.5pt">Exercised</font></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">&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">&nbsp;</TD><TD STYLE="text-align: left"><font style="font-size: 10.5pt">Forfeited</font></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">(370,000</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">(1.34</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: left">&nbsp;</TD><TD STYLE="text-align: left"><font style="font-size: 10.5pt">Outstanding at September 30, 2015</font></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">$</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>
  </TABLE>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">Effective July 1, 2015, all outstanding options were forfeited.</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0; text-align: justify">NOTE 12 - 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/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Subsequent to September 30, 2015,
  the Company converted into 2,372,996 shares of common stock, $5,192 a portion of a certain convertible promissory note originally
  issued by the Company on January 21, 2014.</P>
  
  <P STYLE="font: 10.5pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">On October 7, 2015, Chene Gardner
  was appointed as the Company&rsquo;s Chief Financial Officer.</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">The Company&rsquo;s principal
  sources of revenues are derived the sale of fuel and related 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">The Company&rsquo;s ability
  to generate revenues during the remainder of 2015 and beyond depends upon a variety of factors, including the Company&rsquo;s ability
  to obtain financing and its ability to secure and keep customer accounts. Such efforts require significant systems development,
  administration, marketing and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding,
  our 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; 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">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, 2015 and 2014.</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 $115,517 during the three months ended September 30, 2015 as compared to $382,073 for
  the three months ended September 30, 2014. The Company generated net revenues of $115,517 during the nine months ended
  September 30, 2015 as compared to $639,661 for the nine months ended September 30, 2014. The decrease is mainly due to a
  change in the financing of fuel purchases. During 2014, the Company obtained financing through the issuance of convertible
  promissory notes. In 2015, the Company chose not to incur this type of debt. A line of credit secured at the</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/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify">beginning of the 3<SUP>rd</SUP> quarter
  of 2015 has allowed the Company to purchase fuel and produce revenues. 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>Cost of sales for the three months ended September 30, 2015 was $105,074 as compared to $313,476 for the three
  months ended September 30, 2014. Cost of sales for the nine months ended September 30, 2015 was $105,074 as compared to
  $534,371 for the nine months ended September 30, 2014. 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.</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, 2015 were $114,429 compared to $448,022 during the three months ended September 30, 2014. Selling, general and
  administrative expenses for the nine months ended September 30, 2015 were $402,673 compared to $1,337,944 during the nine
  months ended September 30, 2014. 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 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 $780,606 for the three months ended September 30, 2015 compared
  to net other expenses of $739,386 during the three months ended September 30, 2014. The Company had net other expenses of
  $835,382 for the nine months ended September 30, 2015 compared to net other expenses of $1,706,719 during the nine months
  ended September 30, 2014. Other expenses incurred were comprised primarily of interest expenses related to notes payable
  including amortization of debt discount and offset with gain or loss on the change in the fair value of derivative liability
  and a gain on the conversion of debt. During the nine months ended September 30, 2015 and 2014, interest expense was $545,308
  and $2,026,094, respectively. Included in interest expense was the amortization of debt discount of $65,478 and $1,176,353
  for the nine months ended September 30, 2015 and 2014, respectively. The gain (loss) on change in fair value of derivative
  liability was $(290,392) and $209,918 for the nine months ended September 30, 2015 and 2014, 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 $884,592 and $1,227,612, respectively, for the three and nine months ended September
  30, 2015 compared to $1,227,612 and $2,939,373, respectively, during the three and nine months ended September 30, 2014. The
  decrease in net loss was mainly due to the decrease in overall expenses incurred by the Company.</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"><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, 2015,
  our primary source of liquidity consisted of $94,176 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. The Company used $475,617 and $256,399, respectively, in
  operating activities during the nine months ended September 30, 2015 and 2014. Net cash provided by financing activities was $568,982
  and $316,448, respectively, during the nine months ended September 30, 2015 and 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; text-indent: 0.5in">We have sustained
  significant net losses which have resulted in a total stockholders&rsquo; deficit at September 30, 2015 of $7,760,999 and are
  currently experiencing a substantial shortfall in operating capital which raise doubt about our ability to continue as a
  going concern. We anticipate a net loss for the year ended December 31, 2015 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. The
  Company&rsquo;s</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">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 selling aircraft fuel and related services. 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; 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 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; text-indent: 0.5in">&nbsp;</P>
  
  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify; text-indent: 0.5in">There is presently
  no agreement in place with any source of financing for working capital 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"><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; text-indent: 0.5in"><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; text-indent: 0.5in"><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; 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 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 2014
  appearing in our Annual Report on Form 10-K for the year ended December 31, 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"><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; text-indent: 0.5in">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>
  
  
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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, 2015,
  the end of our third quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial
  Officer, 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 effective as of the end of the period covered by this quarterly report.
  Our board of directors has only two members. 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, 2015 that have materially
  or are reasonably likely to materially affect, our internal controls over financial reporting.</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>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
  Aviation Fuel International, Inc., a wholly-owned subsidiary of the Company (&ldquo;AFI&rdquo;). 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>
  
  
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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"><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; 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"><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>
  
  <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 January 6, 2015, the
  Company issued a promissory note in the original principal amount of $6,000 (&ldquo;Note&rdquo;) to a lender. The Note matures
  on October 10, 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 50% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  twenty 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/12pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On December 8, 2014,
  our board of directors and the holder of a majority in interest of our voting capital stock approved a 1-for-2,000 reverse split
  of our common shares (&ldquo;Reverse Split&rdquo;). The Reverse Split became effective on April 6, 2015. As a result of the Reverse
  Split, each shareholder of record received one (1) share of common stock for each two thousand (2,000) shares of common stock they
  held prior to the Reverse Split, provided however, that fractions of a share were rounded up to the nearest whole share and any
  registered shareholder who would have otherwise held less than 200 shares following the Reverse Split was rounded up to 200 shares.
  Consequently, none of our registered shareholders as of the record date held less than 200 shares following the Reverse Split.
  This rounding up to 200 shares resulted in an additional 199,805 shares issued. These financial statements have been retroactively
  restated for this change in capital structure.</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
  June 22, 2015, the Company converted into 111,608 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he number
  of shares issued, at the time of such issuance, represented approximately 8.72% of the issued and outstanding shares of the Company.&nbsp;</FONT></P>
  
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  <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10.5pt"></FONT></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">&nbsp;</FONT><BR CLEAR="ALL">
  </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
  June 26, 2015, the Company converted into 124,070 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he number
  of shares issued, at the time of such issuance, represented approximately 8.84% of the issued and outstanding shares of the Company.&nbsp;</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
  June 30, 2015, the Company converted into 134,921 shares of common stock, a portion of a certain convertible promissory note originally
  issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he number
  of shares issued, at the time of such issuance, represented approximately 8.77% of the issued and outstanding shares of the Company.&nbsp;</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
  August 11, 2015, the Company converted into 153,595 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he
  number of shares issued, at the time of such issuance, represented approximately 9.07% of the issued and outstanding shares of
  the Company.&nbsp;</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
  September 17, 2015, the Company converted into 169,048 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he
  number of shares issued, at the time of such issuance, represented approximately 9.08% of the issued and outstanding shares of
  the Company.&nbsp;</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
  September 29, 2015, the Company converted into 185,375 shares of common stock, a portion of a certain convertible promissory note
  originally issued by the Company on January 21, 2014.</FONT><FONT STYLE="font-size: 12pt"> T</FONT><FONT STYLE="font-size: 10.5pt">he
  number of shares issued, at the time of such issuance, represented approximately 9.13% of the issued and outstanding shares of
  the Company.&nbsp;</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: 19 -->
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      <!-- Field: /Page -->
  
  <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; font-weight: bold; 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; font-weight: bold; text-decoration: underline; text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10.5pt"><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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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-family: Times New Roman, Times, Serif; font-size: 10.5pt">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">31.1</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-family: Times New Roman, Times, Serif; font-size: 10.5pt"><A HREF="ex31_1302certification.htm">Certification by Chief Executive Officer, Kenneth I. Denos, 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">31.2</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-family: Times New Roman, Times, Serif; font-size: 10.5pt"><A HREF="ex31_2302certification.htm">Certification by Chief Financial Officer, Chene C. Gardner, 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">32.1</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-family: Times New Roman, Times, Serif; font-size: 10.5pt"><A HREF="ex32_1906certification.htm">Certification by Chief Executive Officer, Kenneth I. Denos, pursuant to Section 906 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">32.2</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-family: Times New Roman, Times, Serif; font-size: 10.5pt"><A HREF="ex32_2906certification.htm">Certification by Chief Financial Officer,Chene C. Gardner, 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>
  
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  <P STYLE="font: 10.5pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify"><B>&nbsp;</B></P>
  
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  <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>
  
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  <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>
  
  
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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; 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">
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      <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-family: Times New Roman, Times, Serif; font-size: 10.5pt">Date: November 23, 2015</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">BY: <u>/s/ Kenneth I. Denos</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">Kenneth I. Denos</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-family: Times New Roman, Times, Serif; font-size: 10.5pt">Chief Executive Officer</font></td></tr>
  </table>
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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": "151249591"}, "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,
  2015
  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.
  (Exact Name of Registrant as Specified in
  its Charter)
  Delaware
  87-0561426
  (State
          or Other Jurisdiction
  of Incorporation
          or Organization)
  (IRS
          Employer
  Identification
          No.)
  11650 South State Street, Suite 240
  Draper, Utah
  84020
  (Address of Principal Executive Offices)
  (Zip Code)
  (801) 816-2510
  (Issuer's Telephone Number)
  510 Shotgun Road, Suite 110, Fort Lauderdale,
          FL 33326
  (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 13, 2015,
  the Company had outstanding 4,420,504 shares of common stock, par value $0.0001 per share.
  2
  Table of Contents
  PART
  I
  FINANCIAL
  INFORMATION
  The
  Condensed
  Consolidated
  Financial Statements of the Company are prepared as of
  September 30, 2015.
  ITEM
  1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q
  CONTENTS
  Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (unaudited)
  4
  Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2015 and 2014 (unaudited)
  5
  Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2015 and 2014 (unaudited)
  6
  Notes to the Unaudited Condensed Consolidated Financial Statements
  7
  3
  Table of Contents
  FUELSTREAM, INC.
  Condensed Consolidated Balance Sheets
  (Unaudited)
  ASSETS
  September 30,
  December 31,
  2015
  2014
  CURRENT ASSETS
  Cash and cash equivalents
  $
  94,176
  $
  811
  Accounts receivable, net of allowance
  99,051
  28,000
  Fuel Deposits
  344,926
  —
  Total Current Assets
  538,153
  28,811
  TOTAL ASSETS
  $
  538,153
  $
  28,811
  LIABILITIES AND STOCKHOLDERS' DEFICIT
  CURRENT LIABILITIES
  Accounts payable
  $
  995,748
  $
  959,469
  Due to related parties
  123,012
  52,973
  Accrued expenses
  1,717,924
  1,215,086
  Convertible debenture/notes payable - short term (net of
  discount of $23,380 and $6,358, respectively)
  665,257
  634,141
  Convertible notes payable - related parties
  325,722
  280,722
  Notes payable
  1,044,092
  1,034,610
  Notes payable - related parties
  2,208,106
  2,138,106
  Line of Credit
  501,000
  —
  Derivative liability
  718,291
  372,939
  Total Current Liabilities
  8,299,152
  6,688,046
  TOTAL LIABILITIES
  8,299,152
  6,688,046
  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
  shares authorized, 2,047,508 and 969,086
  shares issued and outstanding, respectively
  205
  97
  Additional paid-in capital
  52,685,476
  52,559,736
  Accumulated deficit
  (60,446,680
  )
  (59,219,068
  )
  Total Stockholders' Deficit
  (7,760,999
  )
  (6,659,235
  )
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $
  538,153
  $
  28,811
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  4
  Table of Contents
  Condensed Consolidated Statements of Operations
  (Unaudited)
  For the Three Months Ended
  For the Nine Months Ended
  September 30,
  September 30,
  2015
  2014
  2015
  2014
  NET SALES
  $
  115,517
  $
  382,073
  $
  115,517
  $
  639,661
  COST OF SALES
  105,074
  313,476
  105,074
  534,371
  GROSS MARGIN
  10,443
  68,597
  10,443
  105,290
  OPERATING EXPENSES
  Selling, general and administrative
  114,429
  448,022
  402,673
  1,337,944
  Total Operating Expenses
  114,429
  448,022
  402,673
  1,337,944
  LOSS FROM OPERATIONS
  (103,986
  )
  (379,425
  )
  (392,230
  )
  (1,232,654
  )
  OTHER INCOME (EXPENSES)
  Gain on conversion of debt
  318
  47,843
  318
  112,457
  Gain (Loss) on change in fair value of derivative liability
  (602,997
  )
  (319,205
  )
  (290,392
  )
  209,918
  Interest expense (including amortization of debt discount
  of $10,430, $251,768, $65,478 and $1,176,353, respectively)
  (177,927
  )
  (468,024
  )
  (545,308
  )
  (2,029,094
  )
  Total Other Income (Expenses)
  (780,606
  )
  (739,386
  )
  (835,382
  )
  (1,706,719
  )
  LOSS BEFORE INCOME TAXES
  (884,592
  )
  (1,118,811
  )
  (1,227,612
  )
  (2,939,373
  )
  INCOME TAX EXPENSE
  —
  —
  —
  —
  NET LOSS
  $
  (884,592
  )
  $
  (1,118,811
  )
  $
  (1,227,612
  )
  $
  (2,939,373
  )
  BASIC AND DILUTED:
  Net loss per common share
  $
  (0.56
  )
  $
  (4.22
  )
  $
  (0.97
  )
  $
  (19.48
  )
  Weighted average shares outstanding
  1,593,161
  264,948
  1,268,977
  150,904
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  5
  Table of Contents
  FUELSTREAM, INC.
  Condensed Consolidated Statements of Cash Flows
  (Unaudited)
  For the Nine Months Ended
  September 30,
  2015
  2014
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss
  $
  (1,227,612
  )
  $
  (2,939,373
  )
  Adjustments to reconcile net loss to net
  cash used in operating activities:
  Gain on conversion of debt
  —
  (112,457
  )
  Common stock issued for services and finance expenses
  —
  175,450
  Stock based compensation
  68,434
  103,218
  Operating expenses incurred by noteholders on behalf of the Company
  —
  270,969
  Non-cash interest expenses
  —
  336,171
  Change in fair value of derivative liability
  290,392
  (209,918
  )
  Amortization of debt discounts
  65,478
  1,176,353
  Changes in operating assets and liabilities:
  Fuel deposits
  (344,926
  )
  —
  Accounts receivable
  (71,051
  )
  (40,825
  )
  Accounts payable and accrued expenses
  564,629
  982,949
  Due to related parties
  179,039
  1,064
  Net Cash Used in Operating Activities
  (475,617
  )
  (256,399
  )
  CASH FLOWS FROM INVESTING ACTIVITIES:
  —
  —
  CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from line of credit
  501,000
  —
  Proceeds from notes payable
  9,482
  —
  Proceeds from convertible notes payable
  52,500
  421,948
  Proceeds from notes payable - related parties
  6,000
  26,000
  Payments on notes payable
  —
  (131,500
  )
  Net Cash Provided by Financing Activities
  568,982
  316,448
  NET INCREASE IN CASH AND CASH EQUIVALENTS
  $
  93,365
  $
  60,049
  CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
  811
  —
  CASH AND CASH EQUIVALENTS, END OF PERIOD
  $
  94,176
  $
  60,049
  SUPPLEMENTAL CASH FLOW INFORMATION
  Cash Payments For:
  Interest
  $
  164
  $
  601
  Income taxes
  $
  —
  $
  —
  Non-cash investing and financing activity:
  Initial derivative liability on convertible note payable
  $
  37,500
  $
  803,378
  Beneficial conversion feature on convertible note credited to additional paid in capital
  $
  45,000
  $
  435,156
  Common stock issued for settlement of notes payable and accrued interest
  $
  —
  $
  142,745
  Accrued interest converted to notes payable
  $
  —
  $
  131,659
  Extinguished derivative liability on conversion of convertible note payable
  $
  —
  $
  703,989
  Common stock issued for the conversion of debt and accrued interest
  $
  4,362
  $
  1,306,009
  Common stock issued for the conversion of debt and accrued interest related party
  $
  —
  $
  210,784
  Reclassification from due to related party to note payable - related party
  $
  64,000
  $
  —
  Reclassification from accounts payable to convertible note payable - related party
  $
  45,000
  $
  —
  Accounts payable converted to notes payable related party
  $
  —
  $
  158,000
  Reduction of derivative liability due to conversions credited to additional paid in capital
  $
  8,370
  $
  —
  The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
  6
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  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, 2014. Operating results for the nine months ended September 30, 2015
  are not necessarily indicative of the results to be expected for the year ending December 31, 2015.
  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. The accumulated deficit as of September
  30, 2015 was $60,446,680. The total stockholders' deficit at September 30, 2015 was $7,760,999 and, as of that date, the
  Company had a working capital deficit (current liabilities minus current assets) of $7,760,999, resulting from 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 through the sale of aircraft fuel
  and related services. 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.
  NOTE 3 - FUEL DEPOSITS
  During the nine months ended September 30,
  2015, the Company deposited funds with certain fuel vendors in order to establish a "prepay" account that is used for
  the purchase of fuel. The balance in these fuel deposits at September 30, 2015 was $344,926.
  NOTE 4 - NOTES PAYABLE
  On September 24, 2015 the Company issued
  a promissory note for $9,482. The note is due on demand and bears interest at the rate of 10% per annum.
  7
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  NOTE 5 - CONVERTIBLE DEBENTURE/NOTES PAYABLE
  Convertible debentures January 6, 2015
  On January 6, 2015, the Company issued a
  $6,000 Convertible Promissory Note which bears interest at a rate of 8%, due on October 10, 2015 (in default) and is convertible
  into the Company's common stock at the holder's option, at the conversion rate of 50% of the average of the lowest
  three day trading price for twenty trading days immediately preceding the date of conversion.
  The Company identified embedded derivatives
  related to the Convertible Promissory Note issued on January 6, 2015. 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 $11,520 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
  443.15
  %
  Risk free rate:
  0.18
  %
  The
  initial fair value of the embedded debt derivative of $11,520 was allocated as a debt discount up to the proceeds of the note
  ($6,000) with the remainder ($5,520) charged to current period operations as interest expense for the three months ended March
  31, 2015. At September 30, 2015, the derivative liability was adjusted to fair value which resulted in an increase of the derivative
  liability in the amount of $5,372. During the nine months ended September 30, 2015, the Company recorded amortization of debt
  discount in the amount of 5,805. The outstanding balance on the note as of September 30, 2015 is $6,000.
  Convertible
  debenture May 20, 2015
  On May 20, 2015 the Company issued a $15,000
  Convertible Promissory Note which bears interest at a rate of 10%, due on demand and is convertible into the Company's common
  stock at the maker's option, at the conversion rate of 60% of the lowest trading price in the five 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. 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 debt
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable as the lender has agreed to not force the Company to issue the shares if there is an insufficient number of authorized
  and unissued shares available. 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 $15,000 and was recorded as debt discount. The outstanding balance as of September 30,
  2015 is $15,000.
  8
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  Convertible debentures June 16, 2015
  On June 16, 2015, the Company issued a $31,500
  Convertible Promissory Note which bears interest at a rate of 8%, due on June 16, 2016 and is convertible into the Company's
  common stock at the holder's option, at the conversion rate of 60% of the average of the lowest three day trading price for
  ten trading days immediately preceding the date of conversion.
  The Company identified embedded derivatives
  related to the Convertible Promissory Note issued on June 16, 2015. 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 $51,809 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
  563.68
  %
  Risk free rate:
  0.28
  %
  The initial fair value of the embedded
  debt derivative of $51,809 was allocated as a debt discount up to the proceeds of the note ($31,500) with the remainder
  ($20,309) charged to current period operations as interest expense for the six months ended June 30, 2015. The outstanding
  balance as of September 30, 2015 is $31,500.
  At September 30, 2015, the Company adjusted
  the recorded fair value of the derivative liability to market on the notes resulting in noncash, non-operating loss of $290,392
  for the nine months ended September 30, 2015.
  During the nine months ended September 30,
  2015 and 2014 the Company amortized $65,478 and $1,176,353, respectively and $10,430 and $251,768, for the three months ended September
  30, 2015 and 2014, respectively, of beneficial debt discount to the operations as interest expense.
  Accrued interest on convertible notes payable
  as of September 30, 2015 was $226,761. Interest expense of $51,040 has been charged to expenses for the nine months ended September
  30, 2015.
  NOTE 6 - CONVERTIBLE NOTES PAYABLE - RELATED
  PARTIES
  Convertible debenture January 1, 2015
  On January 1, 2015 the Company issued a $45,000
  Convertible Promissory Note against 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.
  9
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  The Company analyzed the convertible debt
  for derivative accounting consideration under ASC 815 "Derivatives and Hedging" and determined that derivative accounting
  is not applicable as the lender has agreed to not force the Company to issue the shares if there is an insufficient number of authorized
  and unissued shares available. The Company further analyzed the convertible debt 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 $30,000 and was recorded as debt discount. During the three and six months ended June 30,
  2015, debt discount of $0 and $30,000, respectively, was amortized. The outstanding balance as of September 30, 2015 is $45,000.
  Accrued interest on convertible notes payable-related
  parties as of September 30, 2015 was $63,552. Interest expense of $24,640 has been charged to expenses for the nine months ended
  September 30, 2015.
  NOTE 7 - NOTES PAYABLE - RELATED PARTIES
  On April 1, 2015 the Company issued a promissory
  note to a related party for $45,000 in order to convert accounts payable. The note is due on demand and bears interest at the rate
  of 12% per annum.
  On June 1, 2015 the Company issued a promissory
  note to a related party for $19,000 in order to convert accounts payable. The note is due on demand and bears interest at the rate
  of 12% per annum.
  On June 23, 2015 the Company issued a promissory
  note to a related party for $6,000. The note is due on demand and bears interest at the rate of 24% per annum.
  Accrued interest on notes payable –
  related parties as of September 30, 2015 was $578,106. During the nine months ended September 30, 2015, total interest expense
  to related parties was $197,738.
  NOTE 8 - LINE OF CREDIT
  On April 20, 2015, the Company
  announced that it had entered into that certain Revolving Senior Secured Participating Line of Credit Agreement and exhibits
  thereto (collectively, the "Credit Facility") with NuVenture Fund I, LLC ("NuVenture"), in respect of
  a revolving credit line in the principal amount of $2,000,000 (the "Revolving Note"). The Revolving Note matures
  (a) two (2) years from the date of the Credit Facility unless extended by the NuVenture, in its sole and absolute discretion,
  for two additional periods of up to one (1) year each, or (b) at the sole discretion of NuVenture, upon the occurrence of an
  Event of Default, as defined in the Revolving Note, that remains uncured for fifteen (15) days. The Revolving Note bears
  interest at the rate of 24% per annum and, in the alternative, entitles NuVenture to receive a fee equal to 3.5% of any
  advance made under the Revolving Note. The Credit Facility contains representations, warranties, conditions, restrictions,
  and covenants of the Company that are customary in such transactions with similar companies. The balance due on the Revolving
  Note as of September 30, 2015 was $501,000. Accrued interest on the Revolving Note as of September 30, 2015 was $33,288.
  At the closing of the transactions contemplated
  by the Credit Facility, the Company shall issue to NuVenture a warrant to acquire a number of shares of the Company's common
  stock equal to 4% of the Company's common shares outstanding as of the Effective Date. The exercise price of the warrant
  shall be the closing trading price of the Company's shares as of the Effective Date. Should the credit limit be increased
  above $2,000,000, NuVenture shall be entitled to an additional warrant for each such increase, with such additional warrants containing
  similar terms and conditions as the original warrant. The number of shares of the Company's common stock subject to any such
  additional warrants shall be a product of (x) the amount of the increase in the Credit Line and (y) the number of shares of common
  stock of the Company to which the original warrant is subject.
  Effective September 30, 2015, NuVenture released, waived and discharged the Company from any claim for the
  warrants since no warrants have been issued.
  10
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  NOTE 9 - 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, 2015 and December 31, 2014. 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, 2015 and December 31, 2014.
  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, 2015 on a recurring basis:
  Assets and liabilities at fair value on a
  recurring basis at September 30, 2015:
  Level 1
  Level 2
  Level 3
  Total
  Liabilities
  Derivative liability
  —
  —
  $
  718,291
  $
  718,291
  Total
  —
  —
  $
  718,291
  $
  718,291
  The following table provides a summary of changes in fair
  value of the Company's Level 3 financial liabilities as of September 30, 2015:
  Debt Derivative
  Liability
  Balance, December 31, 2014
  $
  372,939
  Initial fair value of debt derivatives at note issuances
  63,330
  Extinguished derivative liability
  (8,370
  )
  Mark-to-market at September 30, 2015 - Embedded debt derivatives
  290,392
  Balance, September 30, 2015
  $
  718,291
  Net loss for the period included in earnings relating to the liabilities held at September 30, 2015
  $
  290,392
  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.
  11
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  NOTE 10 - 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, 2015 and December 31, 2014 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, 2015 and December 31, 2014 the Company had 2,047,508 and 969,086
  shares of common stock as issued and outstanding.
  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. The fair
  value of the vested portion of $68,434 was charged to stock based compensation and additional paid in capital during the nine months
  ended September 30, 2015. The options were forfeited effective July 1, 2015.
  On December 8, 2014, our board of
  directors and the holder of a majority in interest of our voting capital stock approved a 1-for-2,000 reverse split
  of our common shares ("Reverse Split"). The Reverse Split became effective on April 6, 2015. As a result of
  the Reverse Split, each shareholder of record received one (1) share of common stock for each two thousand (2,000) shares
  of common stock they held prior to the Reverse Split, provided however, that fractions of a share were rounded up to the
  nearest whole share and any registered shareholder who would have otherwise held less than 200 shares following the Reverse
  Split was rounded up to 200 shares. Consequently, none of our registered shareholders as of the record date held less than
  200 shares following the Reverse Split. This rounding up to 200 shares resulted in an additional 199,805 shares issued. These
  financial statements have been retroactively restated for this change in capital structure.
  On June 22, 2015, the Company converted into
  111,608 shares of common stock, $1,000 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $1,124.
  On June 26, 2015, the Company converted into
  124,070 shares of common stock, $1,000 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $3,624.
  On June 30, 2015, the Company converted into
  134,921 shares of common stock, $850 a portion of a certain convertible promissory note originally issued by the Company on January
  21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion reduced
  the derivative liability in the amount of $36.
  On August 11, 2015, the Company converted
  into 153,595 shares of common stock, $470 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $384.
  12
  Table of Contents
  FUELSTREAM, INC. AND SUBSIDIARIES
  Notes to the Unaudited Condensed Consolidated
  Financial Statements
  September 30, 2015
  On September 17, 2015, the Company converted
  into 169,048 shares of common stock, $497 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $2,553.
  On September 29, 2015, the Company converted
  into 185,375 shares of common stock, $545 a portion of a certain convertible promissory note originally issued by the Company on
  January 21, 2014. The Company had previously recorded a derivative liability associated with this note. The result of the conversion
  reduced the derivative liability in the amount of $649.
  Due to rounding of adjustment for reverse
  stock split the Company issued 199,805 shares of common stock during the nine months ended September 30, 2015.
  NOTE 11 - 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, 2015
  370,000
  $
  1.34
  Granted
  —
  —
  Exercised
  —
  —
  Forfeited
  (370,000
  )
  (1.34
  )
  Outstanding at September 30, 2015
  —
  $
  —
  Effective July 1, 2015, all outstanding options were forfeited.
  NOTE 12 - SUBSEQUENT EVENTS
  Subsequent to September 30, 2015,
  the Company converted into 2,372,996 shares of common stock, $5,192 a portion of a certain convertible promissory note originally
  issued by the Company on January 21, 2014.
  On October 7, 2015, Chene Gardner
  was appointed as the Company's Chief Financial Officer.
  13
  Table of Contents
  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.
  The Company's principal
  sources of revenues are derived the sale of fuel and related 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.
  The Company's ability
  to generate revenues during the remainder of 2015 and beyond depends upon a variety of factors, including the Company's ability
  to obtain financing and its ability to secure and keep customer accounts. Such efforts require significant systems development,
  administration, marketing and personnel costs, which, in turn, require substantial funding. If we are unable to obtain such funding,
  our ability to generate revenues will be significantly impaired and we may be unable to continue operations.
  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, 2015 and 2014.
  Revenues.
  The Company generated net revenues of $115,517 during the three months ended September 30, 2015 as compared to $382,073 for
  the three months ended September 30, 2014. The Company generated net revenues of $115,517 during the nine months ended
  September 30, 2015 as compared to $639,661 for the nine months ended September 30, 2014. The decrease is mainly due to a
  change in the financing of fuel purchases. During 2014, the Company obtained financing through the issuance of convertible
  promissory notes. In 2015, the Company chose not to incur this type of debt. A line of credit secured at the
  14
  Table of Contents
  beginning of the 3
  rd
  quarter
  of 2015 has allowed the Company to purchase fuel and produce revenues. 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.
  Cost of sales for the three months ended September 30, 2015 was $105,074 as compared to $313,476 for the three
  months ended September 30, 2014. Cost of sales for the nine months ended September 30, 2015 was $105,074 as compared to
  $534,371 for the nine months ended September 30, 2014. 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.
  Selling,
  General and Administrative Expenses.
  Selling, general and administrative expenses for the three months ended September
  30, 2015 were $114,429 compared to $448,022 during the three months ended September 30, 2014. Selling, general and
  administrative expenses for the nine months ended September 30, 2015 were $402,673 compared to $1,337,944 during the nine
  months ended September 30, 2014. 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 business.
  Other
  Income (Expense)
  . The Company had net other expenses of $780,606 for the three months ended September 30, 2015 compared
  to net other expenses of $739,386 during the three months ended September 30, 2014. The Company had net other expenses of
  $835,382 for the nine months ended September 30, 2015 compared to net other expenses of $1,706,719 during the nine months
  ended September 30, 2014. Other expenses incurred were comprised primarily of interest expenses related to notes payable
  including amortization of debt discount and offset with gain or loss on the change in the fair value of derivative liability
  and a gain on the conversion of debt. During the nine months ended September 30, 2015 and 2014, interest expense was $545,308
  and $2,026,094, respectively. Included in interest expense was the amortization of debt discount of $65,478 and $1,176,353
  for the nine months ended September 30, 2015 and 2014, respectively. The gain (loss) on change in fair value of derivative
  liability was $(290,392) and $209,918 for the nine months ended September 30, 2015 and 2014, respectively.
  Net
  Loss
  . The Company had a net loss of $884,592 and $1,227,612, respectively, for the three and nine months ended September
  30, 2015 compared to $1,227,612 and $2,939,373, respectively, during the three and nine months ended September 30, 2014. The
  decrease in net loss was mainly due to the decrease in overall expenses incurred by the Company.
  Liquidity and Capital Resources
  As of September 30, 2015,
  our primary source of liquidity consisted of $94,176 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. The Company used $475,617 and $256,399, respectively, in
  operating activities during the nine months ended September 30, 2015 and 2014. Net cash provided by financing activities was $568,982
  and $316,448, respectively, during the nine months ended September 30, 2015 and 2014.
  We have sustained
  significant net losses which have resulted in a total stockholders' deficit at September 30, 2015 of $7,760,999 and are
  currently experiencing a substantial shortfall in operating capital which raise doubt about our ability to continue as a
  going concern. We anticipate a net loss for the year ended December 31, 2015 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. The
  Company's
  15
  Table of Contents
  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 selling aircraft fuel and related services. 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.
  There is presently
  no agreement in place with any source of financing for working capital 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 2014
  appearing in our Annual Report on Form 10-K for the year ended December 31, 2014.
  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.
  16
  Table of Contents
  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, 2015,
  the end of our third quarter, we carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial
  Officer, 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 effective as of the end of the period covered by this quarterly report.
  Our board of directors has only two members. 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, 2015 that have materially
  or are reasonably likely to materially affect, our internal controls over financial reporting.
  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
  Aviation Fuel International, Inc., a wholly-owned subsidiary of the Company ("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.
  17
  Table of Contents
  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.
  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 January 6, 2015, the
  Company issued a promissory note in the original principal amount of $6,000 ("Note") to a lender. The Note matures
  on October 10, 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 50% discount to the average of the three lowest daily trading prices as reported on the OTCQB for the
  twenty trading days previous to the conversion date.
  On December 8, 2014,
  our board of directors and the holder of a majority in interest of our voting capital stock approved a 1-for-2,000 reverse split
  of our common shares ("Reverse Split"). The Reverse Split became effective on April 6, 2015. As a result of the Reverse
  Split, each shareholder of record received one (1) share of common stock for each two thousand (2,000) shares of common stock they
  held prior to the Reverse Split, provided however, that fractions of a share were rounded up to the nearest whole share and any
  registered shareholder who would have otherwise held less than 200 shares following the Reverse Split was rounded up to 200 shares.
  Consequently, none of our registered shareholders as of the record date held less than 200 shares following the Reverse Split.
  This rounding up to 200 shares resulted in an additional 199,805 shares issued. These financial statements have been retroactively
  restated for this change in capital structure.
  On
  June 22, 2015, the Company converted into 111,608 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 8.72% of the issued and outstanding shares of the Company.
  18
  Table of Contents
  On
  June 26, 2015, the Company converted into 124,070 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 8.84% of the issued and outstanding shares of the Company.
  On
  June 30, 2015, the Company converted into 134,921 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 8.77% of the issued and outstanding shares of the Company.
  On
  August 11, 2015, the Company converted into 153,595 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 9.07% of the issued and outstanding shares of
  the Company.
  On
  September 17, 2015, the Company converted into 169,048 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 9.08% of the issued and outstanding shares of
  the Company.
  On
  September 29, 2015, the Company converted into 185,375 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 9.13% 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.
  19
  Table of Contents
  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)
  31.1
  Certification by Chief Executive Officer, Kenneth I. Denos, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  .
  31.2
  Certification by Chief Financial Officer, Chene C. Gardner, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
  .
  32.1
  Certification by Chief Executive Officer, Kenneth I. Denos, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  .
  32.2
  Certification by Chief Financial Officer,Chene C. Gardner, 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.
  20
  Table of Contents
  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 23, 2015
  BY:
  /s/ Kenneth I. Denos
  __________________
  Kenneth I. Denos
  Chief Executive Officer
  21